Founder Group (NASDAQ: FGL) posts 2025 loss, adds US$16M convertible note
Rhea-AI Filing Summary
Founder Group Limited files its 2025 Form 20-F, highlighting a project-based solar EPCC business in Malaysia focused on large-scale and commercial & industrial rooftop projects. Revenue was RM120,697,610 (approximately US$29,721,156) in 2025, up 33.6% from 2024 after a prior-year decline.
The company remained loss-making, with a 2025 net loss of RM7,275,141 (approximately US$1,791,465) following a 2024 net loss of RM5,150,005. Results are heavily driven by large-scale solar work, which contributed 61% of 2025 revenue, and a concentrated customer base where three clients provided 57% of 2025 revenue.
Founder Group discloses regulatory and operational risks in Malaysia, including a historical breach of contract-reporting rules that may trigger fines, dependence on subcontractors and key suppliers, and the need to maintain licenses. Capital structure risks include a dual class share system concentrating voting power, Nasdaq listing vulnerabilities, dilutive private placements, and a US$16,070,000 secured convertible note issued in December 2025.
Positive
- None.
Negative
- Persistent losses despite revenue rebound: 2025 revenue rose to RM120.7 million, but the company posted a net loss of RM7.3 million after a 2024 loss, signaling ongoing profitability challenges.
- Financing and dilution overhang: A US$10 million pre-paid share facility (US$5.5 million drawn) and a US$16.07 million secured convertible note at a discounted conversion price introduce potential future dilution and balance-sheet risk.
- Concentrated control and listing risk: A dual class structure concentrates voting power among a few holders, and the company highlights prior Nasdaq compliance issues and the need for a 100-for-1 share combination to support continued listing.
Insights
Founder Group shows renewed revenue growth but ongoing losses, financing overhang, and governance concentration.
Founder Group Limited (FGL) reports 2025 revenue of RM120.7 million (about US$29.7 million), rebounding 33.6% after a sharp 2024 drop. However, the business remains unprofitable, with a 2025 net loss of RM7.3 million following a 2024 loss, underscoring execution and margin pressures in its project-based solar EPCC model.
Risk disclosures emphasize dependence on large-scale projects and a narrow customer and supplier base, including a single mounting-systems provider and subcontractors that account for over half of cost of sales. A past breach of Malaysian construction reporting rules could still lead to fines up to RM1.55 million, while multiple licenses and approvals are critical to operations and expansion plans.
On the capital side, FGL has used structured financing: an April 2025 facility with AVONDALE that has already yielded US$5.5 million of pre-paid share purchases and a December 2025 secured convertible note of US$16.07 million at a discount-linked conversion price. A 100-for-1 share combination and dual class structure, with Class B holders controlling most voting power, together create governance concentration and potential equity overhang for existing shareholders.
Key Figures
Key Terms
EPCC services financial
Construction Industry Development Board Malaysia Act 1994 regulatory
defect liability period technical
dual class structure financial
Nasdaq Capital Market financial
passive foreign investment company financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
OR
For the fiscal year ended
OR
OR
Date of event requiring this shell company report
For the transition period from to
Commission file number:
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
Telephone:
Email:
At the address of the Company set forth above
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
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| Large-accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Emerging growth company |
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No
TABLE OF CONTENTS
| INTRODUCTION | iii | |
| PART I | 1 | |
| ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 1 |
| ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE | 1 |
| ITEM 3. | KEY INFORMATION | 1 |
| ITEM 4. | INFORMATION ON THE COMPANY | 18 |
| ITEM 4A. | UNRESOLVED STAFF COMMENTS | 43 |
| ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 44 |
| ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 64 |
| ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 72 |
| ITEM 8. | FINANCIAL INFORMATION | 74 |
| ITEM 9. | THE OFFER AND LISTING | 75 |
| ITEM 10. | ADDITIONAL INFORMATION | 76 |
| ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 95 |
| ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 97 |
| PART II | 98 | |
| ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | 98 |
| ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 98 |
| ITEM 15. | CONTROLS AND PROCEDURES | 98 |
i
| ITEM 16. | [RESERVED] | 99 |
| ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT | 99 |
| ITEM 16B. | CODE OF ETHICS | 99 |
| ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 99 |
| ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | 100 |
| ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 100 |
| ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT | 100 |
| ITEM 16G. | CORPORATE GOVERNANCE | 100 |
| ITEM 16H. | MINE SAFETY DISCLOSURE | 100 |
| ITEM 16I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 100 |
| ITEM 16J. | INSIDER TRADING POLICIES | 100 |
| ITEM 16K. | CYBER SECURITY | 100 |
| PART III | 101 | |
| ITEM 17. | FINANCIAL STATEMENTS | 101 |
| ITEM 18. | FINANCIAL STATEMENTS | 101 |
| ITEM 19. | EXHIBITS | 101 |
ii
INTRODUCTION
In this annual report on Form 20-F, unless the context otherwise requires, references to:
| ● | “BVI” are to the British Virgin Islands; |
| ● | “BVI Act” are to the BVI Business Companies Act, 2020, Revised Edition (as amended); |
| ● | “C&I” are to Commercial and Industrial; |
| ● | “Class A Ordinary Shares” are to Class A ordinary shares of Founder Group, no par value; |
| ● | “Class B Ordinary Shares” are to Class B ordinary shares of Founder Group, no par value; |
| ● | “EPCC” are to engineering, procurement, construction and commissioning; |
| ● | “Founder Assets” are to Founder Assets Sdn. Bhd., a private company limited by shares incorporated and registered under the laws of Malaysia, which is a wholly owned subsidiary of Founder Energy (Malaysia) (defined below) with registration number 202201035065 (1480762-M); |
| ● | “Founder Assets (Thailand)” are to Founder Assets (Thailand) Company Limited, a private company limited by shares incorporated and registered under the laws of Thailand, which is a 99.99%-owned subsidiary of Founder Group (defined below) with registration number 0105568010250; |
| ● | “Founder Energy (Malaysia)” are to Founder Energy Sdn. Bhd., a private company limited by shares incorporated and registered under the laws of Malaysia, which is a wholly owned subsidiary of Founder Group (defined below) with registration number 202101013707 (1414006-X); |
| ● | “Founder Energy (Singapore)” are to Founder Energy (Singapore) Pte. Ltd., a private company limited by shares incorporated under the laws of Singapore, which is a wholly owned subsidiary of Founder Energy (Malaysia); |
| ● | “Founder Group” are to Founder Group Limited, a BVI business company limited by shares incorporated and registered under the laws of the BVI with company number 2124362; |
| ● | “Founder Solar Solution” are to Founder Solar Solution Sdn. Bhd., a private company limited by shares incorporated and registered under the laws of Malaysia, which is a wholly owned subsidiary of Founder Energy (Malaysia) with registration number 202501005545 (1606959-T); |
| ● | “Insolvency Act” are to the BVI Insolvency Act, 2020 (Revised Edition); |
| ● | “M&A” are to the Memorandum and Articles of Association of Founder Group (as amended and/or amended and restated (as applicable) from time to time); |
| ● | “MYR” or “RM” are to the Malaysian ringgit, the legal currency of Malaysia; |
| ● | “MWac” are to megawatt of alternating current, a unit of electrical power measurement that represents the capacity of a power generation facility to produce electricity at a given moment; |
| ● | “Nasdaq” are to the Nasdaq Stock Market LLC; |
| ● | “Ordinary Shares” are to the Class A Ordinary Shares and Class B Ordinary Shares; |
| ● | “PV” are to photovoltaic; |
| ● | “SEC” are to the U.S. Securities and Exchange Commission; |
| ● | “U.S. dollars”, “$”, “USD” and “dollars” are to the legal currency of the United States; and |
| ● | “we,” “us,” “our,” “our Company,” or the “Company” are to Founder Group and its subsidiaries on a consolidated basis. |
This annual report on Form 20-F includes our audited consolidated financial statements for the fiscal years ended December 31, 2025, 2024, and 2023. In this annual report, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in U.S. dollars. Certain dollar references are based on the exchange rate of Malaysian Ringgit (MYR) to U.S. dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets, including accounts receivable (expressed in dollars).
