Delixy (DLXY) F-1Registration statement (foreign)

As filed with the Securities and Exchange Commission on November 15, 2024

Registration No. 333-[•]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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DELIXY HOLDINGS LIMITED
(Exact name of registrant as specified in its charter)

____________________________

Not Applicable
(Translation of Registrants name into English)

883 North Bridge Road
#04-01
Southbank
Singapore 198785
+65 6291 3184

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)

____________________________

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, New York 10168

800-221-0102

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

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Copies to:

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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

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 ☒

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 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Registration Statement contains two prospectuses, as set forth below.

•        Public Offering Prospectus. A prospectus (the “Public Offering Prospectus”) to be used for the initial public offering of [2,000,000] ordinary shares of the Registrant (the “Ordinary Shares”) through the underwriter named in the Underwriting section of the Public Offering Prospectus, of which [1,350,000] Ordinary Shares are offered by the Registrant and an aggregate of [650,000] Ordinary Shares are offered by the Selling Shareholders.

•        Resale Prospectus. A prospectus to be used for the potential resale by the Resale Shareholders of an aggregate of [1,971,000] Ordinary Shares of the registrant (the “Resale Prospectus”). The Resale Shares contained in the Resale Prospectus will not be underwritten and sold through the underwriter.

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

•        they contain different outside and inside front covers;

•        the “Offering” section in the Prospectus Summary section on page 7 of the Public Offering Prospectus is removed and replaced with the “Offering” section on page Alt-1 of the Resale Prospectus;

•        they contain different “Use of Proceeds” sections on page 29 of the Public Offering Prospectus which are removed and replaced with the “Use of Proceeds” section on page Alt-2 of the Resale Prospectus;

•        a “Resale Shareholders” section is included in the Resale Prospectus beginning on page Alt-2 of the Resale Prospectus;

•        references in the Public Offering Prospectus to the Resale Prospectus will be deleted from the Resale Prospectus;

•        the “Underwriting” section on page 118 of the Public Offering Prospectus is removed and replaced with a “Plan of Distribution” section on page Alt-4 of the Resale Prospectus;

•        the “Legal Matters” section on page 122 of the Public Offering Prospectus is removed and replaced with the “Legal Matters” section on page Alt-6 of the Resale Prospectus; and

•        the outside back cover of the Public Offering Prospectus is deleted from the Resale Prospectus.

The Registrant has included in this Registration Statement, after the financial statements, a set of alternate pages (the “Alternate Pages”) to reflect the foregoing differences of the Resale Prospectus as compared to the Public Offering Prospectus.

The Public Offering Prospectus will exclude the Alternate Pages and will be used for the public offering by the Registrant. The Resale Prospectus will be substantively identical to the Public Offering Prospectus except for the addition or substitution of the Alternate Pages and will be used for the resale offering by Resale Shareholders.

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

DELIXY HOLDINGS LIMITED

[1,350,000] Ordinary Shares being offered by the Company

[650,000] Ordinary Shares being offered by the Selling Shareholders

This is an initial public offering of our ordinary shares, par value at US$0.001 per share (the “Ordinary Shares”). We are offering, on a firm commitment engagement basis, [1,350,000] Ordinary Shares and the Selling Shareholders (as defined and named herein) are offering an aggregate of [650,000] Ordinary Shares to be sold in the offering pursuant to this prospectus. We will not receive any proceeds from the sale of the Ordinary Shares to be sold by the Selling Shareholders. We anticipate that the initial public offering price of the Ordinary Shares will be between US$4.00 and US$5.00 per Ordinary Share.

Prior to this offering, there has been no public market for our Shares. We intend to apply to list our Ordinary Shares on the Nasdaq Capital Market under the symbol “DLXY”. This offering is contingent upon the listing of our Ordinary Shares on the Nasdaq Capital Market. There can be no assurance that we will be successful in listing our Ordinary Shares on the Nasdaq Capital Market or another national securities exchange.

Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Investing in our Ordinary Shares involves a high degree of risk, including the risk of losing your entire investment. See Risk Factors beginning on page 9 to read about factors you should consider before buying our Ordinary Shares.

We are an “Emerging Growth Company” and a “Foreign Private Issuer” under applicable U.S. federal securities laws and, as such, are eligible for reduced public company reporting requirements. Please see Implications of Being an Emerging Growth Company and Implications of Being a Foreign Private Issuer beginning on page 5 and page 6 of this prospectus for more information.

We are a holding company that is incorporated in the Cayman Islands as an exempted company. As a holding company with no operations, we conduct all of our operations through our indirect wholly-owned subsidiary, Delixy Energy Pte. Ltd, in Singapore. The Ordinary Shares offered in this offering are shares of the holding company that is incorporated in the Cayman Islands as an exempted company.

Investors of our Ordinary Shares should be aware that they do not directly hold equity interests in Delixy Energy Pte. Ltd., but rather are purchasing equity solely in Delixy Holdings Limited, the Cayman Islands holding company, which indirectly owns 100.0% equity interests in Delixy Energy Pte. Ltd.

Upon completion of this offering, our issued and outstanding shares will consist of [16,350,000] Ordinary Shares. We will be a “controlled company” as defined under Nasdaq Capital Market Marketplace Rule 5615(c) because, immediately after the completion of this offering, Mr. Xie, Dongjian will, through his wholly-owned company Mega Origin Holdings Limited, control [9,176,000] Ordinary Shares representing approximately [56.1]% of the voting power of our issued and outstanding Ordinary Shares. As a result, this concentrated control may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring shareholder approval. In addition, this may have anti-takeover effects and may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our shareholders. As a controlled company, we may be eligible for certain exemptions from the corporate governance requirements of the Nasdaq Capital Market listing rules, including (i) the requirement that a majority of our Board of Directors must be independent Directors, (ii) the requirement that our Director nominees must be selected or recommended solely by independent Directors, and (iii) the requirement that we have a corporate governance and nominating committee that is composed entirely of independent Directors with a written charter addressing the committee’s purpose and responsibilities. We do not intend to rely on these exemptions applicable to a “controlled company” and will instead rely on the exemptions provided to foreign private issuers to be exempt from the corporate governance requirements of the Nasdaq Capital Market listing rules. However, in the event we cease to be a foreign private issuer, we intend to rely on these exemptions applicable to a “controlled company”.

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(1)      Initial public offering price per share is assumed to be US$4.50 (being the midpoint of the offer price range as set out in the cover page of this prospectus).

(2)      We have agreed to pay the underwriter a discount equal to 7.5% for any amount of Ordinary Shares from investors sourced by underwriters and 4.5% for any amount of Ordinary Shares from investors sourced by us. This table does not include a non-accountable expense allowance equal to 1% of the gross proceeds of this offering payable to the underwriter. For a description of the other compensation to be received by the underwriter, see “Underwriting” beginning on page 118.

(3)      Excludes fees and expenses payable to the underwriter. The total amount of underwriter expenses related to this offering is set forth in the section entitled “Expenses Relating to This Offering” on page 113.

(4)      Includes US$[•] gross proceeds from the sale of [1,350,000] Ordinary Shares offered by our Company and US$[•] gross proceeds from the sale of [650,000] in aggregate Ordinary Shares offered by the Selling Shareholders.

If we complete this offering, net proceeds will be delivered to us and the Selling Shareholders on the closing date.

The underwriter expects to deliver the Ordinary Shares to the purchasers against payment on or about [•], 2024.

You should not assume that the information contained in the registration statement to which this prospectus is a part is accurate as of any date other than the date hereof, regardless of the time of delivery of this prospectus or of any sale of the Ordinary Shares being registered in the registration statement of which this prospectus forms a part.

No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.

Bancroft Capital, LLC

The date of this prospectus is [•], 2024.

TABLE OF CONTENTS

Through and including [•], 2024 (the 25th day after the date of this prospectus), all dealers that effect transactions in these Ordinary Shares, 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 an underwriter and with respect to their unsold allotments or subscriptions.

RISK FACTORS

Investing in our Shares 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 shares. 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.

This prospectus also contains forward-looking statements having direct and/or indirect implications on our future performance. Our actual results may differ materially from those anticipated by these forward-looking statements due to certain factors, including the risks and uncertainties faced by us, as described below and elsewhere in this prospectus.

Risks Related to Our Business and Industry

We are dependent on our suppliers for the supply of crude oil and oil-based products. Any shortage or delay in the supply of crude oil and oil-based products from them may materially and/or adversely affect our business and results of operations if we cannot secure alternative sources of supply immediately

We depend on our suppliers for the supply of crude oil and oil-based products. This makes us susceptible to supply shortages or price fluctuations that could negatively impact our operating results. We currently purchase the crude oil and oil-based products from a number of suppliers. For the financial years ended December 31, 2022 and 2023, our top three suppliers accounted for approximately 90.0% and 87.2% of our total purchases, respectively. For the six months period ended June 30, 2023 and 2024, our top three suppliers accounted for approximately 100% and 91.8% of our total purchases, respectively.

If our relationship with any of our suppliers terminates or if any of our suppliers suffer a material disruption in production, we may experience difficulties and delays in obtaining the products we trade from alternative sources of supply and we may therefore be unable to obtain a sufficient quantity of products on acceptable terms without interruption to our business operations. Any interruption or delay in the supply of the products we trade, or the inability to obtain such products from alternate sources at acceptable prices and within a reasonable amount of time, would impair our ability to meet scheduled deliveries to our customers and could result in our customers cancelling their orders or switching to another supplier. Any such events could adversely affect our business, results of operations and financial condition.

A significant portion of our revenue is attributable to the sale of crude oil and our profitability may be adversely affected if demand for crude oil declines for any reason

We have a concentrated revenue portfolio as a significant portion of our revenue is attributable to the sale of crude oil. For the financial year ended December 31, 2023, trading in crude oil represented 87.2% of our total trading revenue, while trading in oil-based products represented the remaining 12.8% of our total trading revenue. There can be no assurance that we will be able to maintain a stable supply of crude oil from our suppliers or demand for crude oil from our customers. If our customers’ requirements change or if the demand for crude oil declines for any reason, including due to any fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices, there may be a potential loss in revenue which would adversely affect our profitability.

We do not enter into long-term agreements with our customers and our customers are not subject to any minimum purchase requirement to place orders with us

We do not enter into long-term agreements with our customers and there is no assurance that our customers will continue to purchase from us in the future. Our customers are not subject to any minimum purchase requirement to place orders with us and they have the flexibility to place their orders based on their needs and on a case-by-case basis. If any of our major customers terminates its business relationship with us, and we fail to secure orders from new customers on a timely basis, there may be an adverse effect on our business operations, financial performance and profitability.

We are dependent on a small number of key customers

Our revenue is concentrated among a small number of customers. For the financial years ended December 31, 2022, and December 31, 2023, our top three customers accounted for approximately 89.0% and 87.2% of our revenue, respectively. For the six months period ended June 30, 2023 and 2024, our top three customers accounted for approximately 100% and 72.8% of our revenue, respectively. If any of these customers were to reduce or cease their business with the Company, it could have a material adverse impact on the Company’s financial condition and results of operations.

The Company has taken steps to mitigate its customer concentration risk by diversifying its customer base and developing long-term relationships with its key customers. However, the Company remains exposed to customer concentration risk, and any significant changes in the business of its key customers could have a material adverse impact on its business.

In addition, the Company’s business is dependent on the continued success of its customers. If any of the Company’s customers were to experience financial difficulties or cease operations, it could have a material adverse impact on the Company’s business.

The Company is aware of the risks associated with customer concentration and is taking steps to mitigate these risks. However, investors should be aware of the potential for customer concentration to have a material adverse impact on the Company’s business.

We are reliant on customers and suppliers located within the PRC

Our business is reliant on customers and suppliers located within the PRC. For the financial years ended December 31, 2022 and 2023, the percentage of revenue derived from customers in the PRC was 75.9% and 87.2% respectively, while the percentage of products that we source from suppliers in the PRC was 88.9% and 57.5% respectively. For the six months period ended June 30, 2023 and 2024, the percentage of revenue derived from customers in the PRC was 97.4% and 92.1% respectively, while the percentage of products that we source from suppliers in the PRC was 100% and 50.3% respectively.

If any of our key customers or suppliers in the PRC were to reduce their level of business with us, cease operations, or face adverse regulatory actions, it could materially and adversely affect our business, financial condition, and results of operations. The PRC government has substantial oversight and regulatory authority over the conduct of business activities within its jurisdiction, and any intervention or changes in its economic or regulatory policies could directly impact the operations of our customers and suppliers. Such changes could include increased scrutiny and restrictions on cross-border transactions or changes in international trade policies. The PRC’s regulatory environment is subject to change, and any changes in the policies, regulations, rules and the enforcement of laws of the PRC government may be implemented quickly with little advance notice. The imposition of additional restrictions on our customers’ or suppliers’ ability to conduct business, or any actions taken by the PRC government to influence or intervene in their operations could limit their ability to continue conducting business with us. This could have a material adverse impact on our business, financial condition and results of operations.

Our cash flows could be adversely affected by net operating cash outflows caused by a potential timing mismatch between the receipt of payments from our customers and the disbursement of payments to our suppliers

We typically procure our crude oil from global suppliers, including those in Europe, West Africa, the Middle East, Singapore, Malaysia and Brazil for sale to our customers which include refineries and trading companies in Southeast Asia and East Asia. For oil-based products, we generally procure them from suppliers in the PRC for sale to our customers which comprises mainly other traders and wholesalers in Southeast Asia and East Asia. While we typically settle full payment of our purchase orders with our suppliers immediately upon confirmation of the order, we generally grant our customers credit terms of up to 90 days, depending on our credit assessment of the customer and our relationship with such customers, resulting in a material cash flow mismatch. As such, we would record significant net operating cash outflows in the event that we accept too many of our customers’ orders in a particular period of time and are required to settle full payment of our back-to-back purchase orders with our suppliers.

We depend on timely payments from our customers for cash inflow to meet our payment obligations to our suppliers. There is no assurance that our cash flow management measures will function effectively, if at all. In the event of a significant cash flow mismatch or substantial cash outflow, our cash flow position may be adversely affected and we might have to raise funds through internal resources and/or banking facilities in order to meet our payment obligations to our suppliers in full and on time.

We may be unable to fully pass any increase in cost of sales to our customers

Our ability to obtain and maintain suitable pricing for our customers is essential. Depending on their individual needs and taking into consideration market trends, our customers may enter into either fixed price contracts or contracts where the price of the product is pegged to the prevailing market price at time of delivery. Where possible, we will enter into back-to-back agreements with our customers and suppliers, and the price we charge our customers is based on a cost-plus approach by adding a mark-up to our cost of purchase. In calculating the mark-up, we will consider factors such as our cost of purchase, quantity of product, delivery timelines, credit terms and our business relationship with the customer. Other factors that we take into consideration include where we have purchased the relevant products ahead of time with the intention of taking advantage of arbitrage windows and opportunities. However, we may not always be able to enter into back-to-back agreements and our Company may be unable to fully pass any increase in cost of sales to our customers. In particular, a significant increase in labor costs could exert downward pressure on our profit margins.

We depend on key management personnel

Our success depends significantly on the expertise, experience, continuity, network and committed service of our key management personnel, most of whom have an in-depth understanding of our industry and operations and would be difficult to replace. Our key management personnel, including Mr. Xie, Ms. Chu and Ms. Yao, are essential to our success because of their experience and connections in the oil trading market, their market development skills and expertise in managing our operations. Details of their expertise and experience are set out in the section headed ‘‘Directors and senior management’’ in this prospectus. In addition, the maintenance of our existing business relationships as well as the reputation that our management team has established is dependent on the continued service of our key management personnel.

There is no assurance that these key management personnel will not voluntarily terminate their employment with us. We do not carry, and do not intend to procure, key person insurance on any of our senior management team.

As a result, the departure of any of our key management personnel could be disruptive to our business development and could have a material adverse effect on our business and financial conditions. We cannot guarantee that the services of such personnel will continue to be available to us or that we will be able to replace any such personnel with individuals who possess similar knowledge, experience or network.

We are dependent on our transport providers for the transport of our products

We also utilize and depend on the services of certain third-party service providers for our operations. In particular, and from time to time, we may engage third party transport providers, such as international haulers, shipping lines and transport companies, for freight forwarding and shipping services. In the event any such third party transport providers fail to satisfy their obligations or in the event there are any service disruptions or issues with delivery (such as leakage of the products we are transporting and/or a change in quality of the oil products within the cargo), this may result in our products being rejected by our customers and/or a breach of our contractual obligations towards our customers.

In addition, there is a risk that the use of vessels to transport crude oil and oil-based products may result in an oil spill and cause significant environmental damage. Vessels are also exposed to a high risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and hazardous characteristics of crude oil and oil-based products transported in the vessels. The crew may also be inadvertently exposed to escaped gases from the crude oil and oil-based products transported in their vessel, and this may pose a risk to their health and safety. The operation of vessels is subject to strict regulations and vetting requirements that our third-party transport providers need to comply with. For the avoidance of doubt, we are not liable for the satisfaction of such regulations and requirements by such third-party transport providers. Generally, the regulations governing the transport of crude oil are applicable to the vessel owners, rather than to the charterers or end users. Specifically, in relation to the International Safety Management (ISM) Code, which provides an international standard for the safe management and operation of ships and for pollution prevention, our chartering agreement provides that any loss, damage, expense or delay caused by failure on the part of the owners to comply with the ISM Code shall be for the owner’s account. Our purchase agreements with our suppliers will also typically require that each vessel nominated to carry cargo be owned or demise chartered by a member of the International Tanker Owners Pollution Federation Limited (ITOPF) and have in place adequate insurance cover for oil pollution in accordance with the rules of the International Group of Protection and Indemnity Clubs. Where the vessel does not meet such requirements, the supplier may refuse to load the vessel. We believe that our arrangements adequately prevent any non-compliance with regulations and protect us from liability in the event of any failure to comply with regulations applicable to the transport of crude oil.

However, in the event of any accident or damage, our products may be affected and we may not be able to deliver our products to our customers in a timely manner. Our relationship with our suppliers may also be adversely affected. Any such events could therefore adversely affect our reputation, as well as our business, results of operations and financial condition.

We may fail to deliver our products timely to our customers or maintain our reputation and this can adversely affect our business, financial condition and results of operations

We believe that the reputation we have built over the years plays a significant role in attracting customers and securing our customers’ orders. Whether or not we can maintain or enhance our reputation depends largely on our ability to continue to provide quality and timely services to our customers. If we fail to meet their needs or are unable to deliver the products requested by them to the designated location in a timely manner, our customers may no longer perceive our services to be of a high quality and our reputation could be adversely affected. This will in turn negatively affect our business, financial condition and results of operations.

Natural disasters and other catastrophic events beyond our control, including but not limited to the COVID-19 pandemic, have and could continue in the future to adversely affect our business operations and financial performance

The occurrence of the global COVID-19 pandemic negatively affected our business between 2020 and 2022 due to the global imposition of movement control measures and a global plunge in oil prices, which resulted in reduced revenue for our business. The occurrence of one or more other natural disasters, such as fires, hurricanes, tornados, tsunamis, floods and earthquakes, geo-political events or military activities disrupting transportation, communication or utility systems; or other highly disruptive events, such as nuclear accidents, pandemics, unusual weather conditions or cyberattacks, could adversely affect our operations and financial performance. The occurrence of these events or another global pandemic could result in, among other things, operational disruptions, the lack of an adequate workforce in parts of or all of our operations and communications and transportation disruptions. This in turn could lead to decreased consumer confidence and spending, and increased volatility in Singapore, the United States and the global financial markets and economy. As a result, our business operations and financial performance may be adversely affected.