This annual report contains translations of certain Malaysian Ringgit (MYR) into U.S. dollars at specified rates. Unless otherwise stated, the following exchange rates are used in this annual report:
| December 31, | ||||||
| US$ Exchange Rate | 2025 | 2024 | 2023 | |||
| At the end of the year - MYR | MYR4.0610 to $1.00 | MYR4.4755 to $1.00 | MYR4.5915 to $1.00 | |||
| Average rate for the year - MYR | MYR4.2806 to $1.00 | MYR4.5712 to $1.00 | MYR4.5653 to $1.00 | |||
iii
Part I
Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not Applicable.
Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable.
Item 3. KEY INFORMATION
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
Risks Related to Our Business and Industry
Our limited operating history in a rapidly evolving industry makes it difficult to accurately forecast our future operating results and evaluate our business prospects.
We commenced operations through our subsidiary Founder Energy (Malaysia) in April 2021 and have a limited operating history. Members of our management team may still be in the process of exploring approaches to running our Company and reaching consensus among themselves, which may affect the efficiency and results of our operation. Due to our limited operating history, our historical growth rate may not be indicative of our future performance. Our future performance may be more susceptible to certain risks than a company with a longer operating history in the same or a different industry. Many of the factors discussed below could adversely affect our business and prospects and future performance, including:
| ● | our ability to maintain, expand, and further develop our relationships with our clients to meet their increasing demand; |
| ● | the continued growth and development of the solar energy industry; |
| ● | our ability to keep up with the technological developments or new business models of the rapidly evolving solar energy industry; |
| ● | our ability to attract and retain qualified and skilled employees; |
| ● | our ability to effectively manage our growth; and |
| ● | our ability to compete effectively with our competitors in the solar energy industry. |
We may not be successful in addressing the risks and uncertainties listed above, among others, which may materially and adversely affect our business, results of operations, financial condition, and future prospects.
1
Our business is project based and we may not be able to continuously secure large-scale solar projects to support our high growth in revenue and profit.
For the fiscal years ended December 31, 2023, 2024, and 2025, our revenue generated from large-scale solar projects services was RM131,988,574 (approximately US$28,746,286), RM68,864,991 (approximately US$15,387,105), and RM73,706,601 (approximately US$18,149,866), respectively, accounting for 89%, 76% and 61% of our total revenue, respectively. For the fiscal years ended December 31, 2023, 2024, and 2025, our total revenue was RM148,053,973 (approximately US$32,245,230), RM90,344,588 (approximately US$20,186,479), and RM120,697,610 (approximately US$29,721,156), respectively, representing a negative growth rate of 39% from fiscal year 2023 to fiscal year 2024, and a growth rate of 33.6% from fiscal year 2024 to fiscal year 2025. For the same fiscal years, our net income was RM7,147,068 (approximately US$1,556,586), net loss of RM5,150,005 (approximately US$1,150,711) and net loss of RM7,275,141 (approximately US$1,791,465) , respectively, representing a negative growth rate of 172% from fiscal year 2023 to fiscal year 2024, and a negative growth rate of 41% from fiscal year 2024 to fiscal year 2025. The nature of our EPCC services is project based. The project-based nature of our business brings with it a risk of not being able to consistently secure large-scale solar projects, which could impact our ability to support revenue and profit growth. Large-scale solar projects typically have lengthy development cycles, averaging between 13 to 19 months, which introduces uncertainty into our project pipeline and financial projections.
The extended duration of large-scale solar projects poses several challenges. The lengthy development phase increases the time between securing a project and generating revenue from it. This time gap can strain cash flow and working capital, potentially affecting our ability to meet financial obligations and invest in future projects. The prolonged timeline also increases exposure to market fluctuations, regulatory changes, and other external factors that may impact project viability and profitability. In addition, the process of securing large-scale solar projects is typically competitive and subject to various factors beyond our control, such as government policies, incentives, and market dynamics. If we experience delays or face challenges in securing large-scale projects, it may materially and adversely affect our business, results of operations, financial condition, and future prospects.
If our subsidiary Founder Energy (Malaysia) fails to comply with the Construction Industry Development Board Malaysia Act 1994 (“CIDBA 1994”), its business operations could be materially and adversely affected.
The CIDBA 1994 regulates the establishment of Malaysian Construction Industry Development Board (“CIDB”) and provides for its function in relation to the construction industry and all matters connected therewith throughout Malaysia. Under CIDBA 1994, contractors are mandated to register with CIDB and possess a valid certificate of registration to undertake construction works. Additionally, Section 34(1) of the CIDBA 1994 requires contractors to declare and submit awarded construction contracts to CIDB.
As of the date of this annual report, our subsidiary, Founder Energy (Malaysia) holds a valid Grade G7 certificate of registration issued under CIDBA 1994. However, Founder Energy (Malaysia) breached Section 34(1) of the CIDBA 1994 by failing to declare and submit 31 contracts to CIDB. Among these contracts, 12 were awarded to Founder Energy (Malaysia) as the main contractor, with six contracts exceeding RM500,000 in value, while the remaining 19 were awarded to Founder Energy (Malaysia) as a sub-contractor. Founder Energy (Malaysia) potentially faces a fine of up to RM1,550,000.
As a result of the breach, Founder Energy (Malaysia) may be subject to fines or penalties or its certificate of registration may be subject to suspension or revocation, which could result in a material adverse impact on our operations. Although Founder Energy (Malaysia) has rectified this non-compliance by promptly declaring and submitting these contracts with CIDB, Founder Energy (Malaysia) is still subject to risk of fines and/or regulatory actions from the CIDB. As of the date of this annual report, Founder Energy (Malaysia) has not been fined or issued with any notice of non-compliance from CIDB or any other relevant authorities. See “Item 4. Information on the Company-B. Business Overview-Regulations-Regulations Relating to Our EPCC Services in Malaysia-Construction Industry Development Board Malaysia Act 1994.”
2
If our subsidiary Founder Assets fails to secure approval from the Energy Commission of Malaysia, its business operations could be materially and adversely affected.
In February 2023, our subsidiary, Founder Assets, entered into a deed of novation with two Malaysian entities, party A and party B, and maintain a solar PV system, while party B agrees to purchase power generated from the system for a 20-year term. See “Item 4. Information on the Company-B. Business Overview-Our Growth Strategies-Expand Our Investment in Renewable Energy Assets, Such as Solar PV Systems.” To carry out this project, Founder Assets successfully applied for and were granted a License for Public Installation by the Energy Commission of Malaysia. This license authorizes the use, operation, and maintenance of a solar PV system for the supply of electricity to party B under the PPA. However, this license imposes restrictions on changes in shareholders and the shareholding structure of Founder Assets. As of the date of this annual report, the project has been fully completed and is operating in compliance with all applicable laws; and Founder Assets is actively in the process of seeking written approval from the Energy Commission of Malaysia concerning changes in shareholding structure resulting from Founder Group’s initial public offering (the “IPO”). Even though failure to secure such approval will not materially affect our financial conditions, we may face the risk of having our License for Public Installation suspended or revoked by the Energy Commission of Malaysia., leading to adverse effects on Founder Assets’ business operations. However, as of the date of this annual report, we have confirmed that we have not received any notice of suspension or revocation that would render the license invalid.
We face risks associated with concentration of revenue from a few large clients. Any interruption in operations in such major clients may have an adverse effect on our business, financial condition, and results of operations.
In fiscal year 2025, we derived a significant portion of our revenue from 3 customers, Boon Boon Builder Sdn Bhd, Reservoir Link Renewable Sdn Bhd, and Nestcon Solar Sdn Bhd, which contributed 28%, 17% and 12% of our total revenue, respectively. In fiscal year 2024, we derived a significant portion of our revenue from two customers, JS Solar Sdn. Bhd. and Samaiden Sdn. Bhd., which contributed 23.25% and 11.55% of our total revenue, respectively. In fiscal year 2023, we derived a significant portion of our revenue from three customers, Atlantic Blue Sdn Bhd., Samaiden Sdn Bhd. and Customer S, which contributed 29.87%, 15.60%, and 10.60% of our total revenue, respectively.
We are not dependent on the above-mentioned customers for our business continuity as our contracts with them are on project basis and we have been able to secure projects from different customers over the last three fiscal years. As of the date of this annual report, we have eight on-going large-scale solar projects and fifteen on-going C&I projects. See “Item 4. Information on the Company-B. Business Overview-Our Solar Projects.” However, the substantial contribution of revenue from specific customers indicates that our financial performance is heavily reliant on their project requirements and timelines. If there are delays, cancellations, or reduced project activity from these customers, our revenue stream could be significantly impacted.
We are exposed to risks related to concentration of suppliers as we rely on a few major suppliers, and such concentration may have a material adverse effect on our business and results of operations.
In fiscal years 2023 and 2024, a significant portion of our purchase was from Xiamen Solar First Energy Technology Co. Ltd., representing 29.72% and 14.88% of our total purchase in fiscal years 2023 and 2024 respectively. , respectively. In June 2021, by way of a deed of novation, we entered into a distributorship agreement with Xiamen Solar First Energy Technology Co. Ltd. and became its exclusive distributor of solar mounting systems in Malaysia. The distributorship agreement was effective until January 1, 2025. We did not renew the distributorship agreement; however, we are still able to make purchases from Xiamen Solar First Energy Technology Co. Ltd., on an as needed basis. If Xiamen Solar First Energy Technology Co. Ltd. would cease allowing us to make purchases, it would materially and adversely affect our results of operations and we may not be able to find a different supplier on commercially reasonable terms or on a timely basis. As of the date of this annual report, all of the solar mounting systems that we sourced have been purchased from Xiamen Solar First Energy Technology Co. Ltd. and its affiliate Solar First Energy Technology Co. Ltd. For other types of equipment and materials, we source and purchase from third-party suppliers on the market.
Due to the concentration of our purchases in a few suppliers, any interruption of the operations of our suppliers, any failure of our suppliers to accommodate our growing business scale, any termination or suspension of our supply arrangements, any change in cooperation terms, or the deterioration of cooperative relationships with these suppliers may materially and adversely affect our results of operations. We cannot assure you that we would be able to find replacement suppliers on commercially reasonable terms or on a timely basis.
3
We depend on our subcontractors to perform part of our services.
We depend on our subcontractors to perform the physical construction and installation works, including civil works, building works, mechanical works and electrical works. Subcontractors’ costs accounted for approximately 85.75%, 53.88% and 67.39% of our total cost of sales in fiscal years 2023, 2024, and 2025, respectively. As such, we are subject to risks associated with non-performance, late performance or poor performance by our subcontractors. If our subcontractors fail to meet customer expectations or deliver subpar works, our reputation in the solar energy industry may be damaged. In addition, in the event that our subcontractors cause damage to property, fail to meet safety standards, or violate regulations, we could potentially be exposed to legal and financial liabilities. While we may attempt to seek damages from the relevant subcontractors, we may, from time to time, be required to compensate our clients prior to receiving the said damages from the relevant contractors. In the event that we are unable to seek damages from the relevant subcontractors or the amount of the claims cannot be recovered in full or at all from the subcontractors, we may be required to bear some or all the costs of the claims, which may in turn adversely affect our profitability and financial performance.