We operate in a competitive market

We compete with various international and local service providers. Competition may result in pricing pressures, declining revenue and profitability, or a loss of market share. We face competitors who may have strong competitive advantages, including longer operating histories, larger and broader customer bases, lower operating costs, more established relationships with a broader set of suppliers and customers, greater brand recognition, and greater financial, research and development, marketing, distribution, and other resources than us. In addition, new companies may enter the market with innovative business models or more appealing service offerings and disrupt the competitive landscape, making it even more challenging for us to maintain our market position. There is no guarantee that our strategies will remain competitive or successful in the future. Increased competition may result in pricing pressures and loss of our market share, which could have a material adverse effect on our business, financial condition and results of operations.

Changes in existing laws, regulations and government policies may cause us to incur additional costs

Our business operations are governed by various laws, regulations and government policies in Singapore. These laws and regulations may change from time to time. We may be unable to comply with all these requirements in time or at all or we may need to incur substantial costs to be compliant, which may adversely affect our business operations and financial condition.

Our business may be adversely affected by a deterioration in general economic conditions or a weakening of the broader energy industry

Our business is driven by crude oil prices, which are affected by both domestic and global supply and demand factors. A prolonged economic slowdown, a global recession, periods of high inflation, adverse events relating to the energy industry and local, regional and national economic conditions and factors could negatively impact our operations and therefore adversely affect our business, financial condition and results of operations. The risks associated with our business are more acute during periods of economic slowdown or recession because such periods may lead to

greater fluctuations in crude oil prices and/or decreased demand for crude oil and oil-based products. During periods of high inflation, we may experience increased procurement, transportation and labor costs, as well as demand volatility due to economic uncertainty. While recent inflationary pressures have led to such increase in costs and impacted our operations, we have been able to mitigate this impact due to our strong market position and pricing power, which has allowed us to pass these costs on to our customers through back-to-back agreements. As a result, our profitability and operating results have not been impacted by recent inflationary pressures. However, we can provide no assurance that we will not be affected by such inflationary pressures in Singapore or globally in the future. In the event that the inflationary pressures continue to increase to any material extent, and we continue to pass along the increased costs to our customers, it may result in loss of sales and loss of customers, thereby adversely impacting our margins and results of operations.

We may implement business strategies and future plans that may not be successful

The successful implementation of our business strategies and future plans depends on a number of factors, including general market conditions, government policies, the availability of funds, competition and our ability to retain and recruit competent employees. There is no assurance that our business strategies and future plans can be implemented effectively and successfully as some of these factors are beyond our control. If any implementation of these strategies and plans fails or is delayed, we may be adversely affected by investment expenses that have not led to the anticipated results, the distraction of management from our core business or any damage to our brand or reputation. Additionally, if we fail to secure adequate funds in a timely manner, we may also be unable to pursue opportunities to expand our business.

Our inability to predict accurately market demand may affect our business operations and financial performance

The market demand for our products could decline, sometimes rapidly or unpredictably, due to general market conditions that are not specific to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for corporate earnings, changes in interest or currency rates, or adverse investor sentiment generally. The market demand for our oil products may also decline because of factors that affect a particular industry such as labor shortages, increased production costs, and competitive conditions. Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the market generally and on specific investments. For example, in recent years, the COVID-19 pandemic, the large expansion of government deficits and debt as a result of government actions to mitigate the effects of the pandemic, Russia’s invasion of Ukraine, and the rise of inflation have resulted in extreme volatility in the global economy and in global financial markets. Economies and financial markets throughout the world are becoming increasingly interconnected. As a result, the value and liquidity of our trades may be negatively affected, which will in turn, impact our business, results of operations and financial condition.

In particular, Russia’s invasion of Ukraine led to significant geopolitical tensions and subsequent import and export bans. While we do not source any of our products from suppliers in Russia or trade with any customers from Russia, these trade sanctions and restrictions have affected global supply chains, led to a reduction in global oil supply and an increase in oil prices. The uncertainty and volatility in the global oil market that followed caused disruptions for our customers, leading to a decrease in demand for our crude oil and oil-based products. As a result, we experienced a decrease in revenue for the financial year ended December 31, 2023. As of the date of this prospectus, global oil supply and oil prices have since stabilized, and we do not anticipate any further significant impacts from the ongoing Russia-Ukraine conflict. However, should there be new developments in the Russia-Ukraine conflict, such as further escalations or additional sanctions, these could lead to renewed volatility in global oil supply and oil prices, thereby potentially impacting our business operations and financial performance.

We may use hedging strategies that may be unsuccessful

We may use hedging strategies to cover any outstanding positions we may hold from time to time. These strategies may be unsuccessful because there may be an imperfect correlation, or no correlation, between the price movements of the hedging instrument and the price movements of the trade being hedged. We are subject to the risk that our counterparty will default on its obligation to pay us, as well as the risk that we will not be able to meet our obligations to pay the other party to the agreement. Swap agreements may also involve the risk that there is an imperfect correlation between the return on our obligation to the counterparty and the return on the referenced asset. In addition, swap agreements are subject to market and illiquidity risk, leverage risk and hedging risk. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for us. There can be no assurance that our hedging transactions (including by way of swap arrangements) will be effective. The use of hedging may also result in certain adverse tax consequences, and may also reduce our potential for profit.

We are vulnerable to fluctuations in foreign exchange rates

Our functional and presentation currency is U.S. dollars. While substantially all of our major contracts are denominated in U.S. dollars, our operating costs are incurred in a mix of currencies, predominantly the U.S. dollar and Singapore dollar. Some expenses, comprising primarily the salaries of Singapore employees, rent and payments to other contractors in Singapore are normally paid in Singapore dollars. Accordingly, movements in the exchange rates of any of these currencies relative to the U.S. dollar could adversely affect our results of operations and financial condition.

Our current insurance coverage may not sufficiently protect us against all the risks we are exposed to and this may adversely affect our business, results of operations and financial condition

There can be no assurance that our current insurance coverage will cover all our risks or adequately protect us against all liabilities arising from claims and litigation against us. We will have to bear any losses, damages or liabilities in the course of our operations arising from events for which we do not have adequate insurance coverage. Further, the insurance premium payable by us depends on various factors, including the scope and estimated contract sum set out in the service contracts with our customers and our insurance claim track record.

Additionally, our insurers may refuse to pay particular claims and our insurance policies may be voidable by the insurers if we take, or fail to take, certain actions as mandated by the insurers. Our ability to obtain and maintain adequate insurance may be adversely affected by conditions in the insurance market for which we have no control. There is no assurance that the insurance premium payable by us will not increase or that our insurance coverage will not be reduced in the future. If we are held liable for uninsured losses, the amounts of claims for insured losses exceed the limits of our insurance coverage or the insurance premium payable by us increases significantly, our business, results of operations and financial condition may be materially and adversely affected. In addition, we may not be able to obtain adequate insurance coverage at reasonable rates in the future during adverse insurance market conditions.

We may also be subject to calls or premiums in amounts based not only on our claim records but also the claim records of other members of the protection and indemnity associations through which we receive insurance coverage for tort liability, including pollution-related liability. Payment of these calls could result in significant expense to us, which could have a material adverse effect on our results of operations, cash flows and financial condition. Moreover, the protection and indemnity associations and other insurance providers reserve the right to make changes in insurance coverage with little or no advance notice. Any such events could adversely affect our results of operations and financial condition.

We may need to raise additional capital required to grow our business, and we may be unable to raise capital on terms acceptable to us or at all

Growing and operating our business may require significant cash outlays and capital expenditures and commitments. Although our current cash and cash equivalents, anticipated cash flows from operating activities and the proceeds from this offering will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for at least 12 months following this offering, there is a risk that we may need additional cash resources in the future to fund our growth plans or if we experience adverse changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for new investments, acquisitions, capital expenditures or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we will need to seek additional capital, potentially through equity or debt financing, to fund our growth. Our ability to access the credit and capital markets in the future as a source of liquidity, and the borrowing costs associated with such financing, are dependent upon market conditions. We cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to unseen factors such as the recurrence of the COVID-19 global pandemic, risks of war and regional conflicts. In the event of a sustained market deterioration, and continued declines in revenues, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. We cannot provide any assurance that we will be able to obtain additional sources of financing or liquidity in amounts or on terms acceptable to us, or at all.

Our Executive Officers have no prior experience in operating a U.S. public company, and their inability to operate the public company aspects of our business could harm us

Our Executive Officers have no experience in operating a U.S. public company, which makes our ability to comply with applicable laws, rules and regulations uncertain. Our failure to comply with all laws, rules and regulations applicable to U.S. public companies could subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and share price.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our Ordinary Shares may be materially and adversely affected

Prior to the completion of this offering, we have been a private company with limited accounting personnel. Furthermore, prior to the completion of this offering, our management has not performed an assessment of the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud.

Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of our ordinary shares.

Upon the completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F. In addition, if we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting on an annual basis. Our management may conclude that our internal control over financial reporting is ineffective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a burden on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify material weaknesses and deficiencies in our internal control over financial reporting. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”

In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may be unable to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our ordinary shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud, misuse of corporate assets and legal actions under the United States securities laws and subject us to potential delisting from the Nasdaq Capital Market, to regulatory investigations and to civil or criminal sanctions.

We currently lack personnel adequately trained in and have appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and related disclosures to fulfil U.S. GAAP and SEC financial reporting requirements, which could result in (i) our failure to maintain effective internal control over financial reporting, (ii) errors in our financial statements; (iii) failure to meet our reporting obligations; and (iv) loss of confidence by the investors in our financial information. We are in the process of implementing a number of measures to address this, including but not limited to, (i) engaging an external consulting firm to assist us with our U.S. GAAP and SEC reporting requirements; (ii) allocating sufficient resources to prepare and review financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting requirements; (iii) establishing an audit committee and strengthening corporate governance; and (iv) providing our relevant finance staff with appropriate training in connection with U.S. GAAP and SEC reporting requirements.

We will be subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure that will increase both our costs and the risks associated with non-compliance

Following this offering, we will be subject to rules and regulations by various governing bodies and self-regulatory organizations, including, for example, the SEC and the Nasdaq Capital Market, which are responsible for the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with these new and changing laws and regulations have resulted in and are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Moreover, as these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalties and this may harm our business.

Fluctuations in the price of crude oil and oil-based products may adversely affect our business

We are exposed to risks arising from fluctuations in the price of crude oil, which can be volatile. Any material or sustained decline in crude oil prices, or change in buyer preferences, could have a material adverse effect on our performance.

Crude oil prices are affected by numerous factors beyond our control, including worldwide oil supply and demand. The price of crude oil may be affected by numerous factors such as:

•        the level of economic activity in the markets we serve;

•        regional political developments and military conflicts;

•        economic sanctions;

•        weather conditions and natural disasters;

•        conservation and environmental protection efforts;

•        the level of crude oil inventories;

•        the ability of the Organization of Petroleum Exporting Countries (“OPEC”) and other major oil-producing or oil-consuming nations to influence global production levels and prices;

•        governmental regulations and actions, including the imposition of taxes and trade restrictions;

•        market uncertainty;

•        exchange rates;

•        speculative activities by those who buy and sell oil and gas on the world markets, including commodity futures trading;

•        availability and capacity of infrastructure, processing facilities and necessary transportation;

•        supply chain disruptions;

•        the price and availability of new technology;

•        the availability and cost of alternative sources of energy; and

•        the impact of climate change considerations and actions towards energy transition on the demand for the products in which we trade in.

A low crude oil price environment or decline in the price of crude oil could adversely affect our business, results of operations and financial condition. They could also negatively impact our ability to access sources of capital, including equity and debt markets.

Our susceptibility to litigation, arbitration and other proceedings could have an adverse effect on our business

We may be, from time to time, involved in various litigation matters arising in the ordinary course of business, or otherwise. These matters may include, among other things, contract disputes, personal injury claims, employment matters, environmental matters, governmental claims for taxes or duties, securities, or commodities matters. The potential costs to resolve any claim or other litigation matter, or a combination of these, may have a material adverse effect on us because of potentially negative outcomes, the costs associated with asserting our claims or defending such lawsuits, and the diversion of management’s attention to these matters.

We are subject to the risk of labor disputes

We employ employees in Singapore and are subject to the local labor laws of Singapore. While we have not been materially adversely affected by any labor-related developments or industrial action in the past, there can be no assurance that such developments or actions may not occur in the future. Such occurrences may have a material adverse impact on our business, financial condition and results of operations.

Any fraudulent behavior by our employees and/or third parties may have an adverse effect on us

Our employees or third parties could engage in fraudulent behavior which could lead to potential criminal, civil and employment sanctions as well as negative publicity. This could result in a material adverse effect on our business, financial condition and results of operations. Our operations are subject to various anti-bribery laws, including the Prevention of Corruption Act 1960 of Singapore and the U.S. Foreign Corrupt Practices Act. Our employees and/or third parties acting as agents for us could engage in fraudulent behavior against us on their own or others’ initiative and act against our interests. Such actions could include, entering into agreements with our competitors thereby limiting free competition, document fraud, bribes, fraudulent commission agreements, facilitation payments and bribes to get access to exclusive business, among others. Whether intentional or not, such actions could potentially expose us to potential legal liabilities and reputational harm.

Our operations are subject to cyber security risks that could have a material adverse effect on our business, financial condition and results of operations

Information technology plays a crucial role in all of our operations. To remain competitive, our hardware, software and related services must interact with our suppliers and customers efficiently, record and process our financial transactions accurately, and obtain the data and information to enable the analysis of trends and plans and the execution of our strategies. Our information technology systems are subject to possible breaches and other threats that could cause us harm. If our systems for protecting against cyber security risks prove not to be sufficient, we could be adversely affected by, among other things, loss or damage of intellectual property, proprietary information, or customer data; interruption of business operations; or additional costs to prevent, respond to, or mitigate cyber security attacks. These risks could have a material adverse effect on our business, financial condition and results of operations.

Nonetheless, our business model does not heavily rely on third-party software or services, particularly those that are directly integrated into our products or operations. This reduces our dependency on external technology and lessens the potential impact of cybersecurity breaches or disruptions originating from these third-party entities. While data breaches and operational disruptions can still occur, the physical presence of our business allows for alternative methods of product distribution and customer service, reducing the overall impact of cybersecurity related incidents on our operations. Despite our perception of the lower risk of cybersecurity related incidents materially affecting our operations, we plan to prioritize the implementation of cybersecurity measures to maintain a secure and reliable business environment. For example, we plan to (i) conduct more rigorous assessments of potential suppliers’ cybersecurity practices, including penetration testing and vulnerability assessments; (ii) incorporate cybersecurity clauses into our business contracts; (iii) include specific security requirements and data protection protocols in our vendor contracts to ensure consistent cybersecurity standards across our supply chain; (iv) educate our employees on cybersecurity threats by providing training for employees to recognize and report phishing attempts, social engineering tactics, and other cyber threats; and (v) implement cybersecurity awareness tools and simulations to test employees’ knowledge and response to potential threats. By implementing these measures, we hope that our ability to respond to and recover from any eventual cybersecurity incidents will be enhanced.

We are exposed to the credit risks of our customers

We extend credit terms of up to 90 days for our customers. Our average accounts receivable turnover days were approximately 19.4 days, and 2.6 days for the financial years ended December 31, 2022, and 2023, respectively. Our average accounts receivable turnover days were approximately 4.9 days, and 2.8 days for the six months period ended

June 30, 2023 and 2024, respectively. Our customers may be unable to meet their contractual payment obligations to us, either in a timely manner or at all. The reasons for payment delays, cancellations or default by our customers may include insolvency or bankruptcy, or insufficient financing or working capital due to late payments by their respective customers. While we did not experience any material order cancellations by our customers during the financial years ended December 31, 2022 and 2023 and the six months period ended June 30, 2024, there is no assurance that our customers will not cancel their orders and/or refuse to make payment in the future in a timely manner or at all. We may not be able to enforce our contractual rights to receive payment through legal proceedings. In the event that we are unable to collect payments from our customers, we are still obliged to pay our suppliers in a timely manner and thus our business, financial condition and results of operations may be adversely affected.

Our business is subject to supply chain interruptions

We rely on our suppliers’ abilities to deliver our products as part of the supply chain logistics. The factors that can adversely affect our operations include, but are not limited to:

•        interruptions to our suppliers’ delivery capabilities;

•        failure of our suppliers to meet our standards or their commitments to us;

•        increased transportation costs, shipping constraints or other factors that could impact cost, such as having to find more expensive suppliers which may or may not be readily available; and

•        the reoccurrence of COVID-19 and disruptions as a result of efforts to control or mitigate the pandemic (such as facility closures, governmental orders, outbreaks and/or transportation capacity).

Any increased costs from delays, cancellations, and insurance, or disruption to, or inefficiency in, the supply chain network of our suppliers, whether due to geopolitical conflicts such as Russia’s invasion of Ukraine or the conflicts in the Middle East, COVID-19, outbreaks, the Uyghur Forced Labor Protection Act (“UFLPA”) or other factors, could affect our revenue and profitability. If we fail to manage these risks effectively, we could experience a material adverse impact on our reputation, revenue, and profitability. Russia’s invasion of Ukraine led to significant geopolitical tensions and subsequent import and export bans. While we do not source any of our products from suppliers in Russia or trade with any customers from Russia, these trade sanctions and restrictions have affected global supply chains and led to an increase in procurement, transportation and labor costs for our crude oil and oil-based products. Our supply chains were materially impacted by the war, leading to increased costs. However, we were able to mitigate this impact due to our strong market position and pricing power, which allowed us to pass these costs on to our customers through back-to-back agreements. As a result, our business, results of operations and financial condition for the financial years ended December 31, 2022 and 2023 and the six months period ended June 30, 2024 were not materially impacted by such increase in costs. However, we may not always be able pass all of our costs on, and our revenue and profitability may be affected by future supply chain disruptions if we are unable to manage such risks effectively. Furthermore, such supply chain disruptions have an indirect impact on our business as the uncertainty and volatility in the global oil market that followed caused disruptions for our customers, leading to a decrease in demand for our crude oil and oil-based products. As a result, we experienced a decrease in revenue for the financial year ended December 31, 2023. In relation to the Russia-Ukraine conflict, as of the date of this prospectus, the global oil market and demand for oil have since stabilized, and we do not anticipate any further significant impacts from the ongoing conflict. However, should there be new developments in the Russia-Ukraine conflict, such as further escalations or additional sanctions, these could lead to renewed volatility in the global oil market and a potential decrease in demand for our crude oil and oil-based products.

Moving forward, we do not expect to experience such supply chain disruptions in the future because we source our goods from a number of suppliers. To the best of our knowledge, we have not received any information from our suppliers pertaining to any present or potential supply chain disruptions as well. Pertaining to the UFLPA, we understand from our suppliers that the crude oil and oil-based products we have procured are not derived from raw materials obtained from forced labor in China’s Xinjiang Uyghur Autonomous Region.