We may face unanticipated increases in project costs.
We estimate our project costs at the time of bidding or negotiating for projects. The contract value is priced based on our cost estimates and project scheduling that are derived from assumptions such as prices of solar PV equipment, which are quoted to us or transacted in USD as well as costs and availability of labor and prices of the relevant machineries and equipment. Our cash flows and profit margin from the projects are therefore dependent upon our ability to accurately estimate these costs and timeline. Such costs and timeline may be affected by a variety of factors, such as depreciation of MYR against USD, slower than anticipated progress, conditions at project sites differing materially from what was anticipated at the time we bid for the contract, higher costs of equipment, material and labor, and delay in material deliveries and project financing closure.
In such events, we may incur cost overruns which will affect our cash flows and financial performance. These variations in costs may cause actual gross profit for a project to differ from those originally estimated. As a result, certain projects could have lower margins than anticipated, or incur losses if actual costs for the projects exceed their estimates.
Our business and financial performance are affected by project execution.
We have to adhere to certain agreed milestone for the completion of our projects. We are subject to the risk of claims and/or penalties pertaining to liquidated damages and pre-set penalties for late completion as stipulated in contracts for large-scale solar projects and C&I solar projects. These penalties, if imposed, may have an adverse effect on our financial performance. Incidents which may affect our project execution include delay in delivery of materials, workplace hazards, damage to equipment and materials, weather conditions and major pandemic outbreaks. As of the date of this annual report, we have not experienced any penalty. Nevertheless, there is no assurance that we would not experience penalties pertaining to delays in completion of projects in the future.
We depend on the retention and procurement of certain approvals, registrations, permits and licenses.
In order to operate our business, we are required to obtain and hold valid approvals, permits and licenses such as registrations with the Sustainable Energy Development Authority (“SEDA”) of Malaysia, Energy Commission of Malaysia (“ST”) and the Malaysia Construction Industry Development Board (“CIDB”). Please see “Item 4. Information on the Company-B. Business Overview-Approvals, Permits and Licenses.” We must comply with the restrictions and conditions imposed by the relevant authorities in order to maintain the validity of such approvals, permits and licenses. Our approvals, permits and licenses may be suspended or cancelled if we fail to comply with the applicable requirements or any conditions of the approvals, permits and licenses. Delay or refusal may also occur when renewing such approvals, permits or licenses upon their expiration. Failure to keep or renew the required approvals, permits or licenses could result in suspension or restriction of our business operations. We will not be able to participate in tenders for contracts or carry out our role as the EPCC contractor, which will adversely affect our business and financial performance.
Furthermore, we also plan to venture into hydropower and biogas plant development projects in Southeast Asia countries. The implementation of this business plan is subject to us securing the licenses and/or permits in the relevant countries. In the event that we are unable to meet these regulatory requirements, we may not be able to implement this part of our business strategies and plan, which may affect our future business and financial performance.
4
Our business is subject to inherent risks in the solar energy industry.
Our business is subject to inherent risks within the solar energy industry. The solar energy industry is influenced by various factors, such as government policies, regulations, subsidies, and incentives. Changes in these factors can lead to market uncertainty and affect the demand for solar PV systems. For example, reductions in government incentives or changes in energy policies can impact the profitability of solar projects. In addition, the cost of solar PV components, such as PV modules, inverters, and installation materials, can be subject to volatility. Fluctuations in raw material prices, supply chain disruptions, and changes in manufacturing capacities can impact the overall cost of solar PV systems. These cost fluctuations can affect project economics and profitability. Furthermore, solar PV systems depend on sunlight to generate electricity. Variations in weather patterns, including cloud cover, shading, and seasonal changes, can affect the energy output of solar installations. Locations with less predictable or insufficient sunlight may have lower energy production, potentially impacting the financial viability of solar projects.
The factors discussed above, which include changes to market conditions or situations, may affect the financial attractiveness of solar PV projects, which in turn may adversely affect our business and financial performance.
Technological improvements in power generation may result in more cost efficient and environmentally friendly methods of power generation compared to using solar PV systems.
There are other environmentally friendly methods of power generation besides solar energy, including using various sources of primary energy, such as wind, waves and current, solar thermal energy and geothermal energy. Currently, Malaysia’s renewable energy capacity stands at 25%, approaching the national target of achieving 31% share of renewables in the overall installed capacity mix by 2025.1 This capacity is primarily attributed to solar and hydro energy. However, improvement in technologies for other methods of power generation may make them more competitive compared to using solar PV panels. As such, in the event that other methods of power generation are preferred compared to using solar PV panels, it may negatively affect our business and financial performance.
The industry in which we operate is highly competitive, and we may not be able to compete successfully against existing or new competitors, which could reduce our market share and adversely affect our competitive position, financial performance and results of operations.
The solar energy industry in Malaysia is highly-competitive and rapidly evolving, with many new companies joining the competition in recent years and a few leading companies. Competition is expected to increase significantly in the future.
Our competitors may operate with different business models, have different cost structures, and may ultimately prove to be more successful or more adaptable to new regulatory, technological, and other developments. They may in the future achieve greater market acceptance and recognition and gain a greater market share. It is also possible that potential competitors may emerge and acquire a significant market share. If existing or potential competitors develop or offer services that provide significant performance, price, creative optimization, or other advantages over those offered by us, our business, results of operations, and financial condition would be negatively affected. Our existing and potential competitors may enjoy competitive advantages over us, such as longer operating history, greater brand recognition, more competitive pricing, and significantly greater financial, technical, and marketing resources.
If we fail to compete successfully, we are at risk of losing clients, which could result in an adverse impact on our financial performance and business prospects. We cannot assure you that our strategies will remain competitive or that they will continue to be successful in the future. Increasing competition may result in pricing pressure and loss of our market share, either of which could have a material adverse effect on our financial condition and results of operations.
| 1 | Malaysian Investment Development Authority (MIDA) (March 20, 2023) “Malaysia Current Renewable Energy Capacity Level is at 25%”, Malaysia |
https://www.mida.gov.my/mida-news/malaysias-current-renewable-energy-capacity-level-is-at-25-says-nik-nazmi/#:~:text=Malaysia’s%20current%20renewable%20energy%20(RE,Minister%20Nik%20Nazmi%20Nik%20Ahmad
5
Our business is subject to risks related to political, social and economic events in Malaysia.