Our existing credit facilities contain certain covenants and restrictions that may limit the flexibility of our Company in the way in which we organize our subsidiaries and/or operate our business

We are currently party to two existing short term credit facilities with the Bank of China Limited (Singapore Branch) (“BOC”) and United Overseas Bank Limited (“UOB”) respectively. The terms of such credit facilities provide, among others, that the Company is not to undertake or permit any reorganization, amalgamation, reconstruction, takeover, or change of shareholders without the respective bank’s prior written consent. Although we have sought

consent from the respective banks to confirm that the reorganization and listing of our Ordinary Shares on the Nasdaq Capital Market will not cause a breach of the credit facilities and/or in any way affect their validity or any part thereof, we have not received such confirmation from the relevant banks.

We therefore cannot assure you that we are not in default of or that we are in full compliance with the terms of our credit facilities with BOC and UOB. Notwithstanding the above, the amount outstanding with respect to these credit facilities is zero. Further, in the event that we utilize the credit facilities prior to confirmation being obtained from these banks and are required to make immediate repayment, our directors and management believe that we will be able to repay the borrowings without significantly affecting our cash flows and/or operations. Our directors and management are also of the view that there will be no material adverse effect on our business and operations even in the event the banks terminate such short term credit facilities, as (i) we do not draw down on these facilities regularly given that there are no amounts outstanding currently, and (ii) we have alternative sources of liquidity and financing that we can tap on without the need for such back to back letters of credit to be issued.

Risks Related to Our Securities and This Offering

We may not maintain the listing of our Ordinary Shares on the Nasdaq Capital Market, which could limit investors’ ability to make transactions in our Ordinary Shares and subject us to additional trading restrictions

We intend to list our Ordinary Shares on the Nasdaq Capital Market concurrently with this offering. In order to continue listing of our Ordinary Shares on the Nasdaq Capital Market, we must maintain certain financial and share price levels and we may be unable to meet these requirements in the future. We cannot assure you that our Shares will continue to be listed on the Nasdaq Capital Market in the future.

If the Nasdaq Capital Market delists our Ordinary Shares and we are unable to list our Shares on another national securities exchange, we expect that our Shares could be quoted on an over-the-counter market in the United States. If this were to occur, we could face significant material adverse consequences, including:

•        a limited availability of market quotations for our Ordinary Shares;

•        reduced liquidity for our Ordinary Shares;

•        a determination that our Ordinary Shares are “penny stock,” which will require brokers trading in our Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares;

•        a limited amount of news and analyst coverage; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

As long as our Ordinary Shares are listed on the Nasdaq Capital Market, U.S. federal law prevents or preempts the states from regulating their sale. However, the law does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar their sale. Further, if we were no longer listed on the Nasdaq Capital Market, we would be subject to regulations in each state in which we offer our shares.

Any of these factors may result in significant and sudden changes in the volume and price at which our shares will trade.

In the event of market volatility, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we are involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether successful or not, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

An active trading market for our Ordinary Shares may not be established or, if established, may not continue and the trading price for our Ordinary Shares may fluctuate significantly

We cannot assure you that a liquid public market for our Ordinary Shares will be established. If an active public market for our Ordinary Shares does not occur following the completion of this offering, the market price and liquidity of our Ordinary Shares may be materially and adversely affected. The public offering price for our Ordinary Shares

in this offering was determined by negotiation between us and the underwriter based upon several factors, and we can provide no assurance that the trading price of our Ordinary Shares after this offering will not decline below the public offering price. As a result, investors in our Ordinary Shares may experience a significant decrease in the value of their shares or the loss of their entire investment.

The trading price of our Ordinary Share may be volatile, which could result in substantial losses to investors

The trading price of our Ordinary Shares may be subject to rapid and substantial volatility, which could make it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares and result in substantial losses to investors.

There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent initial public offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with a relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In particular, our Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares.

The volatility and fluctuations in the trading price of our Ordinary Shares may be due to factors beyond our control and for reasons that are unrelated to our actual or expected performance. In addition, if the trading volumes of our Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Ordinary Shares. This low volume of trades could also cause the price of our Ordinary Shares to fluctuate greatly. Holders of our Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Ordinary Shares.

In addition to market and industry factors, the price and trading volume for our shares may be highly volatile for factors specific to our own operations, including the following:

•        fluctuations in our revenues, earnings and cash flow;

•        changes in financial estimates by securities analysts;

•        additions or departures of key personnel;

•        release of lock-up or other transfer restrictions on our issued and outstanding equity securities or sales of additional equity securities; and

•        potential litigation or regulatory investigations.

Certain recent initial public offerings of companies with public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Ordinary Shares

In addition to the risks addressed above in “— The trading price of our Ordinary Shares may be volatile, which could result in substantial losses to investors,” our Ordinary Shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance. Although the specific cause of such volatility is unclear, our anticipated public float may amplify the impact the actions taken by a few shareholders have on the price of our shares, which may cause our share price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. Should our Ordinary Shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Ordinary Shares. In addition, investors of our Ordinary Shares may experience losses, which may be material, if the price of our Ordinary Shares declines after this offering or if such investors purchase our Ordinary Shares prior to any price decline.

The sale or availability for sale of substantial amounts of our Ordinary Shares, including the Ordinary Shares held by our Resale Shareholders that are being registered concurrently for resale in the Resale Prospectus, could adversely affect the market price

Sales of substantial amounts of our Ordinary Shares in the public market after the completion of this offering and from the sale of shares held by our Resale Shareholders through the Resale Prospectus, or the perception that these sales could occur, could adversely affect the market price of our shares and could materially impair our ability to raise capital through equity offerings in the future. Prior to the sale of our shares in this offering, we have [•] Ordinary Shares outstanding. The Ordinary Shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act. The shares held by the Resale Shareholders do not form part of the Offering and may be sold in the public market pursuant to the Resale Prospectus. The Resale Shareholders will agree not to sell any shares until 30 days following the closing of this offering without the prior written consent of the Representative. The Resale Shareholders may be willing to accept a lower sales price than the price investors pay in this offering, which could substantially lower the market price of our Ordinary Shares. We cannot predict what effect, if any, market sales of securities held by the Resale Shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our shares. See “Underwriting” and “Shares Eligible for Future Sale” for a more detailed description of the restrictions on selling our securities after this offering.

There will be [16,350,000] Ordinary Shares outstanding immediately after this offering. In connection with this offering, our Directors and Executive Officers named in the section “Management”, other than as one of the Selling Shareholders, namely Mr. Xie through Mega Origin, have agreed not to sell any shares until 180 days after the date of this prospectus without the prior written consent of the Representative, subject to certain exceptions, unless the underwriters release these securities from these restrictions.

Because our public offering price per Ordinary Share is substantially higher than our net tangible book value per Ordinary Share, you will experience immediate and substantial dilution

If you purchase Ordinary Shares in this offering, you will pay substantially more than our net tangible book value per Ordinary Share. As a result, you will experience immediate and substantial dilution of US$[4.15] per Share, representing the difference between our as adjusted net tangible book value per Ordinary Share of US$[0.35] as of December 31, 2023, after giving effect to the net proceeds to us from this offering, assuming no change to the number of Shares offered by us as set forth on the cover page of this prospectus and an assumed public offering price of US$4.50 per Share (being the mid-point of the initial public offering price range as set out in the cover page of this prospectus). See “Dilution” for a more complete description of how the value of your investment in our Shares will be diluted upon the completion of this offering.

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Ordinary Shares, the market price for our Ordinary Shares and trading volume could decline

The trading market for our Ordinary Shares will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts downgrade our Ordinary Shares, the market price for our Ordinary Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our Ordinary Shares to decline.

You must rely on the judgment of our management as to the uses of the net proceeds from this offering, and such uses may not produce income or increase our share price

We intend to use the net proceeds of this offering due to us as set out in “Use of Proceeds.” However, our management will have considerable discretion in the application of the net proceeds received by us in this offering. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not improve our efforts to achieve or maintain profitability or increase our share price. The net proceeds due to us from this offering may be placed in investments that do not produce income or that lose value.

If we are classified as a passive foreign investment company, United States taxpayers who own our securities may have adverse United States federal income tax consequences

We are a non-U.S. corporation and, as such, we will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either

•        At least 75% of our gross income for the year is passive income; or

•        The average percentage of our assets (determined at the end of each quarter) during the taxable year that produce passive income or that are held for the production of passive income is at least 50%.

Passive income generally includes dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our securities, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

It is possible that, for our current taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular tax year. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Material Tax Considerations — Passive Foreign Investment Company Considerations.”

Short selling may drive down the market price of our Ordinary Shares

Short selling is the practice of selling shares that the seller does not own but rather has borrowed from a third party with the intention of buying identical shares back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the shares between the sale of the borrowed shares and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the shares to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling the shares short. These short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable publicity, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.

As a “controlled company” within the meaning of the Nasdaq Capital Market Rules, we may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies

We are and, upon the completion of this offering, will continue to be a “controlled company” as defined under the Nasdaq Capital Market Rules, because one of our shareholders, namely Mega Origin holds more than 50% of our voting power. As a result, for so long as we remain a controlled company as defined under that rule, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules of the Nasdaq Capital Market Rules including:

•        an exemption from the rule that a majority of our Board of Directors must be Independent Directors;

•        an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by Independent Directors; and

•        an exemption from the rule that our director nominees must be selected or recommended solely by Independent Directors.

We do not intend to rely on these exemptions applicable to a “controlled company” and will instead rely on the exemptions provided to foreign private issuers to be exempt from the corporate governance requirements of the Nasdaq Capital Market listing rules. However, in the event we cease to be a foreign private issuer, we intend to rely on these exemptions applicable to a “controlled company”. As a result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

Mr. Xie, our Executive Director and an indirect controlling shareholder, will continue to have significant influence over us after this offering, including control over decisions that require the approval of shareholders, which will limit your ability to influence the outcome of matters submitted to shareholders for a vote.

We are currently controlled, and after this offering is completed will continue to be controlled, indirectly by Mr. Xie. Upon completion of this offering, Mr. Xie, through Mega Origin, will control [56.1]% of the voting power of our Ordinary Shares. As long as Mr. Xie directly or indirectly owns or controls at least a majority of our outstanding voting power, he will have the ability to exercise substantial control over all corporate actions requiring shareholder approval, irrespective of how our other shareholders may vote, including the election and removal of Directors and the size of our Board of Directors, any amendment of our charter documents, or the approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets. Even if Mr. Xie’s indirect ownership falls below 50%, he will continue to be able to strongly influence or effectively control our decisions. Mr. Xie, will indirectly control [56.1]% of the voting power of our Ordinary Shares following the completion of this offering. Additionally, Mr. Xie’s interests, or the interests of our Executive Officers and Directors as a whole, may not align with the interests of our other shareholders.

As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq Capital Market corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq Capital Market corporate governance listing standards

As a foreign private issuer that has applied to list our Ordinary Shares on the Nasdaq Capital Market, we rely on a provision in the Nasdaq Capital Market corporate governance listing standards that allows us to follow Cayman Islands law with regard to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on the Nasdaq Capital Market.

Following this offering, we intend to rely on home country practice to be exempted from certain of the corporate governance requirements of Nasdaq, namely; (i) there will not be a necessity to have regularly scheduled executive sessions with independent Directors; and (ii) there will be no requirement for the Company to obtain Shareholder approval prior to an issuance of securities in connection with (a) the acquisition of stock or assets of another company; (b) equity-based compensation of Executive Officers, Directors, employees or consultants; (c) a change of control; and (d) transactions other than public offerings.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law

We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed by our Amended and Restated Memorandum and Articles of Association, the Companies Act and the common law of the Cayman Islands. We will also be subject to the U.S. securities laws. The rights of shareholders to take action against our Directors and us, actions by minority shareholders and the fiduciary duties of our Directors to us under Cayman Islands law are governed by our Amended and Restated Memorandum and Articles of Association, the Companies Act and the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands (as compared to the U.S. law) as well as from English common law. The decisions of the English courts are of highly persuasive authority, but are not binding on Cayman Islands courts (except for those decisions handed down from the Judicial Committee of the Privy Council to the extent that these have been appealed from the Cayman Islands courts). The rights of our shareholders and the fiduciary duties of our Directors under Cayman Islands law are broadly similar to those in other common law jurisdictions, but there may be differences in the statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws than the United States, and provide significantly less protection to investors. In addition, if shareholders want to proceed against the Company outside of the Cayman Islands, they will need to demonstrate that they have the standing to initiate a shareholder derivative action in a federal court of the United States. There is no guarantee that the courts of the Cayman Islands would automatically recognize or

enforce against us judgments of courts of Singapore or the United States predicated upon the civil liability provisions of the Singapore securities laws or the federal securities laws of the United States or any state. In addition, the courts of the Cayman Islands will not recognize and enforce a judgment predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are taxes, fines or penal in nature, or otherwise contrary to public policy, including punitive damages.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the Amended and Restated Memorandum and Articles of Association, the register of mortgages and charges and any special resolutions passed by shareholders) or to obtain copies of lists of shareholders of these companies. Our Directors are not required under our Amended and Restated Memorandum and Articles of Association to make our corporate records available for inspection by our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as U.S. states These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing requirements of such exchanges. Following this offering, we intend to rely on home country practice to be exempted from certain of the corporate governance requirements of Nasdaq, namely; (i) there will not be a necessity to have regularly scheduled executive sessions with Independent Directors; and (ii) there will be no requirement for the Company to obtain Shareholder approval prior to an issuance of securities in connection with (a) the acquisition of stock or assets of another company; (b) equity-based compensation of Executive Officers, Directors, employees or consultants; (c) a change of control; and (d) transactions other than public offerings. Accordingly, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the Board or controlling shareholder than they would as shareholders of a company incorporated in a U.S. state. For a discussion of significant differences between the provisions of the Companies Act and the laws applicable to companies incorporated in a U.S. state and their shareholders, see “Certain Cayman Islands Company Considerations — Differences in Corporate Law.”

Recently introduced economic substance legislation of the Cayman Islands may impact us or our operations

The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity. Effective January 1, 2019, the International Tax Co-operation (Economic Substance) Act (as amended) (the “Substance Law”) and issued Regulations and Guidance Notes came into force in the Cayman Islands introducing certain economic substance requirements for “relevant entities” which are engaged in certain “relevant activities,” which in the case of exempted companies incorporated before January 1, 2019, will apply in respect of financial years commencing July 1, 2019, onwards. A “relevant entity” includes an exempted company incorporated in the Cayman Islands; however, it does not include an entity that is tax resident outside the Cayman Islands. Accordingly, for so long as we are a tax resident outside the Cayman Islands, we are not required to satisfy the economic substance test under the Substance Law. Although it is presently anticipated that the Substance Law will have little material impact on us or our operations, as the legislation is new and remains subject to further clarification and interpretation it is not currently possible to ascertain the precise impact of these legislative changes on us.

Certain judgments obtained against us by our shareholders may not be enforceable

We are a Cayman Islands exempted company with limited liability and substantially all of our assets are located outside of the United States. In addition, all of our current Directors and Executive Officers are nationals and residents of countries other than the United States and substantially all of the assets of these persons are located outside the United States. Service of court documents on a Cayman Islands company can be effected by serving the documents at the company’s registered office and it may be possible to enforce foreign judgments in the Cayman Islands against a Cayman Islands company, subject to some exceptions. However, if investors wish to serve documents on and/or enforce foreign judgments against our Directors and Executive Officers, they will need to ensure that they comply with the rules of the jurisdiction where our Directors and Executive Officers are located. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. Even if you are successful in bringing an action of

this kind, the laws of the Cayman Islands may render you unable to enforce a judgment against our assets or the assets of our Directors and Executive Officers. For more information regarding the relevant laws of the Cayman Islands, see “Enforcement of Civil Liabilities.” As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our Executive Officers, Directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States, depending on where our Directors and Executive Officers are located.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period. As a result of this election, our future financial statements may not be comparable to other public companies that comply with the public company effective dates for these new or revised accounting standards.

We are a foreign private issuer within the meaning of the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

•        the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;

•        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 selective disclosure rules by issuers of material non-public information under Regulation FD.

We will be required to file an annual report on Form 20-F within four months of the end of each financial year. In addition, we intend to publish our financial results on a semi-annual basis through press releases distributed pursuant to the rules and regulations of the Nasdaq Capital Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you if you were investing in a U.S. domestic issuer.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to us

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last Business Day of an issuer’s most recently completed second financial quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2025. In the future, we would lose our foreign private issuer status if (i) more than 50% of our outstanding voting securities are owned by U.S. residents; and (ii) a majority of our Directors or Executive Officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid the loss of foreign private issuer status. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to comply with

ENFORCEABILITY OF CIVIL LIABILITIES

Our Company is an exempted company incorporated with limited liability under the laws of the Cayman Islands. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, Cayman Islands companies may not have standing to sue before the U.S. federal courts.

All of our current operations are conducted outside of the United States and all of our current assets are located outside of the United States, with the majority of our operations and current assets being located in Singapore. All of the Directors and Executive Officers of our Company and the auditors of our Company reside outside the United States and substantially all of their assets are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or any such persons, or to enforce in the United States any judgment obtained in the U.S. courts against us or any of such persons, including judgments based upon the civil liability provisions of the U.S. securities laws or any U.S. state or territory.

We have appointed [Cogency Global Inc., 122 E. 42nd Street, 18th Floor, New York, New York 10168] as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Cayman Islands

Conyers Dill & Pearman, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of the U.S. courts obtained against us or our Directors or Executive Officers that are predicated upon the civil liability provisions of the U.S. securities laws or any U.S. state; or (ii) entertain original actions brought in the Cayman Islands against us or our Directors or Executive Officers that are predicated upon the U.S. securities laws or the securities laws of any U.S. state.

We have been advised by Conyers Dill & Pearman that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands would recognize as a valid judgment, a final and conclusive judgment in personam obtained in the federal or state courts of the United States against the Company under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) or, in certain circumstances, an in personam judgment for non-monetary relief, and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules of natural justice of the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from United States courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

Singapore

There is uncertainty as to whether the courts of Singapore would (i) recognize or enforce judgments of United States courts obtained against us or our Directors or Executive Officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in Singapore against us or our Directors or Executive Officers predicated upon the securities laws of the United States.

In making a determination as to enforceability of a judgment of the courts of the United States, and subject to the Singapore courts having jurisdiction over the judgment debtor, the Singapore courts would have regard to whether the judgment was final and conclusive on the merits of the case, given by a court of law of competent jurisdiction, and was expressed to be for a definite sum of money. In general, an in personam foreign judgment that is final and conclusive

(that is, in general, a judgment that makes a final determination of rights between the parties and cannot be re-opened or altered by the court that delivered it, or be overridden by another body not being an appellate or supervisory body, although it may be subject to an appeal), given by a competent court of law having jurisdiction over the parties subject to such judgment, and for a fixed or ascertainable sum of money, may be enforceable as a debt in the Singapore courts under common law. However, a foreign judgment will generally not be enforced, even if it satisfies the requirements above, if it was 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 fundamental public policy of Singapore, 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 (save where any such component of the judgment can be duly severed from the rest of the judgment sought to be enforced). Civil liability provisions of the federal and state securities law of the United States permit the award of punitive damages against us, our Directors or Executive Officers. Singapore courts would not recognize or enforce judgments against us, our Directors or Executive 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.

USE OF PROCEEDS

We expect to receive approximately US$[3.75] million of net proceeds from this offering after deducting underwriting discounts and commissions of US$[0.46] million and estimated offering expenses of approximately US$[1.87] million payable by us. We will not receive any proceeds from the sale of the Ordinary Shares by the Selling Shareholders.

We currently intend to use net proceeds due to us from this offering in the following ways:

(i)     approximately 25.0% for the expansion of our product offerings;

(ii)    approximately 25.0% for strengthening our market position;

(iii)   approximately 25.0% for potential strategic acquisitions and business cooperations, including joint ventures and/or strategic alliances. We have not identified any specific target for acquisition yet, although these are likely to be businesses that complement our current business, including oil trading businesses and oil trading related service providers; and

(iv)   the balance of approximately 25.0% will be used for general working capital and corporate purposes.

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 registration statement. We reserve the right to change the use of proceeds that we presently anticipate and describe herein.

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.

CAPITALIZATION

The following table sets forth our capitalization as of September 30,2024:

•        on an actual basis; and

•        on a pro forma as adjusted basis to reflect (i) the above; (ii) the issuance and sale of [1,350,000] Ordinary Shares in this offering at an assumed initial public offering price of US$[4.50] per Ordinary Share (being the midpoint of the offer price range set out in the cover page of this prospectus), after deducting underwriting discounts and estimated offering expenses payable by us.

The pro forma as adjusted information below is illustrative only, and our capitalization following the completion of this offering is subject to adjustment based on the actual net proceeds to us from the offering. You should read this table in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

Indebtedness

A table describing our indebtedness as of September 30, 2024 is as follows:

Shareholder loan pertain to loans entered into with Mega Origin on January 1, 2024, The loan quantum is US$5,000,000 with simple annual interests charged at 3.5% per annum. The loan is for a period of two years and not repayable upon demand, save upon the request by Delixy Energy, whichever earlier.

DELIXY HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Amount in USD thousands, except for share and per share data, or otherwise noted)

DELIXY HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
(Amount in USD thousands, except for share and per share data, or otherwise noted)

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion and analysis and other parts of this prospectus contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this prospectus. You should carefully read the “Risk Factors” section of this prospectus to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are principally engaged in the trading of oil related products, which can be broadly categorized into (i) crude oil and (ii) oil-based products such as fuel oils, motor gasoline, additives, gas condensate, base oils, asphalt, petrochemicals and naphtha (heavy gasoline).

We trade our products across multiple countries in Southeast Asia and East Asia, and we have established a presence in the oil trading markets in these countries. For the financial years ended December 31, 2022 and 2023, our total trading volume increased by 17.9% from 2,765 kBBLs (where 1 kBBL is equal to 1,000 barrels of oil) to 3,261 kBBLs, respectively. For the financial years ended December 31, 2022 and 2023, our total trading revenue decreased by 9.6% from US$319,804,000 to US$289,166,000, respectively. For the six months period ended June 30, 2023 and 2024, our total trading volume increased by 8.5% from 1,514 kBBLs (where 1 kBBL is equal to 1,000 barrels of oil) to 1,643 kBBLs, respectively. For the six months period ended June 30, 2023 and 2024, our total trading revenue increased by 23.7% from US$116,247,000 to US$143,761,000, respectively.

Crude oil trading represents a core aspect of our business as it accounts for a significant portion of our revenue. For the financial years ended December 31, 2022 and 2023, trading in crude oil represented 73.5% and 87.2% of our total trading revenue, respectively. The trading in various oil-based products make up the rest of our total trading revenue and for the financial years ended December 31, 2022 and 2023, these make up 26.5% and 12.8% of our total trading revenue, respectively. For the six months period ended June 30, 2023 and 2024, trading in crude oil represented 97.4% and 50.1% of our total trading revenue, respectively. The trading in various oil-based products make up the rest of our total trading revenue and for the six months period ended June 30, 2023 and 2024, these make up 2.6% and 49.9% of our total trading revenue, respectively.

We typically enter into back-to-back agreements with our suppliers after our customer has agreed on the terms of the purchase so as to reduce our exposure and trading risks. We may also enter into swap agreements or trade in oil and oil-based products derivatives to further hedge our positions.

We leverage on our strong existing relationships with our customers and suppliers as well as our deep experience and understanding of the oil industry to provide certain value-added services to our customers. This includes recommending to our customers optimal trading strategies tailored to their specific needs, and providing shipping and logistical support where required. In addition, our financing capabilities allow us to extend credit terms to our customers while satisfying the immediate payment terms required by our suppliers.

KEY FACTORS AFFECTING THE RESULTS OF OUR GROUP’S OPERATIONS

We believe our financial condition and results of operations have been and will continue to be affected by a number of factors, many of which may be beyond our control, including those factors set out in the section headed “Risk Factors” in this prospectus and those set out below:

•        Government Policies and Regulations:

Our business operations are governed by various laws, regulations and government policies in Singapore. These laws and regulations may change from time to time. We may be unable to comply with all these requirements in time or at all or we may need to incur substantial costs to be compliant, which may adversely affect our business operations and financial condition.

•        Economic Conditions:

Our business is driven by crude oil prices, which are affected by both domestic and global supply and demand factors. A prolonged economic slowdown, a global recession, adverse events relating to the energy industry and local, regional and national economic conditions and factors could negatively impact our operations and therefore adversely affect our business, financial condition and results of operations. The risks associated with our business are more acute during periods of economic slowdown or recession because such periods may lead to greater fluctuations in crude oil prices and/or decreased demand for crude oil and oil-based products.

•        Competition:

We compete with various international and local service providers. Competition may result in pricing pressures, declining revenue and profitability, or a loss of market share. We face competitors who may have strong competitive advantages, including longer operating histories, larger and broader customer bases, lower operating costs, more established relationships with a broader set of suppliers and customers, greater brand recognition, and greater financial, research and development, marketing, distribution, and other resources than us. In addition, new companies may enter the market with innovative business models or more appealing service offerings and disrupt the competitive landscape, making it even more challenging for us to maintain our market position. There is no guarantee that our strategies will remain competitive or successful in the future. Increased competition may result in pricing pressures and loss of our market share, which could have a material adverse effect on our business, financial condition and results of operations.

•        Customer Demand and Preferences:

If our customers’ requirements change or if the demand for crude oil declines for any reason, including due to any fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices, there may be a potential loss in revenue which would adversely affect our profitability.

•        Hedging Activities:

We may use hedging strategies to cover any outstanding positions we may hold from time to time. These strategies may be unsuccessful because there may be an imperfect correlation, or no correlation, between the price movements of the hedging instrument and the price movements of the trade being hedged. We are subject to the risk that our counterparty will default on its obligation to pay us, as well as the risk that we will not be able to meet our obligations to pay the other party to the agreement. Swap agreements may also involve the risk that there is an imperfect correlation between the return on our obligation to the counterparty and the return on the referenced asset. In addition, swap agreements are subject to market and illiquidity risk, leverage risk and hedging risk. The value of swaps, like many other derivatives, may move in unexpected ways and may result in losses for us. There can be no assurance that our hedging transactions (including by way of swap arrangements) will be effective. The use of hedging may also result in certain adverse tax consequences, and may also reduce our potential for profit.

•        Public Health Events

The outbreaks of diseases or pandemics could result in, among other things, operational disruptions, the lack of an adequate workforce in parts of or all of our operations and communications and transportation disruptions. This in turn could lead to decreased consumer confidence and spending, and increased volatility in Singapore, the United States and the global financial markets and economy. As a result, our business operations and financial performance may be adversely affected.

Regular monitoring, strategic adaptation, and proactive management of these factors are crucial to maintaining the resilience and success of our group’s operations.

Results of Operations

Comparison of Results of Operations for the Six Months Period Ended June 30, 2023 and 2024

Revenue

Total revenue increased by approximately US$27,514,000 or 23.7% from approximately US$116,247,000 for the six months period ended June 30, 2023 to approximately US$143,761,000 for the six months period ended June 30, 2024.

The increase in our revenue was primarily due to the fuel oil pricing cheaper in first half 2024 which lead to an increase in trading volume of fuel oil and the sale of MTBE to Southeast Asia increased as well. However, the decrease in sale of blend crude oil was due to crack margin poor in East Asia.

As set forth in the following table, for the six months period ended June 30, 2023 and 2024, our revenue was derived from the following segment:

Revenue by geographical location

For the six months period ended June 30, 2023 and 2024, substantially all of our revenue was derived from customers located in Southeast Asia and East Asia.

For the six months period ended June 30, 2023 and 2024, the percentage of revenue derived from customers in the PRC was 97.4% and 92.1% respectively, while the percentage of products that we source from suppliers in the PRC was 100% and 50.3% respectively. This is due to the sale of MTBE and fuel oil to Southeast Asia and East Asia increased.

Cost of revenue

Our cost of revenue primarily consists of purchases of crude oil and oil-based products. For the six months period ended June 30, 2023 and 2024, our cost of revenue was US$115,131,000 and US$141,959,000, respectively.

The increase in our cost of revenue was primarily due to increase in trading volume of MTBE and fuel oil. However, the decrease in cost of revenue for blend crude oil was due to crack margin poor in East Asia.

Gross profit and gross profit margin

Gross profit margin was approximately 1%, for both six months period ended June 30, 2023 and 2024. Our gross profit amounted to approximately US$1,116,000 and US$1,802,000, respectively, for the six months period ended June 30, 2023 and 2024.

Our gross profit increased by approximately US$686,000 during the six months period ended June 30, 2023 and 2024 as the products we had sold during the six months period ended June 30, 2024 commanded a higher margin.

General and administrative expenses

For the six months period ended June 30, 2023 and 2024, our general and administrative expenses increased by approximately US$716,000 or 78% from approximately US$919,000 for the six months period ended June 30, 2023 to approximately US$1,635,000 for the six months period ended June 30, 2024, each representing approximately 1% of our total revenue for the respective financial years.

The following table sets forth the breakdown of our general and administrative expenses for the six months period ended June 30, 2023 and 2024, respectively, indicated:

Commission mostly comprises compensation paid to employees for any successful sales they make.

Depreciation and amortization expenses are charged on our property and equipment and also right-of-use asset.

Increase in freight and handling charges due to increase in trading volume of MTBE which lead to an increase in MTBE vessels leasing.

Interest expenses are charged on new loan from shareholder with simple annual interests charged at 3.5% per annum.

Legal and professional fees consist of audit, tax and secretarial fees. No legal fees related to any lawsuit noted.

Letter of credit charges mainly represent charges incurred on trade-related activities such as letter of credits and bill payables.

Staff costs mainly represent the salaries, employee benefits and retirement benefit costs to our employees and directors’ remuneration. Staff costs increased by approximately US$18,000 or 10.7% from approximately US$168,000 for the six months period ended June 30, 2023 to approximately US$186,000 for the six months period ended June 30, 2024. Such increase was mainly attributable to the increase of staff costs due to the growth of overall business, leading to the expansion of staff (recruited new trader). The cost consists of employees’ salary, bonuses & allowances, and CPF Contributions.

Other expenses comprised office supplies and other general expenses.

Other income

For the six months period ended June 30, 2023 and 2024, our other income increased by approximately US$156,000 or 90.7% from approximately US$172,000 for the six months period ended June 30, 2023 to approximately US$328,000 for the six months period ended June 30, 2024, primarily due to the gain on disposal of property.

The following table sets forth the breakdown of total other income for the six months period ended June 30, 2023 and 2024 respectively, indicated:

____________

*        — Denotes amount less than US$1,000.

Interest income

Interest income earned from bank fixed deposit.

Gain on disposal of property

To rationalize the operations of our Group in anticipation of our listing, on June 28, 2024, Delixy sold a property at 883 North Bridge Road #04-01, Southbank, Singapore 198785 (the “Property”) to Wisecome Oil Pte. Ltd. for a consideration of S$1,300,000 pursuant to a sale and purchase agreement dated June 28, 2024. The consideration for the disposal of the Property was based on the fair value of the Property as determined by an external, independent and qualified valuer undertaken on May 8, 2024.

Income tax expense

Our income tax expense decreased by approximately US$11,000 from approximately US$56,000 in the six months period ended June 30, 2023 to approximately US$45,000 for the six months period ended June 30, 2024. Our effective tax rate was 17.0%. For the six month period ended June 30, 2023 and 2024, our income tax expense comprised current tax expense.

Net income

As a result of the foregoing, our net income amounted to approximately US$313,000 and US$450,000 for the six months period ended June 30, 2023 and 2024, respectively.

Comparison of Results of Operations for the Financial Years Ended December 31, 2022 and 2023

Revenue

Total revenue decreased by approximately US$30,638,000 or 10% from approximately US$319,804,000 for the financial year ended December 31, 2022 to approximately US$289,166,000 for the financial year ended December 31, 2023.

Revenue generated equates to the total sales of product within the business. The decrease in revenue was mainly due to a significant decrease in market oil price as the fluctuation of pricing is a norm in this industry. The average of international oil price dropped from 2022 to 2023, from approximately US$113.47/bbl to US$88.30/bbl. This is mainly caused by the war between Russia and Ukraine.

As set forth in the following table, for the financial years ended December 31, 2022 and 2023, our revenue was derived from the following segment:

Revenue by geographical location

For the financial years ended December 31, 2022 and 2023, substantially all of our revenue was derived from customers located in Southeast Asia and East Asia.

For the financial years ended December 31, 2022 and 2023, the percentage of revenue derived from customers in the PRC was 75.9% and 87.2% respectively, while the percentage of products that we source from suppliers in the PRC was 88.9% and 57.5% respectively.

Cost of revenue

Our cost of revenue primarily consists of purchases of crude oil and oil-based products. For the financial years ended December 31, 2022 and 2023, our cost of revenue was US$317,407,000 and US$285,037,000, respectively.

The decrease in our cost of revenue was in line with the decrease in revenue and primarily due to the significant decrease in market oil price as the fluctuations of pricing is a norm in this industry.

Gross profit and gross profit margin

Gross profit margin was approximately 1%, for both financial years ended December 31, 2022 and 2023. Our gross profit amounted to approximately US$2,397,000 and US$4,129,000, respectively, for the financial years ended December 31, 2022 and 2023.

Our gross profit increased by approximately US$1,732,000 during the financial years ended December 31, 2022 and 2023 even though our revenue had declined as the products we had sold during the financial year ended December 31, 2023 commanded a higher margin.

General and administrative expenses

For the financial years ended December 31, 2022 and 2023, our general and administrative expenses increased by approximately US$827,000 or 38.0% from approximately US$2,180,000 for the financial year ended December 31, 2022 to approximately US$3,007,000 for the financial year ended December 31, 2023, each representing approximately 1.0% of our total revenue for the respective financial years.

The following table sets forth the breakdown of our general and administrative expenses for the  financial years ended December 31, 2022 and 2023, respectively, indicated:

Commission mostly comprises compensation paid to employees for any successful sales they make.

A common concept in international shipping, demurrage is a fee that must be paid when cargo remains at a port or terminal for longer than the agreed free time period specified in a shipping contract.

Depreciation and amortization expenses are charged on our property and equipment and also right-of-use asset.

Legal and professional fees consist of audit, tax and secretarial fees. No legal fees related to any lawsuit noted.

Letter of credit charges mainly represent charges incurred on trade-related activities such as letter of credits and bill payables.

Staff costs mainly represent the salaries, employee benefits and retirement benefit costs to our employees and directors’ remuneration. Staff costs increased by approximately US$196,000, or 78.0% from approximately US$251,000 for the financial year ended December 31, 2022 to approximately US$447,000 for the financial year ended December 31, 2023. Such increase was mainly attributable to the increase of staff costs due to the growth of overall business, leading to the expansion of staff (recruited new trader). The cost consists of employees’ salary, bonuses & allowances, and CPF Contributions.

Other expenses comprised insurance expenses, office supplies, repair and maintenance and other general expenses.

Other income

For the financial years ended December 31, 2022 and 2023, our other income increased by approximately US$150,000 or 143.0% from approximately US$105,000 for the financial year ended December 31, 2022 to approximately US$255,000 for the financial year ended December 31, 2023, primarily due to the interest income received by the Group from the placement of excess funds of the Group in fixed deposits.

The following table sets forth the breakdown of total other income for the financial years ended December 31, 2022 and 2023, respectively, indicated:

Interest income

Interest income earned from bank fixed deposit. The increase in interest income from the financial year ended December 31, 2022 to December 31, 2023 was primarily due to the interest income received by the Group from the placement of excess funds of the Group in fixed deposits. The Group had placed an additional US$2,228,000 in fixed deposits compared to the year ended December 31, 2022, generating a higher interest income for the Group.

Government grants

Government grants comprise mainly grants received for Jobs Growth Incentive (“JGI”) and Jobs Support Scheme (“JSS”).

The JGI supports employers to expand local hiring from September 2020 to March 2023.

The JSS is an initiative introduced by the Singapore Government in February 2020 in response to the outbreak of COVID-19, and further enhanced in April, May and August 2020, to provide wage support to employers to help them retain local employees by co-funding 25% to 75% of the first S$4,600 of monthly salaries paid to each local employee in a 10-month period up to August 2020, and 10% to 50% of the same in the subsequent seven-month period from September 2020 to March 2021. JSS was extended by another 6 months covering wages paid from April 2021 to September 2021.

For the financial year ended December 31, 2022, government grants of approximately US$4,000 comprise mainly JGI and JSS.

Income tax expense

Our income tax expense increased by approximately US$156,000 from approximately US$69,000 in the financial year ended December 31, 2022 to approximately US$225,000 for the financial year ended December 31, 2023. Our effective tax rate was 17.0%. For the financial years ended December 31, 2022 and 2023, our income tax expense comprised current tax expense.

Net income

As a result of the foregoing, our net income amounted to approximately US$253,000 and US$1,152,000 for the financial years ended December 31, 2022 and 2023, respectively.

Liquidity and Capital Resources

Our liquidity and working capital requirements primarily relate to our operating expenses. Historically, we have met our working capital and other liquidity requirements through a combination of cash generated from our operations and loans from banking facilities. Going forward, we expect to fund our working capital and other liquidity requirements from various sources, including but not limited to cash generated from our operations, loans from banking facilities, the net proceeds from this offering and other equity and debt financings, as and when appropriate. From time to time, in recognition of our strong financial position, certain financial institutions have been willing to extend short term credit facilities to us. We are currently party to two existing short term credit facilities with BOC and UOB respectively.