Our business is subject to prevailing political, social and economic conditions in Malaysia. Any adverse developments in the above conditions may harm our financial position and business prospects. The risks include, among others, political instability due to changes in political leadership, economic downturn, risk of war or civil disturbances, declaration of a state emergency, changes in Malaysia government policies, introduction of new regulations, import and export restrictions, duties and tariffs. The occurrence of these events in Malaysia could adversely affect our business sentiment and consumer confidence, leading to reduced business and consumer spending and investment. This, in turn, may cause our existing and prospective customers to delay, reduce, or abandon their plans to engage our services. As such, there can be no assurance that political, social and economic events in Malaysia and other countries, which are beyond our control, would not materially affect our business operations and financial performance.
We are subject to the risk of claims against system performance warranty and defect liability.
We are exposed to the risk of system performance warranty claims after acceptance of our subcontract works as we provide performance warranty for the large-scale solar projects and C&I projects, in the form of achieving a minimum performance ratio during the defect liability period, which is typically 24 months. See “Item 4. Information on the Company-B. Business Overview-Our Services-Process Flow-Post-completion-Warranties and Defect Liabilities.” We are also exposed to the risk of defect liability claims for our large-scale solar projects and C&I projects. Claims against our failure to meet minimum performance ratio or defect liability claims, may have an impact on our financial performance.
If we fail to manage our growth or execute our strategies and future plans effectively, we may not be able to take advantage of market opportunities or meet the demand of our customers.
Our business has grown substantially since our inception, and we expect it to continue to grow in terms of the scale and diversity of operations. For example, we plan to expand our EPCC services to encompass other types of renewable energy, namely hydropower and biogas. See “Item 4. Information on the Company-B. Business Overview-Our Growth Strategies-Offer EPCC Services to Other Types of Renewable Energy, Such as Hydropower and Biogas”. This expansion increases the complexity of our operations and may cause strain on our managerial, operational, and financial resources. We must hire experienced professionals with expertise in hydropower and biogas, or provide training and development opportunities to existing staff members. If our new hires perform poorly or if we are unsuccessful in hiring, training, managing, and integrating qualified employees, our business, financial condition, and results of operations may be materially harmed.
Our future results of operations also depend largely on our ability to execute our future plans successfully. In particular, our continued growth may subject us to the following additional challenges and constraints:
| ● | we face challenges in recruiting, training, and retaining highly skilled personnel, including areas of sales and marketing, design and technical, optimization skills, and information technology for our growing operations; |
| ● | the execution of our future plan will be subject to the availability of funds to support the relevant capital investment and expenditures; and |
| ● | the successful execution of our strategies is subject to factors beyond our control, such as general market conditions, economic, and political development in Malaysia and globally. |
All of these endeavors involve risks and will require significant management, financial, and human resources. We cannot assure you that we will be able to effectively manage our growth or to implement our strategies successfully. Besides, there is no assurance that the investment to be made by our Company as contemplated under our future plans will be successful and generate the expected return. If we are not able to manage our growth or execute our strategies effectively, or at all, our business, results of operations, and prospects may be materially and adversely affected.
6
Our business is geographically concentrated, which subjects us to greater risks from changes in local or regional conditions.
All of our current operations are located in Malaysia. Due to this geographic concentration, our financial condition and operating results are subject to greater risks from changes in general economic and other conditions in Malaysia, than the operations of more geographically diversified competitors. These risks include:
| ● | changes in economic conditions and unemployment rates; |
| ● | changes in laws and regulations; |
| ● | changes in the competitive environment; and |
| ● | adverse weather conditions and natural disasters. |
As a result of the geographic concentration of our business, we face a greater risk of a negative impact on our business, financial condition, results of operations, and prospects in the event that Malaysia is more severely impacted by any such adverse condition, as compared to other countries.
We may be unsuccessful in expanding and operating our business internationally, which could adversely affect our results of operations.
We plan to expand our business in other country in Southeast Asia for the next two years, such as the Philippines. We plan to establish our presence in the Philippines in the third quarter of 2026. For details, see “Item 4. Information on the Company-B. Business Overview-Our Growth Strategies-Expand Our Business from Malaysia to Other Countries in the Southeast Asia region.” The entry and operation of our business in these markets could cause us to be subject to unexpected, uncontrollable, and rapidly changing events and circumstances outside Malaysia. As we grow our international operations in the future, we may need to recruit and hire new product development, sales, marketing, and support personnel in the countries in which we will launch our services or otherwise have a significant presence. Entry into new international markets typically requires the establishment of new marketing channels. Our ability to continue to expand into international markets involves various risks, including the possibility that our expectations regarding the level of returns we will achieve on such expansion will not be achieved in the near future, or ever, and that competing in markets with which we are unfamiliar may be more difficult than anticipated. If we are less successful than we expect in a new market, we may not be able to realize an adequate return on our initial investment and our operating results could suffer.
7
Our international operations may also fail due to other risks inherent in foreign operations, including:
| ● | varied, unfamiliar, unclear, and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to solar energy industry; |
| ● | compliance with multiple and potentially conflicting regulations in other countries in Southeast Asia; |
| ● | difficulties in staffing and managing foreign operations; |
| ● | longer collection cycles; |
| ● | proper compliance with local tax laws, which can be complex and may result in unintended adverse tax consequences; |
| ● | difficulties in enforcing agreements through foreign legal systems; |
| ● | fluctuations in currency exchange rates that may affect service demand and may adversely affect the profitability in MYR of services provided by us in foreign markets where payment for our services is made in the local currency; |
| ● | changes in general economic, health, and political conditions in countries where our services are provided; |
| ● | disruptions caused by acts of war; |
| ● | potential labor strike, lockouts, work slowdowns, and work stoppages; and |
| ● | different consumer preferences and requirements in specific international markets. |
Our current and any future international expansion plans will require management attention and resources and may be unsuccessful. We may find it impossible or prohibitively expensive to continue expanding internationally or we may be unsuccessful in our attempt to do so, and our results of operations could be adversely impacted.
Third parties may claim that we infringe their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services.
We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how, or other intellectual property rights held by third parties. We may be from time to time in the future subject to legal proceedings and claims relating to infringement of the intellectual property rights of others. We may be subject to allegations that we have infringed on the trademarks, copyrights, patents, and other intellectual property rights of third parties, including our competitors, or that we are involved in unfair trade practices. In addition, there may be third-party trademarks, patents, copyrights, know-how, or other intellectual property rights that are infringed by our products, services, or other aspects of our business without our awareness. Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in various jurisdictions.