Pursuant to the terms of such credit facilities, the banks grant us lines of credit for, amongst others, (a) establishing irrevocable sight and/or usance import documentary letters of credits and/or standby letters of credit covering our purchase of crude oil and/or other petroleum products on a pre-sold basis against certain conditions including copies of purchase and sales contracts and a cash margin, (b) issuing term bills to finance bills drawn under the bank’s usance letters of credit, (c) trust receipt financing to bridge the financing gap between payment to supplier and receipt of export proceeds, and (d) freight financing in relation to our purchase of goods. These letters of credit are issued on a back to back basis, against, amongst others, one or more export letters of credit issued by banks acceptable to UOB and BOC respectively under their respective credit facilities. Accordingly, the amount under the letter of credit issued to us will be subject to the amount in the corresponding export letter of credit we provide. The facilities are uncommitted in nature and the availability of each utilization is subject to review and approval by the banks or specifically restricted to oil majors and/or national oil companies and/or producers and/or suppliers that are acceptable to the banks. The facilities are secured by, amongst others, a personal guarantee provided by Mr. Xie Dongjian, a pledge of goods in relation to the goods financed by the bank, a letter of charge and set-off, and a deed of charge and assignment for an assignment of, amongst others, all rights, interests and title under or in respect of purchase contracts and/or sales contracts pertaining to goods financed by the bank, goods financed by the bank and accounts maintained by the bank. Other terms and conditions include submitting our annual audited financial statements to the bank, complying with applicable environmental, social and governance laws and regulations, ensuring that the obligations and liabilities under the facility rank ahead of or otherwise at least pari passu in all respects with all other present and future unsecured and unsubordinated obligations and liabilities to other creditors, and not undertaking or permitting any reorganization, amalgamation, reconstruction, takeover, change of shareholders or any other schemes of compromise or arrangement affecting Delixy’s present constitution or amending or altering any provisions in Delixy’s constitution relating to Delixy’s borrowing powers and principal business activities.

Both banks charge interest based on a spread over its respective cost of funds, as well as commissions based on a percentage of the amount issued under the letters of credit. There may also be other fees such as facility fees, acceptance commission and outward remittance fees. The validity of letters of credit range from 30 days to three (3) months, while the other financing facilities such as trust receipt financing and freight financing have tenors ranging from 7 to 30 days. As of December 31, 2023 and June 30, 2024, and as of the date of this prospectus, the amount outstanding with respect to these credit facilities is zero.

Cash flows

The following table summarizes our cash flows for the six months period ended June 30, 2023 and 2024:

Cash flows from operating activities

For the six months period ended June 30, 2023, our net cash provided by operating activities was approximately US$1,826,000, primarily reflecting net income of approximately US$313,000, as adjusted by the following:

(a)     positive changes of approximately US$33,000 in non-cash items primarily including depreciation of property and equipment and amortization of right-of-use assets;

(b)    an increase of approximately US$1,000 in interest expense; and

(c)     positive changes of approximately US$1,479,000 in working capital primarily reflecting (i) an increase of approximately US$535,000 in receivables; (ii) an increase of approximately US$47,000 in deposits, prepayments and other receivables; (iii) an increase of approximately US$994,000 in payables; and (iv) a decrease of approximately US$118,000 in accrued liabilities; (v) an increase of approximately US$43,000 in income tax payable; and (vi) a decrease of approximately US$22,000 in lease liabilities.

For the six months period ended June 30, 2024, our net cash used in operating activities was approximately US$1,399,000, primarily reflecting net income of approximately US$450,000, as adjusted by the following:

(a)     negative changes of approximately US$150,000 in non-cash items primarily including gain on disposal of property, depreciation of property and equipment and amortization of right-of-use assets;

(b)    an increase of approximately US$89,000 in interest expense; and

(c)     negative changes of approximately US$1,788,000 in working capital primarily reflecting (i) a decrease of approximately US$3,059,000 in receivables; (ii) an increase of approximately US$1,000 in deposits, prepayments and other receivables; (iii) an increase of approximately US$2,521,000 in payables; (iv) an increase of approximately US$12,000 in accrued liabilities; (v) a decrease of approximately US$89,000 in income tax payable; (vi) a decrease of approximately US$1,152,000 in other non-current assets; and (vii) a decrease of approximately US$22,000 in lease liabilities.

Cash flows from investing activities

For the six months period ended June 30, 2023, our net cash used in investing activities was approximately US$1,005,000, primarily consisting of negative changes in derivative financial instruments.

For the six months period ended June 30, 2024, our net cash provided by investing activities was approximately US$1,252,000, primarily consisting of proceeds from disposal of property.

Cash flows from financing activities

For the six months period ended June 30, 2023, our net cash used in financing activities was approximately US$1,175,000 consisting dividend paid of approximately US$1,000,000 and a decrease of approximately US$175,000 in amount due to related party.

For the six months period ended June 30, 2024, our net cash used in financing activities was approximately US$2,489,000 primarily consists of dividend paid of approximately US$2,500,000 and an increase of approximately US$11,000 in amount due to shareholder.

The following table summarizes our cash flows for the financial years ended December 31, 2022 and 2023:

Cash flows from operating activities

For the year ended December 31, 2022, our net cash used in operating activities was approximately US$4,901,000, primarily reflecting net income of approximately US$253,000, as adjusted by the following:

(a)     positive changes of approximately US$69,000 in non-cash items primarily including depreciation of property and equipment and amortization of right-of-use assets; and

(b)    an increase of approximately US$12,000 in interest expense; and

(c)     positive changes of approximately US$36,000 in fair value loss on derivative financial instruments; and

(d)    negative changes of approximately US$5,271,000 in working capital primarily reflecting (i) an increase of approximately US$27,120,000 in receivables; (ii) a decrease of approximately US$50,000 in deposits, prepayments and other receivables; (iii) a decrease of approximately US$32,328,000 in accrued liabilities; (iv) a decrease in approximately US$49,000 in lease liabilities; (v) an increase of approximately US$46,000 in income tax payable; and (vi) a decrease in interest paid of approximately US$10,000.

For the year ended December 31, 2023, our net cash provided by operating activities was approximately US$4,050,000, primarily reflecting net income of approximately US$1,152,000, as adjusted by the following:

(a)     positive changes of approximately US$67,000 in non-cash items primarily including depreciation of property and equipment and amortization of right-of-use assets; and

(b)    an increase of approximately US$23,000 in interest expense; and

(c)     negative changes of approximately US$21,000 in fair value gain on derivative financial instruments; and

(d)    positive changes of approximately US$2,829,000 in working capital primarily reflecting (i) an increase of approximately US$2,716,000 in receivables; (ii) an increase of approximately US$24,000 in deposits, prepayments and other receivables; (iii) a decrease of approximately US$44,000 in accrued liabilities; (iv) a decrease of approximately US$47,000 in lease liabilities; (v) an increase of approximately US$200,000 in income tax payable; and (vi) a decrease in interest paid of approximately US$20,000.

Cash flows from investing activities

For the year ended December 31, 2022, our net cash provided by investing activities was positive by approximately US$2,695,000, primarily consisting of positive changes in derivative financial instruments.

For the year ended December 31, 2023, our net cash used in investing activities was approximately US$188,000, primarily consisting of negative changes in derivative financial instruments and negative changes in amounts due from our shareholder.

Cash flows from financing activities

For the year ended December 31, 2022, our net cash used in financing activities was approximately US$458,000 consisting repayment of bank borrowings of approximately US$458,000.

For the year ended December 31, 2023, our net cash used in financing activities was approximately US$1,675,000 primarily consists of dividend paid of approximately US$1,500,000, and a decrease of approximately US$175,000 in amount due to related party.

Capital Expenditures

There were no capital expenditures incurred in the financial years ended December 31, 2022 and 2023. There were no capital expenditures incurred in the six months period ended June 30, 2023 and 2024.

We plan to fund our future capital expenditures with our existing cash balance and proceeds from this offering. We will continue to make capital expenditures to meet the expected growth of our business.

Working Capital

We have sufficient working capital for our requirements for at least the next 12 months from the date of this prospectus, in the absence of unforeseen circumstances, considering the financial resources presently available to us, including cash and cash equivalents on hand, cash flows from our operations and the estimated net proceeds from this offering.

Accounts receivable, net

Our accounts receivable, net, approximately US$713,000 and US$3,772,000 as of December 31, 2023 and June 30, 2024 respectively. This increase in net accounts receivable was due to the longer repayment time from customer to the company. We did not charge any interest on, or hold any collaterals as security over these accounts receivable balances. We generally offer credit periods of up to 90 days to our customers. We have not had, and do not expect to have, issues collecting payment from these longer aging invoices.

The following table sets forth the ageing analysis of our accounts receivable, net, based on the invoiced date as of the dates mentioned below:

We determine, on a continuing basis, the probable losses and an allowance for doubtful accounts, based on several factors including internal risk ratings, customer credit quality, payment history, historical bad debt/write-off experience and forecasted economic and market conditions. Accounts receivable is written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. In addition, receivable balances are monitored on an ongoing basis and its exposure to bad debts is not significant.

Our accounts receivable, net, approximately US$3,429,000 and US$713,000 as of December 31, 2022 and 2023 respectively. This decrease in net accounts receivable was due to the shorter repayment time from customer to the company. We did not charge any interest on, or hold any collaterals as security over these accounts receivable balances. We generally offer credit periods of up to 90 days to our customers. We have not had, and do not expect to have, issues collecting payment from these longer aging invoices.

The following table sets forth the ageing analysis of our accounts receivable, net, based on the invoiced date as of the dates mentioned below:

We determine, on a continuing basis, the probable losses and an allowance for doubtful accounts, based on several factors including internal risk ratings, customer credit quality, payment history, historical bad debt/write-off experience and forecasted economic and market conditions. Accounts receivable is written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. In addition, receivable balances are monitored on an ongoing basis and its exposure to bad debts is not significant.

Amount due from shareholder

The amount due from shareholder, Mega Origin, is US$1,411,000 and nil as of December 31, 2022 and 2023 respectively. The amount due from shareholder, Mega Origin, was fully offset by interim dividend declared and paid.

Amount due to shareholder

Amount due to shareholder, Mega Origin, is nil and US$99,000 as of December 31, 2023 and June 30, 2024 respectively. The amount represents interest payable of loan from shareholder and payments made by the shareholder on behalf of the Company during the financial years. The amounts are non-trade in nature, unsecured, interest-free and not repayable on demand. Interest expenses are charged on new loan from shareholder with simple annual interests charged at 3.5% per annum.

Loan from shareholder

For long-term loan, the loan quantum is US$5,000,000 with simple annual interests charged at 3.5% per annum. The loan is for a period of two years and not repayable upon demand, save upon the request by Delixy Energy, whichever earlier.

Accrued liabilities

Our accrued liabilities were approximately US$75,000 as of December 31, 2023 and US$87,000 as of June 30, 2024 and is primarily made up of accrued expenses.

Our accrued liabilities were approximately US$119,000 as of December 31, 2022 and US$75,000 as of December 31, 2023 and is primarily made up of accrued expenses.

Contractual Obligations

We had the following contractual obligations as of December 31, 2022:

We had the following contractual obligations as of December 31, 2023:

We had the following contractual obligations as of June 30, 2024:

Capital commitments

As of December 31, 2022 and 2023 and June 30, 2024, we did not have any capital commitments.

Off-Balance Sheet Transactions

As of December 31, 2022 and 2023 and June 30, 2024, we had not entered into any material off-balance sheet transactions or arrangements.

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Taxation

Cayman Islands Tax Considerations

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our Company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

British Virgin Islands

We are an exempted company incorporated in the British Virgin Islands. The British Virgin Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of estate duty or inheritance tax. There are no other taxes likely to be material to us levied by the government of the British Virgin Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the British Virgin Islands. The British Virgin Islands is not party to

any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the British Virgin Islands. In addition, the British Virgin Islands does not impose withholding tax on dividend payments.

Singapore

Delixy Energy Pte. Ltd. is operating in Singapore and are subject to the Singapore tax law at the corporate tax rate at 17.0% on the assessable income arising in Singapore during its tax year. See “Material Tax Considerations”.

Critical Accounting Policies, Judgments and Estimates

Summary of significant accounting policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe that the critical accounting policies as disclosed in this prospectus reflect the more significant judgments and estimates used in preparation of our consolidated financial statements. Further, we elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements.

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:

(a) Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All inter-company transactions, if any, and balances due to, due from, long-term investment subsidiary, and registered paid in capital have been eliminated upon consolidation.

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the financial years presented.

Significant accounting estimates reflected in our consolidated financial statements in the period include the allowance for doubtful accounts on accounts and other receivables, assumptions used in assessing right-of-use assets and impairment of long-lived assets, and deferred tax valuation allowance. Actual results could vary from the estimates and assumptions that were used. Actual results could differ from these estimates.

Given the uncertainty regarding the length, severity, and ability to combat the COVID-19 pandemic, we cannot reasonably estimate the impact on our future results of operations, cash flows, or financial condition. As of the date of this prospectus, we are not aware of any specific event or circumstance that would require us to update our estimates, our judgments, or the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to our consolidated financial statements.

and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue from goods sold and services provided

Revenue from sales of goods and services in the ordinary course of business is recognized when the Company satisfies a performance obligation (“PO”) by transferring control of a promised good or service to the customer. The amount of revenue recognized is the amount of the transaction price allocated to the satisfied PO.

The transaction price is allocated to each PO in the contract on the basis of the relative stand-alone selling prices of the promised goods or services. The individual stand-alone selling price of a good or service that has not previously been sold on a stand-alone basis, or has a highly variable selling price, is determined based on the residual portion of the transaction price after allocating the transaction price to goods and/or services with an observable stand-alone selling price. A discount or variable consideration is allocated to one or more, but not all, of the performance obligations if it relates specifically to those performance obligations.

Transaction price is the amount of consideration in the contract to which the Company expects to be entitled in exchange for transferring the promised goods or services. The transaction price may be fixed or variable and is adjusted for time value of money if the contract includes a significant financing component. Consideration payable to a customer is deducted from the transaction price if the Company does not receive a separate identifiable benefit from the customer. When consideration is variable, if applicable, the estimated amount is included in the transaction price to the extent that it is highly probable that a significant reversal of the cumulative revenue will not occur when the uncertainty associated with the variable consideration is resolved.

Revenue may be recognized at a point in time following the timing of satisfaction of the PO. Typically, POs for products and services where the process is as described below, the PO is satisfied at a point in time. For the sale of oil products, the Company typically receives purchase orders from its customers which will set forth the terms and conditions, including the transaction price, products to be delivered, terms of delivery, and terms of payment. The terms serve as the basis of the performance obligations that the Company must fulfil in order to recognize revenue. The key performance obligation is the delivery of the finished product to the customer at their location, at which point title to that asset passes to the customer. The completion of this earning process is evidenced by transport documents such as bill of lading or delivery order.

Trading of derivatives embedded in sales contracts or at the requested from the suppliers for oil products are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value as at each reporting date. The resulting gain or loss is recognized under statements of income.

(f) Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, Income Taxes, or ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the financial years ended December 31, 2022 and 2023, we did not have any interest and penalties associated with tax positions. As of December 31, 2022 and 2023, we did not have any significant unrecognized uncertain tax positions. For the six months period ended June 30, 2023 and 2024, we did not have any interest and penalties associated with tax positions. As of December 31, 2023 and June 30, 2024, we did not have any significant unrecognized uncertain tax positions.

We are subject to tax in local and foreign jurisdiction. As a result of our business activities, we file tax returns that are subject to examination by the relevant tax authorities.

(g) Leases

Effective from January 1, 2020, we adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. On February 25, 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right-of-use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. It requires for leases longer than one year, a lessee to recognize in the statement of financial condition a right-of-use asset, representing the right to use the underlying asset for the lease term, and a lease liability, representing the liability to make lease payments. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the FASB including ASC Topic 840, Leases.

The accounting update also requires that for finance leases, a lessee recognize interest expense on the lease liability, separately from the amortization of the right-of-use asset in the statements of earnings, while for operating leases, such amounts should be recognized as a combined expense. In addition, this accounting update requires expanded disclosures about the nature and terms of lease agreements.

(h) Related parties

We follow the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

(i) Fair value measurement

We follow the guidance of the ASC Topic 820-10, Fair Value Measurement and Disclosure, or ASC 820-10, with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

The carrying value of our financial instruments: cash and cash equivalents, accounts receivable, deposits and other receivables, amount due from shareholder, accounts payable and accrued liabilities, dividend payable, lease liabilities and hedging contracts approximate at their fair values because of the short-term nature of these financial instruments.

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of note payable approximate the carrying amount. We account for loans receivable at cost, subject to impairment testing. We obtain a third-party valuation based upon loan level data including note rate, type and term of the underlying loans.

Our non-marketable equity securities are investments in privately held companies, which are without readily determinable market values and are classified as Level 3, due to the absence of quoted market prices, the inherent lack of liquidity and the fact that inputs used to measure fair value are unobservable and require management’s judgment.

Financial instruments are fair value financial assets that are marked to fair value and are accounted for as under Level 3 under the above hierarchy except for derivative instruments that are marked to fair value and are accounted for as under Level 2.

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07. The amendments improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The ASU applies to all public entities that are required to report segment information in accordance with ASC 280. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash flows.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires specific disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in the consolidated financial statements, once adopted. The Company is in the process of evaluating the impact of the new guidance and does not expect it to have a significant impact on its consolidated financial statements.

Other accounting standards that have been issued by the FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

Except as mentioned above, we do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

Impact of Inflation

In accordance with the Monetary Authority of Singapore, the year-over-year percentage changes in the consumer price index for 2023 and 2022 were 4.2% and 4.1%, respectively. As of the date of this prospectus, inflation in Singapore has not materially affected our profitability and operating results. While recent inflationary pressures have led to such increase in costs and impacted our operations, we have been able to mitigate this impact due to our strong market position and pricing power, which has allowed us to pass these costs on to our customers through back-to-back agreements. As a result, our profitability and operating results have not been impacted by recent inflationary pressures. However, we can provide no assurance that we will not be affected by such inflationary pressures in Singapore or globally in the future. In the event that the inflationary pressures continue to increase to any material extent, and we continue to pass along the increased costs to our customers, it may result in loss of sales and loss of customers, thereby adversely impacting our margins and results of operations.

Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

The Company’s interest-rate risk arises from lease liabilities. The Company manages interest rate risk by varying the issuance and maturity dates of variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of December 31, 2022 and 2023 and June 30, 2024, the lease liabilities were at fixed interest rates.

Credit Risk

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research and analysis of the relevant economy and the underlying obligors and transaction structures. We identify credit risk collectively based on industry, geography and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the “probability of default” by the customer on its contractual obligations and consider the current financial position of the customer and the current and likely future exposures to the customer.

Liquidity Risk

We are also exposed to liquidity risk, which is a risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.

Foreign Exchange Risk

Our reporting currency is the United States dollars, and almost all of our consolidated revenues and consolidated costs and expenses are in United States dollars.

Internal Control Over Financial Reporting

We currently lack personnel adequately trained in and have appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and related disclosures to fulfil U.S. GAAP and SEC financial reporting requirements. As such, we have implemented and plan to implement a number of measures to address this issue including: (i) engaging an external consulting firm to assist us with our financial reporting in US GAAP; (ii) allocating additional resources to improve financial oversight function; (iii) introducing formal business performance review process, and preparing and reviewing the consolidated financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting requirements; and (iv) providing our relevant finance staff with appropriate training in connection with the requirements of U.S. GAAP.

HISTORY AND CORPORATE STRUCTURE

Corporate Structure

Our Company was incorporated in the Cayman Islands on May 16, 2024, under the Companies Act as an exempted company with limited liability. On incorporation, our authorized share capital was US$500,000 divided into 500,000,000 Ordinary Shares, par value of US$0.001 each. Following incorporation, our entire issued share capital was held solely by Mr. Xie. Per the reorganization executed on August 21, 2024, Mr. Xie was issued an additional 99,999 shares, and on the same date, he transferred 18.62%, 4.90%, 4.90%, 4.90% and 3.34% of his shares to Novel Majestic, Cosmic Magnet, Dragon Circle, Rosywood Holdings and Golden Legend respectively. On November 6, 2024, Mega Origin transferred its entire equity interest in Delixy to us in consideration of our allotment and issue to it of one share credited as fully paid. On [•], 2024, Mr. Xie will transfer his [63.34]% interest in our Company to his wholly-owned company, Mega Origin, for cash at par.

On [•], 2024, for purposes of recapitalization in anticipation of the initial public offering, the Company effected a 1:200 sub-division of its shares (a “forward stock split”) and, following the forward stock split, the cancellation of 99,500,000,000 shares in its authorized but unissued share capital, resulting in its authorized share capital becoming $2,500 divided into 500,000,000 shares of a par value of $0.000005 each. Concurrently, Mega Origin surrendered 3,167,200 ordinary shares par value US$0.000005 each, Novel Majestic surrendered 931,000 ordinary shares par value US$0.000005 each, Cosmic Magnet surrendered 245,000 ordinary shares par value US$0.000005 each, Dragon Circle surrendered 245,000 ordinary shares par value US$0.000005 each, Rosywood Holdings surrendered 245,000 ordinary shares par value US$0.000005 each and Golden Legend surrendered 167,000 ordinary shares par value US$0.000005 each to the Company, respectively or 25.0% of their shareholdings each. None of these shareholders surrendering their ordinary shares received any consideration for surrender of their ordinary shares, nor are there any agreements or arrangements in place under which any of these shareholders will surrender their respective ordinary shares. Unless otherwise indicated, all references to Ordinary Shares, share data, per share data, and related information have been retroactively adjusted, where applicable, in this prospectus to reflect the 1:200 forward stock split of our Ordinary Shares and the shares surrendered by our existing shareholders on October 2, 2024 as if they had occurred at the beginning of the earlier period presented.

Historically, our Group was comprised of Delixy Energy. Prior to the effective date of the registration statement of which this prospectus forms a part, we completed a reorganization whereby the entire share capital of Delixy Energy was transferred to Delixy International, resulting in our holding of the entire issued share capital of Delixy indirectly.

Organization Chart

The chart below sets out our corporate structure as at the date of this prospectus after an internal group reorganization has been completed with percentages held pre and post offering.

____________

Notes:

(1)      Mega Origin, a company incorporated in the BVI and is wholly-owned by Mr. Xie.

(2)      Novel Majestic, a company incorporated in the BVI and is wholly-owned by Tran Tieu Cam, and holds 18.62% of the Company’s issued share capital before the offering.

(3)      Cosmic Magnet, a company incorporated in the BVI and is wholly-owned by Tan Siok Sing, an Independent Third Party.

(4)      Dragon Circle, a company incorporated in the BVI and is wholly-owned by Hong Shieh Jang, Marcus, an Independent Third Party.

(5)      Rosywood Holdings, a company incorporated in the BVI and is wholly-owned by Wu Ke’Er Holly Elenna, an Independent Third Party.

(6)      Golden Legend, a company incorporated in the BVI and is wholly-owned by Chor Chung Heong, an Independent Third Party.

Entities

A description of our principal operating subsidiary is set out below.

Delixy Energy Pte. Ltd.

Delixy Energy Pte. Ltd was incorporated in Singapore on September 10, 2007 and is our indirect wholly-owned subsidiary with an issued share capital of 1,000,000 shares of S$1.00 each which is held as to 100.0% by Delixy International Limited following the internal group reorganization on November 6, 2024. Delixy Energy carries on the business of trading in crude oil and oil-based products.

INDUSTRY OVERVIEW

All the information and data presented in this section have been derived from Frost & Sullivan Limited (“Frost & Sullivan”)’s industry report commissioned by us entitled “Crude Oil and Petroleum Products Trading Market Study in Singapore” (the “Frost & Sullivan Report”) unless otherwise noted. Frost & Sullivan has advised us that the statistical and graphical information contained herein is drawn from its database and other sources. The following discussion contains projections for future growth, which may not occur at the rates that are projected or at all.

OVERVIEW OF CRUDE OIL AND PETROLEUM PRODUCTS TRADING IN SINGAPORE

Definition and Classification

Crude oil, also known as petroleum, is a naturally occurring global commodity composed of hydrocarbon deposits and other organic materials. Crude oil is further refined in the midstream to produce usable products including gasoline, diesel, and various other forms of petrochemicals for various downstream usage.

Crude oil is mostly exploited through oil drilling. An oil well is a boring in the Earth that is designed to bring crude oil hydrocarbons to the surface. Wells can be located either on land and offshore, while offshore wells can be further categorized into (i) wells with subsea wellheads where the top of the well is sitting on the ocean floor under water; and (ii) Wells with dry wellheads, where the top of the well is above the water on a platform or jacket.

Value Chain

Source: The Frost & Sullivan Report

The crude oil value chain is a complete network of interconnected suppliers of labor, commodities, and information reaching into different communities and industries. It is highly capital-intensive and includes firms in industrial equipment and machinery, construction and well services, information technology, logistics, materials, and the professional, financial and other services sectors. The crude oil value chain can be divided into upstream, midstream, and downstream segments.

The upstream sector of the crude oil value chain is also known as the Exploration and Production (E&P) sector. The main content of the upstream sector includes the search for potential underground or subsea oil fields and the drilling of exploration wells, which recover and bring crude oil to the ground surface.

The midstream industry involves crude oil trading, distribution, storage, sale and transportation of crude oil, and main transportation includes pipelines, tankers, trucks, ships, and railways.

The downstream sector involves the refining, processing, distributing, and marketing of crude oil. It includes the sale and distribution of processed crude oil, as well as products derived from crude oil, such as liquefied petroleum gas, gasoline, jet fuel, diesel, other fuel oils, asphalt and petroleum coke. The major parties here include refineries, petroleum product distribution and retail stores.

Market Size in APAC region

Crude oil demand in the Asia-Pacific region is reflective of its dynamic economic landscape, characterized by a diverse range of economies from emerging markets to developed nations. The region‘s demand for crude oil stood at 35,807.6 thousand barrels per day in 2019, a testament to its robust industrial base, burgeoning transportation needs, and the growing consumption of petroleum products across various sectors. Despite global challenges, the demand maintained an upward trajectory, reaching 37,209.5 thousand barrels per day by 2023, representing a CAGR of approximately 1.0% during 2019 to 2023. Such persistent growth is largely attributed to the region’s expanding economies, increased urbanization, and higher energy requirements. Looking ahead, the APAC region’s crude oil demand is projected to continue its growth momentum. With economic development, advancements in infrastructure, and the rising energy consumption associated with improved living standards, the demand is forecasted to grow at a CAGR of 2.7% from 2024 to 2028. This is expected to result in a demand of 42,345.7 thousand barrels per day by the end of 2028, signaling the region’s escalating energy needs and its significant role in the global oil market.

Source: OPEC, The Frost & Sullivan Report

Crude oil exports from the APAC region have shown a downward trend between 2019 and 2023. Starting at 939.9 thousand barrels per day in 2019, decreased to 649.5 thousand barrels per day by 2023, representing a CAGR of approximately -8.8%, largely attributable to the shrink in overall production.

On the import side, APAC demonstrates a vigorous demand for crude oil. In 2019, the region imported 24,832.1 thousand barrels per day. This import volume grew to 25,265.1 thousand barrels per day by 2023, and it is projected to rise significantly to 28,751.4 thousand barrels per day by 2028. The increasing trajectory of crude oil imports is a result of the region’s growing energy needs driven by economic development, industrialization, and an expanding transportation sector.

Source: OPEC, The Frost & Sullivan Report

China’s demand for crude oil is driven by its rapidly growing economy, expanding middle class, and increasing urbanization. As the world’s largest importer of crude oil, China’s oil consumption is a significant factor in global oil markets. The country’s oil demand is primarily driven by the transportation, industrial, and petrochemical sectors. China’s crude oil demand increased from 13,808 thousand barrels per day in 2018 to 15,935 thousand barrels per day in 2023, representing a CAGR of approximately 3.6%. In China, the transportation sector is the primary driver of oil demand, as the country has seen a rapid increase in the number of vehicles on its roads. The industrial sector, including manufacturing and construction, also contributes significantly to China’s oil consumption. Additionally, the petrochemical industry, which produces various chemicals and plastics, relies heavily on crude oil as a feedstock. With China’s economy expected to continue its robust growth in the near future, the crude oil demand in China is projected to grow at a CAGR of 5.4% from 2024 to 2028, reaching 21,023.1 thousand barrels per day in 2028.

Market Size in China

Source: OPEC, The Frost & Sullivan Report

The crude oil export in China increased from 16.1 thousand barrels per day in 2018 to 28.7 thousand barrels per day in 2023, at a CAGR of 15.5%. Despite being the world’s largest importer of crude oil, China has been increasing its crude oil exports in recent years, primarily due to the expansion of its refining capacity and the government’s efforts to optimize its domestic oil industry. China’s growing refining sector allows the country to process more crude oil and export refined petroleum products to other countries in the Asia region and beyond. As China continues to expand its refining capabilities and seeks to maintain a balance between domestic supply and demand, the country’s crude oil exports are expected to remain stable in the near future. The crude oil export in China is projected to increase and reach 34.2 thousand barrels per day from in 2028, reflecting the country’s strategic approach to managing its oil resources and its role in the global oil market.

Source: OPEC, The Frost & Sullivan Report

In 2023, the imports of crude oil in China amounted to 11,300.0 thousand barrels per day. The amount of crude oil imported to China increased over the period between 2018 to 2023, with the country maintaining its position as the world’s largest crude oil importer. China’s growing demand for oil, driven by its expanding economy, increasing urbanization, and rising middle class, has been the primary factor behind the sustained growth in its crude oil imports.

With the expected continuation of China’s economic growth and the increasing demand for oil in the transportation, industrial, and petrochemical sectors, the import of crude oil in China is projected to grow at a CAGR of 7.0% from 2024 to 2028, reaching 16,218.6 thousand barrels per day by 2028.

Source: OPEC, The Frost & Sullivan Report

The petroleum products exported by China include fuel oil, gas/diesel oil, gasoline, jet fuel kerosene, naphtha, and other petroleum products. In 2023, China exported 1,343.0 thousand barrels per day of petroleum products, which is influenced by the energy needs of neighboring countries, as well as the global market dynamics and the competitiveness of Chinese refineries.

As China continues to expand its refining capacity and optimize its domestic oil industry, the country is expected to play an increasingly important role in supplying petroleum products to the Asia-Pacific region. The growing energy demand in emerging economies and the ongoing industrialization in the region are expected to drive the demand for China’s petroleum product exports. The export of petroleum products from China is projected to reach 1,503.7 thousand barrels per day in 2028, growing at a CAGR of 1.5% from 2024 to 2028.

Source: OPEC, The Frost & Sullivan Report

China’s petroleum product imports increased from 1,389.4 thousand barrels per day in 2018 to 2,685.4 thousand barrels per day in 2023, representing a CAGR of approximately 17.9%. Despite extensive refining capabilities, China relies on imports to meet its growing demand for high-quality fuels and petrochemical feedstocks. Driven by economic growth and increasing demand, China’s petroleum product imports are projected to reach 4,395.6 thousand barrels per day by 2028, growing at a CAGR of 8.8% from 2024 to 2028.

Source: OPEC, The Frost & Sullivan Report

Market Size in Singapore

Singapore’s demand for crude oil is driven by its extensive refining industry, which processes crude oil into various petroleum products like gasoline, diesel, jet fuel, and petrochemicals. As Singapore serves as a major trading and storage hub for the Asia region, and its oil industry is highly integrated with the global market, the demand for crude oil in Singapore is influenced not only by domestic consumption but also by regional demand. The crude oil demand in Singapore decreased from 1,409.6 thousand barrels per day in 2019 to 1,452.1 thousand barrels per day in 2023.

In Singapore, domestic demand for oil is primarily driven by transportation and industrial sectors. As a highly urbanized and industrialized country, Singapore relies heavily on oil for fueling vehicles, power generation, and industrial processes. With the sustained economic growth in the near future, the crude oil demand in Singapore is expected to grow at a CAGR of 2.6% from 2024 to 2028, reaching 1,647.7 thousand barrels per day in 2028.

Source: Energy Market Authority of Singapore, The Frost & Sullivan Report

The crude oil export in Singapore increased from 965.9 ktoe in 2019 to 1,030.0 ktoe in 2023, at a CAGR of 1.6%. The Singapore crude oil market is expected to remain a vital hub for trading and refining crude oil due to its strategic location and advanced refining facilities position it as a key player in the global crude oil market. As energy demands continue to rise, especially in the Asia region, Singapore role in crude oil trading and refining is likely to grow, supporting the market`s stability and development. The crude oil export in Singapore is expected to attain the CAGR of 3.4% from 2024 to 2028, reaching 1,220.9 ktoe in 2028.

Source: Energy Market Authority of Singapore, The Frost & Sullivan Report

In 2023, the imports of crude oil in Singapore amounted to 50,500.0 ktoe. The amount of crude oil imported to Singapore decreased over the period between 2019 to 2023 and reached its peak in 2019. With the recovery of domestic demand for oil and the sustained growth in trading of oil, the import crude oil in Singapore is expected to grow at a CAGR of 3.4% from 2024 to 2028.

Source: Energy Market Authority of Singapore, The Frost & Sullivan Report

Well-established Connectivity and Logistics Networks:    Singapore is one of the world’s most connected countries, strategically located along the world’s major trade, shipping and aviation routes. The trading companies leverage Singapore’s robust connectivity and logistics networks to gain access to diverse markets across Asia and beyond. Singapore is situated at the southern tip of the Malay Peninsula, strategically positioned at the crossroads of major shipping routes and air corridors in the Asia. It serves as a gateway between East and West, connecting markets in Asia, Europe, the Middle East, and the Americas. Singapore’s strategic location enables traders to engage in cross-border trading and seize market opportunities in neighboring countries. Singapore’s well-established infrastructure and trade relationships facilitate efficient import and export activities, making it an attractive hub for regional and international trade.

Market Risk Analysis

Impact of Oil Price Fluctuation:    The investment in oil refinery and production is positively correlated to oil prices. If the oil price decreases, there is increase in distressed asset sales across the industry, debt restructuring, and layoffs, as well as consolidation through mergers and acquisitions. Amid low oil prices, investment in oil industry would drop accordingly as investors are more concerned about profit margins. The oil price fluctuation may affect the investment in oil industry, which has long — term impact on oil production and refinery capacity. In addition, oil price fluctuations directly impact the profitability of oil trading. Traders buy and sell oil at different prices, aiming to profit from the price differential. When oil prices rise, traders who have bought oil at lower prices can sell it at a higher price, generating profits. Conversely, when oil prices decline, traders may face losses if they have bought oil at higher prices.

Crude Oil Price Analysis

Since 1 January 2020, the international market oil price has been experiencing a plummet after OPEC’s failure to strike a deal with its allies on the output cut in March 2020 and Saudi Arabia’s reaction intensified the situation by way of cutting oil prices and boosting production. The global outbreak of the COVID-19 pandemic also restrained the demand of crude oil, which further intensified oil supply and demand imbalance. In April 2020, crude oil price plummeted to below US$20 per barrel. The crude oil price started to rebound since May 2020 due to the rebalancing of oil supply and demand along with world’s top oil producers such as Saudi Arabia, UAE and Kuwait ended their voluntary extra oil production.

Crude oil price is greatly influenced by some geopolitics factors such as the diplomatic behaviors of major OPEC countries in the world. In early October 2022, with a view to spurring a recovery in crude prices, the OPEC+ have announced the reduction of crude oil production by 2 million barrels per day from November. Subsequently in April 2023, with a view to supporting market stability, the OPEC+ announced further oil output cuts of approximately 1.66 million barrels per day, starting from May 2023, which is likely to contribute to lifting crude oil price in the short run. In June 2023, OPEC+ stated the output cuts announced earlier to be extended till the end of 2024, making the aggregated production volume target of the members of OPEC+ adjusted to 40.46 million barrels per day for 2024. The immediate impact of the OPEC+ cut is likely to be higher oil prices, at least in the short term. Considering the sustained impact of the shortfall of crude oil supply from Russia attributable to the crisis in Ukraine and the subsequent international sanctions on Russia as well as the Red Sea crisis, according to the Short-Term Energy Outlook published in March 2024 administered by the U.S. Energy Information Administration (“EIA”), Brent crude

oil price is anticipated to average US$87.0 per barrel in 2024. The EIA also forecasted that when OPEC+ supply cuts are set to expire. In 2025, it is expected to put slight downward pressure on the Brent price in 2025, reaching US$84.8 per barrel in 2025.

Source: EIA, The Frost & Sullivan Report

COMPETITION OVERVIEW

Singapore has established itself as one of the top three global oil trading and global refining hubs. The country has a strategic location at the crossroads of the Indian and Pacific Oceans, sound financial system, excellent infrastructure, transparent legal system and a skilled workforce. Singapore has a total crude oil refining capacity of 1.5 million barrels per day (bbl/d). Its three main refineries are ExxonMobil’s 605,000-bbl/d refinery at Pulau Ayer Chawan, Royal Dutch/Shell’s 500,000-bbl/d refinery on Pulau Bukom and the Singapore Refining Company’s 290,000-bbl/d refinery on Pulau Merlimau. In addition, Singapore is the market leader for high-end floating production, storage and offloading conversions and jack-up rigs, as well as the regional headquarter for most of the key players in the industry. The oil and petroleum product trading industry in Singapore is relatively fragmented with more than 100 market participants in 2023. The leading trading companies have built extensive networks, established relationships with suppliers and buyers, and have a proven track record in the industry. They possess deep industry expertise, advanced trading capabilities, and comprehensive risk management strategies, giving them a competitive edge.

The Group is the fifth largest Singapore-based crude oil and petroleum products trading company in 2023, with a revenue of USD289.4 million.

Source: The Frost & Sullivan Report

Entry Barriers

Hefty Capital Investment:    Trading in crude oil and petroleum products typically requires significant upfront capital investment for various purposes, including but not limited to coverage of initial margins, trading positions, and potential price fluctuations. The size of the trading capital will depend on the scale and scope of the trading activities intended. As the high oil price volatility leads to significant financial risks, traders must have the financial capacity to absorb potential losses resulting from price fluctuations. Adequate capital reserves and risk management strategies are essential to mitigate these risks. Demonstrating financial stability and having access to adequate funding sources can be crucial for entry into the market.

Access to Infrastructure and Logistics:    Access to storage facilities, transportation networks, and dependable supply chains is crucial for trading companies. However, securing storage space can be difficult due to limited availability, particularly for large-scale operations. Existing storage operators may have long-term contracts or restricted capacity for new entrants. Obtaining storage space often necessitates substantial upfront investments or entering into long-term agreements. Furthermore, establishing the necessary infrastructure for oil trading, such as storage terminals, pipelines, and loading/unloading facilities, can be costly. Building or leasing these facilities, as well as their ongoing maintenance and operation, can present barriers for new entrants with limited financial resources.