If any third-party infringement claims are brought against us, we may be forced to divert management’s time and attention and other resources from our business and operations to defend against these claims, regardless of their merits. Additionally, the application and interpretation of intellectual property right laws and the procedures and standards for granting trademarks, patents, copyrights, know-how, or other intellectual property rights are evolving and may be uncertain, and we cannot assure you that courts or regulatory authorities would agree with our analysis. Such claims, even if they do not result in liability, may harm our reputation. If we were found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our business and financial performance may be materially and adversely affected.
8
If we fail to attract, recruit, or retain our key personnel, including our executive officers, senior management, and key employees, our ongoing operations and growth could be affected.
Our success also depends, to a large extent, on the efforts of our key personnel, including our executive officers, senior management, and other key employees who have valuable experience, knowledge, and connection in the solar energy industry. Mr. Lee Seng Chi, our Director and Chief Executive Officer, has over 12 years of experience in the solar industry and held senior leadership positions in multiple engineering companies before founding Founder Energy in 2021. There is no assurance that these key personnel will not terminate their employment with us. We do not carry key person insurance on any of our senior management team. The loss of any of our key personnel could be detrimental to our ongoing operations. Our success will also depend on our ability to attract and retain qualified personnel to manage our existing operations as well as our future growth. We may not be able to successfully attract, recruit, or retain key personnel, and this could adversely impact our growth.
Future acquisitions may have an adverse effect on our ability to manage our business.
We may acquire businesses, technologies, services, or products that are complementary to our solar PV installation business. Future acquisitions may expose us to potential risks, including risks associated with the integration of new operations, services, and personnel, unforeseen or hidden liabilities, the diversion of resources from our existing business and technology, our potential inability to generate sufficient revenue to offset new costs, the expenses of acquisitions, or the potential loss of or harm to relationships with both employees and customers resulting from our integration of new businesses.
Any of the potential risks listed above could have a material adverse effect on our ability to manage our business, revenue, and net income. We may need to raise additional debt funding or sell additional equity securities to make such acquisitions. The raising of additional debt funding by our Company, if required, would result in increased debt service obligations and could result in additional operating and financing covenants, or liens on their assets, that would restrict their operations. The sale of additional equity securities could result in additional dilution to our shareholders.
We may from time to time be subject to claims, controversies, lawsuits, and legal proceedings, which could adversely affect our business, prospects, results of operations, and financial condition.
We may from time to time become subject to or involved in various claims, controversies, lawsuits, and legal proceedings. However, claims and threats of lawsuits are subject to inherent uncertainties, and we are uncertain whether any of these claims would develop into a lawsuit. Lawsuits, or any type of legal proceeding, may cause our Company to incur defense costs, utilize a significant portion of our resources, and divert management’s time and attention from our day-to-day operations, any of which could harm our business. Any settlements or judgments against our Company could have a material adverse impact on our financial condition, results of operations, and cash flows. In addition, negative publicity regarding claims or judgments made against our Company may damage our reputation and may result in a material adverse impact on us.
We may be the subject of allegations, harassment, or other detrimental conduct by third parties, which could harm our reputation and cause us to lose market share.
We may be subject to allegations by third parties or purported former employees, negative Internet postings, and other adverse public exposure on our business, operations, and staff compensation. We may also become the target of harassment or other detrimental conduct by third parties or disgruntled former or current employees. Such conduct may include complaints, anonymous, or otherwise, to regulatory agencies, media, or other organizations. We may be subject to government or regulatory investigation or other proceedings as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to address such third-party conduct, and there is no assurance that we will be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Additionally, allegations, directly or indirectly against our Company, may be posted on the Internet, including social media platforms, by anyone on an anonymous basis. Any negative publicity about our Company or our management can be quickly and widely disseminated. Social media platforms and devices immediately publish the content of their users’ posts, often without filters or checks on the accuracy of the content posted. The information posted may be inaccurate and adverse to our Company, and it may harm our reputation, business, or prospects. The harm may be immediate without affording us an opportunity for redress or correction. Our reputation may be negatively affected as a result of the public dissemination of negative and potentially false information about our business and operations, which in turn may cause us to lose market share,
9
Our current insurance policies may not provide adequate levels of coverage against all claims, and we may incur losses that are not covered by our insurance.
We believe we maintain insurance coverage that is customary for businesses of our size and type. However, we may be unable to insure against certain types of losses or claims, or the cost of such insurance may be prohibitive. Uninsured losses or claims, if they occur, could have a material adverse effect on our reputation, business, results of operations, financial condition, or prospects.
Our large-scale solar projects are dependent on our relationship with the project awarders.
For the majority of our large-scale solar projects, we usually act as the contractor to the project awarders. Project awarders are service providers or main contractors who secure solar project bids from project owners and then subcontract the work to subcontractors. In the event that a solar project owner decides to terminate its contract with the project awarder, who has subcontracted work to us, it may lead to the termination of our contract with the project awarder. Such terminations may arise due to various factors, including changes in project priorities, financial constraints, or unforeseen circumstances, and could have a material adverse effect on our financial condition, results of operations, and overall business prospects.
Additionally, there is a risk of contract termination for convenience by the project awarders or the project awarders omitting or terminating any part of the contract works. The termination of our contract or the omission of specific contract works by the main contractor could result in financial consequences, potential project delays, and adverse impacts on our business performance. Further, any disruption in our relationship with project awarders, including but not limited to disputes, financial instability, or changes in strategic direction, may impact our ability to secure contracts and perform EPCC services.
We are subject to work variations due to changes in laws and regulations in Malaysia.
Our operations in Malaysia are subject to the regulatory environment. The regulatory landscape in Malaysia is subject to change. Alterations in laws, regulations, or government policies can impact various aspects of our projects, including licensing requirements, environmental standards, safety protocols, and other compliance measures. Such changes may necessitate modifications to ongoing projects, potentially leading to delays, increased costs, or adjustments in project scope.
In addition, our contractual agreements are often structured based on existing legal frameworks. Changes in laws may trigger variations in contract terms, specifications, or requirements, potentially leading to negotiations with project owners, subcontractors, or other stakeholders. Such variations could have financial implications and may require us to adapt our project execution strategies.
We are subject to risks associated with loan and financing arrangements.