Industry Connections:    In the oil and petroleum products trading industry in Singapore, the existing trading companies have established solid relationship with oil suppliers, buyers, banks, and other intermediaries. The government as well as midstream and downstream players prefer an already solidly established and working relationship with current traders in order to eliminate uncertainty in collaboration with new players. As such, it poses challenges for new players to probe into the existing eco-system of the industry.

Factors of Competition

Industry Expertise and Service Offering:    Deep knowledge and expertise are essential for success in the oil trading industry. Established players, with their years of experience, possess a comprehensive understanding of market dynamics, encompassing factors such as supply and demand, price volatility, geopolitical influences, and regulatory landscapes. This expertise enables them to make informed trading decisions, identify lucrative opportunities, and effectively manage risks. Competing traders also prioritize comprehensive market analysis and research capabilities. They diligently track global oil markets, geopolitical events, economic indicators, and other factors that influence oil prices. Well-established players often have dedicated research teams and access to advanced analytical tools, providing them with a competitive edge.

Reputation and Brand Awareness:    Established trading companies have a proven track record in distributing crude oil and petroleum products, which has earned them a strong market reputation and brand awareness. Their reputation is built on fair and reliable trading practices, fulfilling contractual obligations, and providing high-quality services. This reputation instills trust and confidence in counterparties, suppliers, and buyers, making them attractive partners. As a result, existing market participants with a positive brand reputation and an established client portfolio have a competitive advantage in attracting and retaining clients. New entrants may face challenges in acquiring business from prospective clients, requiring additional effort and time to establish trust and credibility. Consequently, existing market players have a competitive edge in expanding their business network and exploring new clients.

Economies of Scale:    Benefitting from the large scale of business and operation, established and sizable trading companies can enjoy higher bargaining power to negotiate with suppliers and cost synergies to provide comprehensive and value-added services to customers from different industries. Therefore, economies of scale can be a major setback for the new entrants with limited scale of operation, product and service offerings.

BUSINESS

OVERVIEW

We are a holding company incorporated in the Cayman Islands with operations conducted by our Singapore subsidiary which is incorporated in Singapore.

As a holding company incorporated in the Cayman Islands with no material operations, we conduct our operations in Singapore through our operating subsidiary, Delixy Energy Pte. Ltd.. We are principally engaged in the trading of oil related products, which can be broadly categorized into (i) crude oil and (ii) oil-based products such as naphtha, motor gasoline, gas oil, fuel oil, asphalt, base oil and other petrochemicals.

We trade our products across multiple countries in Southeast Asia and East Asia, and we have established a presence in the oil trading markets in these countries. For the financial years ended December 31, 2022 and 2023, our total trading volume increased by 17.9% from 2,765 kBBLs (where 1 kBBL is equal to 1,000 barrels of oil) to 3,261 kBBLs, respectively. For the financial years ended December 31, 2022 and 2023, our total trading revenue decreased by 9.6% from US$319,804,000 to US$289,166,000, respectively. For the six months period ended June 30, 2023 and 2024, our total trading volume increased by 8.5% from 1,514 kBBLs (where 1 kBBL is equal to 1,000 barrels of oil) to 1,643 kBBLs, respectively. For the six months period ended June 30, 2023 and 2024, our total trading revenue increased by 23.7% from US$116,247,000 to US$143,761,000, respectively.

Crude oil trading represents a core aspect of our business as it accounts for a significant portion of our revenue. For the financial years ended December 31, 2022 and 2023, trading in crude oil represented 73.5% and 87.2% of our total trading revenue, respectively. The trading in various oil-based products make up the rest of our total trading revenue and for the financial years ended December 31, 2022 and 2023, these make up 26.5% and 12.8% of our total trading revenue, respectively. For the six months period ended June 30, 2023 and 2024, trading in crude oil represented 97.4% and 50.1% of our total trading revenue, respectively. The trading in various oil-based products make up the rest of our total trading revenue and for the six months period ended June 30, 2023 and 2024, these make up 2.6% and 49.9% of our total trading revenue, respectively.

We typically enter into back-to-back agreements with our suppliers after our customer has agreed on the terms of the purchase so as to reduce our exposure and trading risks. We may also enter into swap agreements or trade in oil and oil-based products derivatives to further hedge our positions.

We leverage on our strong existing relationships with our customers and suppliers as well as our deep experience and understanding of the oil industry to provide certain value-added services to our customers. This includes recommending to our customers optimal trading strategies tailored to their specific needs, and providing shipping and logistical support where required. In addition, our financing capabilities allow us to extend credit terms to our customers while satisfying the immediate payment terms required by our suppliers.

OUR COMPETITIVE STRENGTHS

We believe our main competitive strengths are as follows:

We have the financial capability to provide our customers with financing alternatives and credit terms

Most suppliers of crude oil and oil-based products require payment on delivery with minimal credit terms and this lack of flexibility may limit buyers who may require more accommodating payment arrangements. On the other hand, we are able to provide our customers with credit terms of up to 90 days by leveraging our strong balance sheet position as well as short term loan facilities available to the Group. Our ability to extend these advantageous credit terms to our customers allows us to cater to the diverse needs of our customers across multiple countries and to provide them with the financial flexibility they may require for their business operations. This in turn allows us to develop and maintain long-lasting relationships with our customers based on trust, and to provide differentiated offerings centered on flexible financing and/or delivery options. Our principal funding sources include short term loan facilities drawn down and secured by the underlying physical commodity and trade. From time to time, in recognition of our strong financial position, certain financial institutions have been willing to extend short term credit facilities to us. As of December 31, 2023, and as of the date of this prospectus, the amount outstanding with respect to these credit facilities is zero. This approach not only minimizes risks but also grants us access to competitively priced funding,

thereby allowing us to deliver flexible financing solutions to our customers whilst maintaining financial prudence. For more information regarding the material terms of our short term credit facilities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

We have a diversified portfolio of oil products

We trade in a diversified portfolio of oil products, including crude oil, naphtha, motor gasoline, gas oil, fuel oil, asphalt and base oil. Crude oil serves as the basis for a variety of petroleum products such as propane, asphalt, petrochemical feedstocks and more. With a portfolio founded on crude oil and its derivatives, we are able to cater to our customers’ demands across various industries and geographic regions. This ensures that our revenue is not seasonal or dependent on any specific sector or industry. In addition, in line with our ongoing commitment to global sustainability, we are also actively exploring opportunities to expand our product offerings to include sustainable fuels, including sustainable fuel products related to hydrogen energy and stationary energy storage systems. This would further enhance the variety of our product offerings and ensure that our revenue streams remain resilient to changes in global trends.

We have an experienced management team with strong relationships across our value chain

Our management team headed by our Executive Chairman, Chief Executive Officer and Executive Director, Mr. Xie, has decades of experience in oil trading as well as in the oil industry generally, including oil refining and logistics.

While we are not dependent on any individual supplier or groups of suppliers of crude oil or oil-based products, we maintain strong relationships with these suppliers and are able to leverage on our relationships with them to gain market insights and ensure a reliable supply of crude oil and oil-based products to our customers. We are also able to tap on the strong relationships we have with storage facilities providers as well as fleet and logistics providers in the event that we are required to provide bulk breaking or transportation services to our clients. Our team of traders are experienced and well equipped to identify and leverage arbitrage windows to maximize our value-added services, as well as to ensure that we hedge any outstanding positions that we may have from time to time effectively, thereby reducing any potential losses in our activities.

We have robust and strong risk management and internal controls capabilities

We believe that the ability to manage risk is one of our key strengths. Risk management is a core function under the supervision of our senior leadership structure. Our sound risk management practices have contributed to our positive performance through the volatile market environment in recent years and have helped to mitigate earnings volatility. We have stringent hedging practices and generally only enter into swaps or trade in derivatives of the oil and oil-based products we sell to the extent required to hedge our positions. Further, to the extent commercially practicable, we also prefer to enter into back-to-back agreements where we will place a back-to-back purchase order with our suppliers only after our customer has confirmed the terms of its order. This is done to limit any potential exposure we may have in terms of price fluctuations.

Our risk management processes in relation to the onboarding of new customers and suppliers are managed closely by a risk management committee which comprises three (3) members, with each member having a veto right in respect of the onboarding of every new customer and assessment of every new supplier. After approval is obtained for onboarding of the customer, our operations team will then take over to service the customer, and our finance team will monitor the trades entered into and our positions on an ongoing basis. For trades where we obtain bank financing and where our purchase pricing terms differ from our selling pricing terms, we may operate tripartite accounts at brokerage houses with our banks, for which all our derivative trading positions require the approval of ourselves and our bankers. We believe that these measures have enabled us to weather through the differing operating climates in the last two (2) decades that we have been in operation.

We are strategically located in Singapore, Asia’s refined products trading hub

Products such as gas oil and fuel oil are primarily sourced from Europe and the Middle East and distributed to companies across Southeast Asia and East Asia. Singapore has an extensive tank farm capacity and is supported by strong bunkering demand in the region. Coupled with the ease of doing business in the country, availability of banking

facilities and an established and stable legal system, Singapore is both well-equipped and strategically positioned to be an oil trading hub. Our position in Singapore therefore allows us to take advantage of arbitrage opportunities arising from price differentials or variations in pricing formulas across regions and time zones.

OUR STRATEGIES

Expand our trading team

We believe that our success is derived from our deep understanding of the markets in which we trade in, our products and our customers. We draw on our knowledge and understanding of the local markets, the specific demands of our customers, as well as of the various types of oil-based products to shape our risk management strategies and provide to our customers various value-added services, including advising them on optimal trading strategies.

To further strengthen this competitive advantage of ours, we plan to expand our trading team by hiring market researchers and traders. In particular, we are aiming to expand the team of market researchers whose primary focus will be to conduct in-depth market research, including analyzing external reports, data trends and supply and demand projections. We also aim to expand the team of traders who will continuously monitor the markets to better identify arbitrage opportunities and ensure that our trades are effectively carried out.

Expand into the trading of other oil related products

We plan to leverage on our existing trading expertise and expand our product offering range beyond crude oil and oil-based products to include other oil related products, such as liquefied natural gas (“LNG”) and liquefied petroleum gas (“LPG”). To ensure that we have the necessary expertise to understand the specific market dynamics and risks in trading in such products, we have employed additional traders who have specific experience in LNG and LPG trading. We are also in the process of registering ourselves as a trader of LNG with the large oil majors in order to commence such business and establish a presence in the LNG industry. We will, from time to time, assess our trading portfolio of products, and expand into new products if we determine that we have the ability to undertake such activities and that such expansion will be beneficial to our business. This product diversification strategy positions us to adapt to shifts in demand driven by global trends.

Expand business and operations through development, strategic acquisitions and business cooperations

Whilst we intend to focus on our principal business activities in the trading of crude oil and oil-based products, we also plan to explore opportunities to diversify and expand our business and operations through internal development, as well as by collaborating with suitable partners through strategic acquisitions and business cooperations, including joint ventures and/or strategic alliances. For example, if a suitable opportunity arises, we may seek to acquire other oil trading businesses and oil trading related service providers that will complement our current business. We are currently not involved in any discussions for any potential acquisitions or business cooperations with any party. We may also seek to develop oil logistics services capabilities, such as oil freight and storage services, as well as other renewable energy related services to further diversify our business into regions beyond the PRC.

OUR BUSINESS

We conduct our operations in Singapore through our operating subsidiary, Delixy Energy Pte. Ltd. We are principally engaged in the trading of oil related products, which can be broadly categorized into (i) crude oil and (ii) oil-based products such as fuel oils, motor gasoline, additives, gas condensate, base oils, asphalt, petrochemicals and naphtha (heavy gasoline). We trade our products across countries in Southeast Asia and East Asia.

For the financial years ended December 31, 2022 and 2023, our total trading volume increased by 17.9% from 2,765 kBBLs (where 1 kBBL is equal to 1,000 barrels of oil) to 3,261 kBBLs, respectively. For the financial years ended December 31, 2022 and 2023, our total trading revenue decreased by 9.6% from US$319,804,000 to US$289,166,000, respectively. For the six months period ended June 30, 2023 and 2024, our total trading volume increased by 8.5% from 1,514 kBBLs (where 1 kBBL is equal to 1,000 barrels of oil) to 1,643 kBBLs, respectively. For the six months period ended June 30, 2023 and 2024, our total trading revenue increased by 23.7% from US$116,247,000 to US$143,761,000, respectively.

Crude Oil

Crude oil is a naturally occurring unrefined fossil fuel composed of hydrocarbons which are organic compounds consisting primarily of hydrogen and carbon. Once extracted from underground reservoirs through drilling wells, crude oil is transported to refineries where it undergoes various processes such as distillation and refining, forming the basis for a variety of petroleum products such as propane, asphalt, petrochemical feedstocks, among others. It is a primary raw material for many industries including transportation, manufacturing and agriculture.

Crude oil prices are volatile and can be affected by numerous factors beyond our control, including worldwide oil supply and demand. The price of crude oil may be affected by numerous factors such as: the level of economic activity in the markets we serve; regional political developments and military conflicts; economic sanctions; weather conditions and natural disasters; conservation and environmental protection efforts; the level of crude oil inventories; the ability of OPEC and other major oil-producing or oil-consuming nations to influence global production levels and prices; governmental regulations and actions, including the imposition of taxes and trade restrictions; market uncertainty; exchange rates; speculative activities by those who buy and sell oil and gas on the world markets, including commodity futures trading; availability and capacity of infrastructure, processing facilities and necessary transportation; supply chain disruptions; the price and availability of new technology; the availability and cost of alternative sources of energy; and the impact of climate change considerations and actions towards energy transition on the demand for the products in which we trade in. In terms of volatility, we note that throughout the period under review, being January 1, 2022 to December 31, 2023, brent crude traded between a high of US$134.72 per barrel to a low of US$70.96 per barrel, with an average price of US$91.89. This underscores the volatility in the prices of the principal raw materials which we trade in.

Crude oil trading represents a core aspect of our business as it accounts for a significant portion of our revenue. For the financial years ended December 31, 2022 and 2023, trading in crude oil represented 73.5% and 87.2% of our total trading revenue, respectively. For the six months period ended June 30, 2023 and 2024, trading in crude oil represented 97.4% and 50.1% of our total trading revenue, respectively. We typically procure our crude oil from suppliers globally including Europe, West Africa, Middle East, Singapore, Malaysia and Brazil to sell to our customers which are refineries and trading companies in the PRC, South Korea and Singapore.

Other Oil-Based Products

Other oil-based products that we trade in include fuel oils, motor gasoline, additives, gas condensate, base oils, asphalt, petrochemicals and naphtha (heavy gasoline). Crude oil is a raw material for these oil-based products, and the prices of these oil-based products are correlated to crude oil prices. Their prices are volatile and may be affected by factors similar to those affecting crude oil prices as described above. The trading in various oil-based products make up the rest of our total trading revenue and for the financial years ended December 31, 2022 and 2023, these make up 26.5% and 12.8% of our total trading revenue, respectively. The trading in various oil-based products make up the rest of our total trading revenue and for the six months period ended June 30, 2023 and 2024, these make up 2.6% and 49.9% of our total trading revenue, respectively.

We generally procure our oil-based products from suppliers in the PRC, Singapore, Malaysia and Europe to sell to our customers comprising mainly other traders and wholesalers in Southeast Asia and East Asia. We also leverage on our relationships with oil blenders who have capabilities to blend oil-based products and other feedstocks or additives into other oil-based products to purchase our oil-based products. Many of our customers have storage tanks in Malaysia and Singapore to take delivery for sale into the rest of the Association of Southeast Asian Nations (“ASEAN”) countries in the region.

Our customers and suppliers

We source crude oil from oil producers and oil majors, storage facilities as well as other oil traders globally including Europe, West Africa, Middle East, Singapore, Malaysia and Brazil. We generally procure oil-based products from oil refineries, as well as other wholesalers and distributers in the PRC, Singapore, Malaysia and Europe. We purchase on an order-by-order basis and we typically do not enter into any long-term supply agreements with our suppliers. We also do not enter into any offtake agreements. We believe that this allows us to respond to market fluctuations (whether as to price, demand or otherwise) more effectively. While we have good relationships with our suppliers and make recurrent purchases from many of our suppliers, we are not dependent on any major supplier.

Our traders have longstanding and good relationships with our customers and suppliers, as well as a comprehensive and experienced understanding of the oil industry. Our network of trusted suppliers and partners ensure that we are able to offer and deliver our products on time and in compliance with our customers’ specifications. We select our suppliers from

our approved list of suppliers based on their prices, quality, past performance and timeliness of delivery, and we have a risk management committee that is responsible for assessing every new supplier we deal with. In the last three (3) financial years, we have not experienced any material difficulty in sourcing suppliers or shortage of supplies based on our customers’ needs.

Our customers for crude oil are mainly refineries and trading companies in Southeast Asia and East Asia. Our customers for oil-based products are mainly other traders and wholesalers as well as storage facilities owners who undertake product blending in Singapore and Malaysia. Our traders maintain regular contact with our customers to understand their needs and to provide relevant information to support their needs and operations. We believe that our customers purchase crude oil and oil-based products from us instead of directly sourcing from our suppliers for various reasons, including our ability to provide our customers with credit terms of up to 90 days, our longstanding business relationships with our customers, as well as our ability to cater to their irregular and unplanned demands. Our team’s extensive industry knowledge and in-depth understanding of our customers’ needs also allows us provide guidance to our customers on the time and frequency of them placing orders and the price to place such orders at. Such value-added services allow us to develop and deepen the longstanding business relationships we have with our customers.

While we maintain a close and longstanding relationship with our customers and suppliers and are reliant on a small number of key customers and suppliers, we do not enter into any long-term or standing contractual agreements with our customers and suppliers. This allows us to maintain our flexibility, respond quickly to market fluctuations and take advantage of arbitrage windows more effectively. Our sale and purchase agreements with our customers and suppliers respectively are governed by standard terms, with the material terms relating to the quantity and quality of the product, delivery, price, payment and inspection requirements.

Our business process

Prior to onboarding any new customer or supplier, our risk management committee comprising three (3) members, each having a veto right, will undertake the necessary KYC checks or background checks before approving such onboarding. Every new customer or supplier must be approved by a unanimous vote of all members of our risk management committee. We will also assess the credit worthiness of the customer to determine the initial credit terms granted, which will be assessed on an ongoing basis. Please refer to the section entitled “Our pricing and credit policy” for more details.

Subsequently, the operations team (largely comprising the traders) will then take over to manage the client relationship and the trading activities, while our finance team monitors our trades and positions on an ongoing basis. We also assess our customers continually to review their business scope, operation status and records, as well as monitor their transaction volumes to reduce any risk of them engaging in any illegal or sanctioned activities. In addition, we are also able to leverage on our good relationships with our customers and suppliers to gather market information (including any investigation into any of our customers and suppliers), which may be indicative of risk factors in relation to anti-money laundering or illegal activities.

After a customer has been onboarded, our traders typically receive enquiries from customers by phone or email. Customers will typically specify the product, quantity, and delivery details in the purchase request, which we will then check with our suppliers on availability and delivery timeline. To the extent commercially practicable, we enter into back-to-back agreements to reduce our exposure and trading risks. Once we have obtained the price for the relevant product and confirmed the availability for delivery, we will then confirm their orders in writing. After our customer has agreed on the terms of the order, we will place the back-to-back purchase order with our suppliers in writing. Where required by our customers, we may also work with our third-party suppliers to provide freight and delivery of the commodity. However, such demand for freight and delivery services from us has reduced in recent years as it has become more common for suppliers to arrange for delivery to the destination as part of their services. Through our network of suppliers coupled with our strong financial position, we are also able to liaise with other third party service providers to deploy a number of other shipping and logistics strategies including making bulk, breaking bulk and storage for future use.