In the ordinary course of our business, we enter into loan and financing agreements with financial institutions to support our operational and growth initiatives. These arrangements are crucial for maintaining liquidity and funding our activities; however, they expose the Company to several significant risks, including interest rate fluctuations, covenant compliance requirements, liquidity constraints, refinancing uncertainties, credit rating vulnerabilities, regulatory and legal risks, foreign exchange exposures, and ownership transfer of receivables in the event of default. The occurrence of such risks could result in such agreements being terminated or becoming less favorable to the Company, which could have a material adverse effect on our financial condition, or prospect.
Risks Related to Our Class A Ordinary Shares and the Trading Market
If we are unable to maintain compliance with all applicable Nasdaq continued listing requirements and standards, our Class A Ordinary Shares could be delisted from Nasdaq.
Our Class A Ordinary Shares are currently listed on the Nasdaq Capital Market. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding minimum share price and publicly held shares. We have previously received notices of non-compliance from Nasdaq relating to with Nasdaq’s minimum publicly held shares requirement under Listing Rule 5550(a)(4). Although we have regained compliance with Nasdaq’s minimum publicly held shares requirement under Listing Rule 5550(a)(4), there can be no assurances that we will be able to comply with all the applicable Nasdaq listing standards in the future. In the event that our Class A Ordinary Shares are delisted from Nasdaq as a result of our failure to comply with the Nasdaq continued listing standards, trading in our Class A Ordinary Shares could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our Class A Ordinary Shares, and it would likely be more difficult to obtain coverage by securities analysts and the news media, which could cause the price of our Class A Ordinary Shares to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a national exchange.
10
Our dual class structure may be dilutive to the voting power of Class A Ordinary Shareholders.
On July 8, 2025, at the 2025 extraordinary general meeting, to implement a dual class structure, our shareholders approved a resolution to amend and restate the Company’s then-effective Memorandum and Articles of Association to reflect (among other things) the revised authorized share structure of the Company and the terms of the Class A Ordinary Shares and Class B Ordinary Shares.
Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights and privileges except for voting and conversion rights. In respect of all matters subject to vote by way of poll at general meetings of the Company, each holder of Class A Ordinary Shares will be entitled to one (1) vote per one (1) Class A Ordinary Share and each holder of Class B Ordinary Shares will be entitled to 20 votes per one (1) Class B Ordinary Share. Class B Ordinary Shares are automatically convertible into Class A Ordinary Shares where any Class B Ordinary Share is the subject of any sale, transfer, assignment, or disposal of a legal, beneficial or other interest in that Class B Ordinary Share to a holder that is not a holder of Class B Ordinary Shares nor (i) a spouse, child, grandchild and their successors (the “Privileged Relation”) of the holder; (ii) any company or other entity over which that holder has control; or (iii) a trust set up wholly for the benefit of that shareholder and/or the Privileged Relation of that shareholder (the “Permitted Transferee”), or a person who ceases to be a Permitted Transferee, in which each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share. The creation of any pledge, charge, encumbrance or third party right over any Class B Ordinary Share to secure contractual or legal obligations of a holder of Class B Ordinary Shares shall not be deemed as a sale transfer, assignment or disposition unless such pledge, charge, encumbrance or third party right is enforced and it results in a third party holding legal title to the Class B Ordinary Share, in which case the Class B Ordinary Share will automatically convert to a Class A Ordinary Share. Class B Ordinary Shares are convertible voluntarily at any time after issuance at the option of the holder, upon 10 business days’ prior written notice to the Company, in which each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share. Additionally, on the written request of the shareholder, the Company has the right at its discretion to automatically convert each one (1) Class A Ordinary Share into one (1) Class B Ordinary Share, in which each one (1) Class A Ordinary Share is convertible into one (1) Class B Ordinary Share and/or each one (1) Class B Ordinary Share into one (1) Class A Ordinary Share, in which, each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share.
The dual class structure of our Ordinary Shares has the effect of concentrating voting control with holders of Class B Ordinary Shares. Our Class B Ordinary Shares have stronger voting power than our Class A Ordinary Shares and certain existing shareholders have substantial influence over our Company and their interests may not be aligned with the interests of our other shareholders.
Concentration of voting power allows certain shareholders to exert significant control and prevent actions favored by other shareholders.
As of the date of this annual report, Reservoir Link Energy Bhd. beneficially owns 6.61% of our issued and outstanding Class A Ordinary Shares and 21.45% of our issued and outstanding Class B Ordinary Shares; our Chief Executive Officer, Director, and Chairman of the Board of Directors, Lee Seng Chi, beneficially owns 3.05% our issued and outstanding Class A Ordinary Shares and 55.71% of our issued and outstanding Class B Ordinary Shares; our non-executive director, Thien Chiet Chai, beneficially owns 22.84% of our issued and outstanding Class B Ordinary Shares. As a result, Reservoir Link Energy Bhd., Lee Seng Chi and Thien Chiet Chai beneficially own approximately 16.79%, 39.17% and 15.67%, respectively, of the aggregate voting power of our issued and outstanding shares. As a result, these shareholders will have significant influence over all matters that require approval by our shareholders, including the appointment and removal of directors and approval of certain significant corporate transactions. Corporate action might be taken even if other shareholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our Company that other shareholders may view as beneficial.
11
If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our Class A Ordinary Shares may be materially and adversely affected.
We are subject to reporting obligations under U.S. securities laws. The SEC adopted rules pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 requiring every public company to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of its internal control over financial reporting. 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 not effective. 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 significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.
In preparing our consolidated financial statements as of and for the fiscal years ended December 31, 2023, 2024, and 2025, we and our independent registered public accounting firm have identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board, and other control deficiencies. The material weaknesses identified included a lack of accounting staff and resources with appropriate knowledge of International Financial Reporting Standards and SEC reporting and compliance requirement and deficiency of internal journal entries procedure. Following the identification of the material weaknesses and control deficiencies, we plan to continue to take remedial measures: such as (i) implementing regular and continuous International Financial Reporting Standards accounting and financial reporting training programs for our accounting and financial reporting personnel; and (ii) engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control. However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to correct the material weaknesses or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, and the trading price of our Class A Ordinary Shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.
We have incurred substantial increased costs as a result of being a public company.
As a public company, we have incurred significant legal, accounting, and other expenses that we did not incur as a private company prior to our IPO. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies. Compliance with these rules and regulations have increased our legal and financial compliance costs and made some corporate activities more time-consuming and costlier. We have incurred additional costs in obtaining director and officer liability insurance. In addition, we have incurred additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.