While our purchases are generally driven by customer orders as we endeavor to enter into back-to-back agreements, we continue to keep regular contact with our suppliers who provide us with updated quotations for the products we trade in. Once we receive the relevant price from our suppliers, we will consider if the purchase price offered by our suppliers is reasonable and if necessary, we will negotiate with our suppliers for a more favorable price with reference to price indices such as ICE Brent crude price, the expected purchase quantity, payment terms and length of credit period offered by our suppliers. We also keep up to date with the prevailing trends in the market. Our traders are able to analyze market trends to predict and take advantage of arbitrage windows such as purchasing assets in a market where there is oversupply for sale in a market where there is increased demand, as well as predicting periods of higher demand and purchasing the relevant products ahead of time when prices are more depressed. As delivery of the products we trade in is usually

approximately two (2) months after the order, we are also able to take advantage of such timing differences and arbitrage opportunities therein. As such, where opportunities arise, or where our traders are of the view that there may be arbitrage opportunities, we may purchase crude oil and oil-based products in large quantities without back-to-back customer orders, and undertake activities such as bulk breaking which involves reselling these products in smaller quantities to our customers. This strategy enhances our flexibility when dealing with our customers as we are able to respond to our customers’ immediate or unplanned purchase demands for the products within a short time frame and accommodate their delivery schedule in a more flexible manner. In turn, we may be able to increase our trading revenue.

With a strong network and an in-depth understanding of each of our existing customers, we also regularly reach out to them to understand their current and expected demand for the products in which we trade in. Where any potential opportunities are identified, our traders will also reach out to our customers to determine if they may require our services, for instance, where prices are expected to increase considerably or when demand for the products is expected to rise, to advise our customers to consider placing orders for future deliveries at a current fixed price. We are also able to provide consulting services to some of our customers by leveraging our experience and understanding of the oil industry, through which we will recommend to them optimal trading strategies tailored to their specific needs in relation to quantity, timing and price.

After entering into purchase and sales contracts, our finance team regularly monitors our trading exposure and positions, and will undertake steps to mitigate any accompanying risks. We have stringent hedging practices and will generally enter only into swap agreements, or trade in derivatives of the oil and oil-based products we sell on derivative exchanges, to the extent required to hedge our positions. Our finance team comprises derivative traders who have the requisite experience to conduct such trading to effectively hedge our positions.

Our pricing and credit policy

Depending on their individual needs and taking into consideration market trends, our customers may enter into either fixed price contracts or contracts where the price of the product is dependent on a formula, typically pegged to the prevailing market price at time of delivery. Occasionally, we may have “oil price trigger” and “oil price roll-over” clauses in our contracts with our customers, where we grant our customers the option to convert the formula price into a fixed price within a stipulated period, depending on the prevailing market price at the time of conversion. In such event, we will, to the extent possible, secure the same clause from our suppliers, or undertake hedging activities to hedge against any risk posed by such clauses.

We also provide our customers with advice on choosing between such pricing models, based on our experience and understanding of the market and our ability to anticipate potential price movements. Where possible, we will enter into back-to-back agreements with our customers and suppliers, and the price we charge our customers is based on a cost-plus approach by adding a mark-up to our cost of purchase. In calculating the mark-up, we will consider factors such as our cost of purchase, quantity of product, delivery timelines, credit terms and our business relationship with the customer. Other factors that we take into consideration include where we have purchased the relevant products ahead of time with the intention of taking advantage of arbitrage windows and opportunities.

Our financing capabilities allow for the execution of trades across different time zones and periods, and importantly, they also allow us to extend credit terms to our customers while satisfying the immediate payment terms required by our suppliers. While we typically settle full payment of our purchase orders with our suppliers immediately upon confirmation of the order, we generally grant our customers credit terms of up to 90 days, depending on our credit assessment of the customer and our relationship with such customer.

Customer acceptance procedures in relation to credit worthiness are performed on all of our customers at the time of onboarding. This includes, but is not limited to, (i) setting up of credit assessment and control policy and procedures; and (ii) where the customer is an existing customer, checking our internal records for the payment history of the customer. Following the onboarding of our customers, we will also conduct continuous regular assessments on all our customers. Material overdue payments are monitored continuously and evaluated on a case-by-case basis. In such event, we will take the appropriate follow-up actions, having regard to the customer’s normal payment processing procedures, our relationship with the customer, its financial position as well as the general economic environment. This includes, but is not limited to, actively liaising with the customer, and, if necessary, taking legal action against the customer to recover payments due. We will review the recoverable amount of each individual receivable balance at the end of each reporting period to ensure adequate impairment losses are provided for the irrecoverable amounts.

Sales and marketing

We believe that our reputation, our proven track record in the industry, our well-established relationships with our existing customers, along with our years of experience in the trading of oil and oil-based products enable us to leverage our existing customer base for further expansion. As such, we do not rely heavily on marketing and promotional activities. All our traders are responsible for liaising and maintaining our relationship with our customers and suppliers, and keeping abreast of market developments and potential business opportunities. They are also well equipped to identify any arbitrage windows to maximize our revenue. We focus on maintaining the quality of our services, enriching our experience and expertise in the industry, upholding our professional reputation, and maintaining our relationships within the industry, instead of relying on significant advertising and promotion. We currently have a team of 5 traders responsible for sales and marketing, led by our CEO and overseen by our risk management committee.

Quality Management

We believe that quality control is important to our business, and we have quality control measures in place to ensure that our products consistently meet the standards that our customers demand of us. Where our goods are delivered by cargo, during the unloading or discharging process, we will typically require one of our employees to monitor the unloading operations and, together with an independent surveyor, take spot samples to ensure stable product quality of our products sold. We monitor customer feedback and ensure that any new supplier whom we deal with has been approved by our risk management committee. Please also refer to the section above on “Our customer and suppliers” for more information.

Information Technology

We consider information technology development aimed at improving systems, processes and security to be of importance, and we invest in information technology systems and process improvements from time to time. We also subscribe to online publications to ensure that our traders are kept up to date with industry news and trends, as well as to obtain current information from independent reports. We are mindful of the need to progressively replace legacy applications with better-integrated systems in the areas of commodity trading and risk management. Our aim is to implement systems which allow for better monitoring of processes and increased efficiency. We currently run a number of programs, including accounts-related software as well as trading-related software, namely the WebICE system and Oilchem networks.

Environment, Health and Safety

As our operations solely involves trading, we are not exposed to significant environment, health and safety risks.

Brands and Intellectual Property

We are not materially dependent on any brand or intellectual property. Save as set out below, as at the date of this prospectus, we have not registered for any intellectual property in any country. We have registered the following marks in Singapore:

Note:

The goods and/or services under Class 36 comprises trading in futures; providing information relating to the trading of commodity futures; options trading; trading in contracts on stocks; trading in bonds; trading of options; trading of securities; trading in shares; agencies for trading of securities; agencies for commodity futures trading; commodities trading [financial]; brokerage of commodities; financial analysis and consultancy; commodities financing; commodities insurance; commodities, gold, mercantile, monetary and security exchanges; commodities investment consultancy; insurance services relating to sea freight; valuation of freight and cargo.

The goods and/or services under Class 39 comprises oil distribution services; air freight shipping services; air freight transportation; arranging for the transport of air freight; freight [shipping of goods]; freight and transport brokerage services; freight brokerage and providing information relating thereto; freight ship transport; freight shipping; freight transportation by sea; freight transportation by land; freight warehousing services; freight transportation services; goods warehousing; loading, packing, storage, transport and unloading of freight; services for freight forwarding; storage; storage and delivery of goods; storage consultancy services; storage services for freight; supply chain logistics and reverse logistics services consisting of the storage, transportation and delivery of freight; supply chain logistics and reverse logistics services consisting of the storage, transportation and delivery of freight for others; tracking of freight vehicles by computer or via global positioning systems; warehousing of freight; advisory services relating to the storage of goods; arrangement of the storage of goods; oil storage services; rental of containers for warehousing and storage; storage of petro-chemicals; transmission of oil or gas through pipelines; transport of crude oil; transport of oil.

As of the date of this prospectus, we have registered our domain name, “delixy.com”.

Employees

We employed 11 people as of the date of this prospectus, 11 people as of December 31, 2023, 9 people as of December 31, 2022 and 8 people as of December 31, 2021, all of whom are based out of Singapore. As of December 31, 2023, while most of our employees undertake multiple roles in our Group’s operations, based on their core functions, our employees generally comprise three management personnel, five trading personnel, four logistics personnel and two administrative personnel.

We have developed various methods to ensure that employees are adequately and correctly trained for the functions they perform and are aware of the relevant legislations affecting our business. Our success depends on our ability to attract, retain, and motivate qualified employees. We believe that we maintain a good working relationship with our employees, and we have not experienced any material labor disputes or work stoppages. No collective bargaining agreement has been put in place.

We enter into standard labor contracts which contain standard confidentiality clauses with our employees.

Seasonality

We may experience an increase in demand for crude oil and oil-based products during the winter seasons. This is caused by a general increase in demand for heating during the winter seasons. We are able to leverage on our experience to monitor such trends and identify arbitrage windows to take advantage of such increase in demand.

Real Property

Our headquarters are located in Singapore. We are an asset light business and we do not own any real property. We are renting the office space that we currently use for our headquarters and day-to-day operations.

A description of the leased office space in Singapore is as follows:

Licenses, Permits and Registrations

To the best of our knowledge, no environmental licenses are required for us to operate our business in Singapore.

Insurance

We have limited liability insurance coverage for our business operations, including cargo insurance for our trades where we purchase our goods from our suppliers on “free on board” terms and sell them to our customers on “cost, insurance and freight” terms where we covers costs, insurance and freight for of our account customer’s order while the cargo is in transit. We believe that our insurance coverage is consistent with industry standards and is adequate to cover our key assets, facilities and liabilities. Please see “Risk Factors — Our current insurance coverage may not sufficiently protect us against all the risks we are exposed to and this may adversely affect our business, results of operations and financial condition”.

Legal Proceedings

We may from time to time be subject to various legal or administrative claims and proceedings arising from the ordinary course of business, including contractual disputes and other commercial disputes. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention. We may also need to pay damages to settle claims with a substantial amount of cash. Please see “Risk Factors — Our susceptibility to litigation, arbitration and other proceedings could have an adverse effect on our business”.

As at the date of this prospectus and for the financial years ended December 31, 2022 and 2023, we have not been engaged in any legal proceedings.

REGULATORY ENVIRONMENT

Delixy is incorporated and carries on its business in Singapore, we are subject to all relevant laws and regulations of Singapore and may be affected by new laws, regulations and policies which are introduced by the Singapore government from time to time. We have identified the main laws and regulations (apart from those pertaining to general business requirements) that we anticipate are relevant to our operations, the relevant regulatory bodies and the licenses, permits and approvals typically required for the conduct of our business in Singapore. There are no material effects of the regulations discussed under this section on our business.

The following description is a summary of material laws and regulations applicable to our operations in Singapore. The laws and regulations set out below are not exhaustive and are only intended to provide general information to investors and are neither designed nor intended to be a substitute for professional advice. Prospective investors should consult their own advisers regarding the implication of the relevant laws and regulations on us.

Regulation on Commodity Trading

The Commodity Trading Act 1992 of Singapore (“CTA”) regulates certain types of commodity trading activities, including commodity brokers and spot commodity trading. Section 2 of the CTA provides a wide definition of “commodity”. In general, commodities include any produce, item, goods or article (i.e. oil, gas and chemicals) that is the subject of any commodity forward contract, leveraged commodity trading, contract made pursuant to trading in differences, or spot commodity trading. The CTA is regulated by the Monetary Authority of Singapore.

Spot Commodity Trading License

Under Section 13A, all persons involved in spot commodity trading require a license, this includes a “spot commodity broker”, a “spot commodity broker’s representative”, a “spot commodity pool operator” and “spot commodity pool operator’s representative”.

However, a person may be exempted from spot commodity licensing if any exemptions under the CTA Schedule apply. The exemptions are as set out below:

(i)     Under section 14A(1) read with paragraph 1(f) of the Schedule of the CTA, if a person carries on spot commodity trading on the person’s own account and there is no solicitation of any funds from the public in connection with the purchase or sale or the commodities, a spot commodity trading license is not required.

(ii)    Under section 14A(1) read with paragraph 1(g) of the Schedule of the CTA, if a person who solicits or accepts orders for the purchase or sale of any commodity is not a party to the commodity contract, does not carry the customer’s position, margin or account in the person’s own books, does not accept money or assets from the customer as settlement of any commodity contract, a spot commodity trading license is not required.

Under Section 13A(3)(a), the penalty for a person acting as or holding himself out as a “spot commodity broker” or “spot commodity pool operator” without the necessary license is a fine not exceeding S$100,000 or imprisonment for a term not exceeding 3 years or both. Under Section 13A(3)(b), the penalty for a person acting as or holding himself out as a “spot commodity broker’s representative” or “spot commodity pool operator’s representative” without the necessary license is a fine not exceeding S$50,000 or imprisonment for a term not exceeding 12 months or both.

Part 7 of the CTA prohibits false trading, bucketing, dissemination of information about false trading, manipulation of price and cornering, employment of fraudulent or deceptive devices and fraudulently inducing trading. The prohibitions are elaborated upon below:

(i)     False trading — Section 43 prohibits the creation or potential creation of a false or misleading appearance of active trading in a commodity market or the price of trading in commodity contracts.

(ii)    Bucketing — Section 44 prohibits any person from knowingly executing, or holding the person out as having executed, an order for the purchase or sale of a commodity contract on a commodity market without having effected a bona fide purchase or sale of the commodity contract in accordance with the business rules and practices of the commodity market.

(iii)   Dissemination of information about false trading — Section 45 prohibits the circulation, dissemination or authorisation of any statement or information to the effect that the price of trading in any class of commodity contracts will, or is likely to, rise or fall because of the market operations of one or more persons which, to the first mentioned person’s knowledge, are conducted in contravention of Section 43.

(iv)   Manipulation of price and cornering — Section 43 prohibits any person from directly or indirectly manipulating, or attempting to manipulate, the price of a commodity contract that may be dealt in on a commodity market, or cornering, or attempting to corner, any commodity which is the subject of any commodity contract.

(v)    Employment of fraudulent or deceptive devices — Section 47 prohibits any person from directly or indirectly, whether in connection with any transaction with any other person involving trading in a commodity contract, employing any device, scheme or artifice to defraud that other person, engaging in any act, practice or course of business that operates a fraud or deception to that other person, or make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made not misleading.

(vi)   Fraudulently inducing trading — Section 48 prohibits any person from directly or indirectly, for the purposes of inducing or attempting to induce another person to trade in a commodity contract, making or publishing any statement which is false, misleading or deceptive with respect to any material fact and which the person knows, or has reasonable grounds for believing is false, misleading or deceptive or any statement which is, by reason of the omission of a material fact, rendered false, misleading or deceptive and which the person knows, or has reasonable grounds for believing, is rendered false, misleading or deceptive by reason of the omission of that fact.

We must comply with Part 7 of the CTA and we ensure that all our employees are aware of such restrictions on an ongoing basis. Our management team also monitors the trades that we carry out. Pursuant to section 49 of the CTA, a person who contravenes any of the provisions of Part 7 of the CTA shall be guilty of an offence and shall be liable on conviction, in the case of an individual, to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 7 years or to both, and in the case of a body corporate, to a fine not exceeding $500,000.

The Company is exempted from the requirement to hold a spot commodity license in pursuant to Sections 14A(1) of the CTA since it carries out the trading for their own account and does not solicit any funds from any member of the public.

Securities and Futures Act 2001

The Securities and Futures Act 2001 (“SFA”) governs the regulation of activities and institutions in the securities and derivatives industry. The SFA and its regulations are regulated by the Monetary Authority of Singapore.

Under the Section 2 of the SFA, a “commodity” is defined as:

(a)     any produce, item, goods or article;

(b)    any index, right or interest in any produce, item, goods or article; or

(c)     any index, right, interest, tangible property or intangible property of any nature that is, or belongs to a class of indices, rights, interests, tangible properties or intangible properties that is, prescribed for the purposes of this definition,

but does not include —

(d)    any produce, item, goods or article that is, or that belongs to a class of produce, items, goods or articles that is, prescribed not to be a commodity for the purposes of this definition; or

(e)     any index, right or interest in any produce, item, goods or article that is, or that belongs to a class of indices, rights or interests that is, prescribed not to be a commodity for the purposes of this definition.

Under Section 2 of the SFA, a “futures contract” is an exchange-traded derivatives contract under which:

(a)     one party agrees to transfer title to an underlying thing, or a specified quantity of an underlying thing, to another party at a specified future time and at a specified price payable at that future time; or

(i)     the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of an underlying thing agreed at the time of the making of the contract and at a specified future time; or

(ii)    the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of an underlying thing agreed at the time of the making of the contract and at a specified future time.; or

(b)    an exchange-traded derivatives contract which is an option on an exchange-traded derivatives contract mentioned in paragraph (a).

Under Section 2 of the SFA, a “derivative contract” means:

(a)     any contract or arrangement under which —

(i)     a party to the contract or arrangement is required to, or may be required to, discharge all or any of its obligations under the contract or arrangement at some future time; and

(ii)    the value of the contract or arrangement is determined (whether directly or indirectly, or whether wholly or in part) by reference to, is derived from, or varies by reference to, either of the following:

(A)    the value or amount of one or more underlying things;

(B)    fluctuations in the values or amounts of one or more underlying things; or

(b)    any contract or arrangement that is, or that belongs to a class of contracts or arrangements that is, prescribed to be a derivatives contract,

but does not include —

(c)     securities;

(d)    any unit in a collective investment scheme;

(e)     a spot contract.

Part 12 of the SFA governs acts occurring both within and outside Singapore, in relation to derivatives contracts, traded in Singapore. The jurisdiction conferred by SFA also extends to acts occurring within Singapore, in relation to derivatives contracts traded outside Singapore. Accordingly, we have to comply with Part 12 of the SFA. We ensure that all our employees are aware of such restrictions on an ongoing basis. Our management team also monitors the trades that we carry out.

Similar to Part 7 of the CTA, Part 12 of the SFA prohibits false trading, bucketing, dissemination of information about false trading, manipulation of price and cornering, employment of fraudulent or deceptive devices and fraudulently inducing trading. The prohibitions are elaborated upon below:

(a)    False trading — Section 197 prohibits the creation or potential creation of a false or misleading appearance of active trading in any capital market products on an organised market or the price of any capital market products on an organised market.

(b)    Manipulation of price — Section 198 prohibits any person from being concerned in or carrying out, directly or indirectly, two (2) or more transactions in securities-based derivatives contracts that have or are likely to have the effect of raising, lowering, maintaining or stabilising the price of securities-based derivatives contracts of the corporation on an organised market, with the intention to induce other persons to subscribe for, purchase or sell securities-based derivatives contracts of the corporation of a related corporation.