12
Substantial future sales of our Class A Ordinary Shares or the anticipation of future sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary Shares to decline.
Sales of substantial amounts of our Class A Ordinary Shares in the public market, or the perception that these sales could occur, could cause the market price of our Class A Ordinary Shares to decline. An aggregate of 854,310 Class A Ordinary Shares are currently outstanding as of the date of this annual report and 764,347 shares are freely tradable. The remaining Class A Ordinary Shares are “restricted securities” as defined in Rule 144. These Class A Ordinary Shares may be sold without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities Act. Sales of these shares into the market could cause the market price of our Class A Ordinary Shares to decline.
We do not intend to pay dividends for the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary Shares increases.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
Any trading market for our Class A Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Class A Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline.
The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance.
The market price of our Class A Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
| ● | actual or anticipated fluctuations in our revenue and other operating results; |
| ● | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
| ● | actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our Company, or our failure to meet these estimates or the expectations of investors; |
| ● | announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; |
| ● | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
| ● | lawsuits threatened or filed against us; and |
| ● | other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. |
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.
13
If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we are not required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently are a foreign private issuer, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations.
Because we are a foreign private issuer and are exempt from certain corporate governance standards established by the national securities exchanges that are applicable to U.S. issuers, you have less protection than you would have if we were a domestic issuer.
As a business company limited by shares incorporated under the laws of the British Virgin Islands, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the British Virgin Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We have relied on and plan to rely on home country practice with respect to our corporate governance. Specifically, we have elected to be exempt from the requirements under Nasdaq Listing Rule 5635 to obtain shareholder approval for (i) the issuance 20% or more of our outstanding Ordinary Shares or voting power in a private offering, (ii) the issuance of securities pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or materially amended, (iii) the issuance of securities when the issuance or potential issuance will result in a change of control of our Company, and (iv) certain acquisitions in connection with the acquisition of the stock or assets of another company. As a result, our shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
If we cannot continue to satisfy the listing requirements and other rules of the Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
Our securities are listed on the Nasdaq Capital Market. We cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market. In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum stockholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we currently meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.
If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including:
| ● | a limited availability for market quotations for our securities; |
| ● | reduced liquidity with respect to our securities; |
| ● | a determination that our Class A Ordinary Shares are a “penny stock,” which will require brokers trading in our Class A Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Shares; |
| ● | limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
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Anti-takeover provisions in our M&A may discourage, delay, or prevent a change in control.
Some provisions of our M&A may discourage, delay or prevent a change in control of our Company or management that shareholders may consider favorable, including, among other things, the following:
| ● | provisions that authorize our board of directors to issue shares with preferred, deferred or other special rights or restrictions without any further vote or action by our shareholders; and |
| ● | provisions that restrict the ability of our shareholders to call shareholder meetings. |
Additionally, under the laws of the BVI, our directors may only exercise the rights and powers granted to them under our M&A for what they believe in good faith to be in the best interests of our Company and for a proper purpose.
The exclusive jurisdiction provision in our M&A may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our M&A provide that, to the fullest extent permitted by applicable law, unless our board of directors consents in writing to the selection of an alternative forum, the courts of the BVI shall have exclusive jurisdiction to hear and determine:
| ● | (i) any dispute, suit, action, proceedings, controversy, or claim of any kind arising out of or in connection with our M&A, including, without limitation, claims for set-off and counterclaims and any dispute, suit, action, proceedings, controversy, or claim of any kind arising out of or in connection with: (x) the creation, validity, effect, interpretation, performance, or non-performance of, or the legal relationships established by, our M&A; or (y) any non-contractual obligations arising out of or in connection with our M&A; or |
| ● | (ii) any dispute, suit, action (including, without limitation, any derivative action or proceeding brought on behalf or in our name or any application for permissions to bring a derivative action), proceedings, controversy, or claim of any kind relating or connected to us, our board of directors, officers, management, or shareholders arising out of or in connection with the BVI Act, the Insolvency Act, any other statute, rule, or common law of the BVI affecting any relationship between us, our shareholders, and/or our directors and officers (or any of them) or any rights and duties established thereby (including, without limitation, Division 3 of Part VI and Part XI of the BVI Act and section 162(1)(b) of the Insolvency Act, and fiduciary or other duties owed by any director, officer, or shareholder of the Company to the Company or the Company’s shareholders). |
To the fullest extent permitted by applicable laws, unless our board of directors consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. Notwithstanding the foregoing, we note that holders of our Class A Ordinary Shares cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a result, the exclusive jurisdiction provision will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the Securities Act or the Exchange Act, or the respective rules and regulations promulgated thereunder.
Although we believe this provision benefits us by providing consistency in the application of BVI law in the types of lawsuits to which it applies, the provision may impose additional litigation costs on shareholders in pursuing such claims, particularly if the shareholders do not reside in or near the BVI. Additionally, the provision may limit our shareholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, or employees, which may discourage the filing of such lawsuits. The courts of the BVI may also reach different judgment or results than would other courts, including courts where a shareholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our shareholders. Alternatively, if a court were to find the exclusive jurisdiction provision contained in our M&A to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
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Our board of directors may decline to register transfers of Ordinary Shares in certain circumstances.
Our board of directors may, in its sole discretion, decline to register any transfer of any Class B Ordinary Share for any reason. The directors must state the reason for their refusal in a resolution of directors, and the Company must as soon as practicable, send each of the transferor and transferee a notice of refusal. Class A Ordinary Shares listed on the Nasdaq Capital Market, may be transferred without the need for a written instrument of transfer if the transfer is carried out in accordance with the laws, rules, procedures and other requirements applicable to shares listed on Nasdaq (including, but not limited to, the applicable Nasdaq listing rules). The transfer of a share is only effective once the name of the transferee is entered in the register of shareholders.
If our directors refuse to register a transfer they must state the reason for their refusal in a resolution of directors and the Company must, as soon as practicable, send to each of the transferor and the transferee notice of such refusal.
This, however, is unlikely to affect market transactions of the Class A Ordinary Shares purchased by investors in the public market. Our Class A Ordinary Shares are listed on the Nasdaq Capital Market, and the legal title to such Class A Ordinary Shares and the registration details of those Class A Ordinary Shares in the Company’s register of members remain with the Depository Trust Company. All market transactions with respect to those Class A Ordinary Shares are carried out without the need for any kind of registration by the directors, as the market transactions are all conducted through the Depository Trust Company systems.
Because we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Class A Ordinary Shares.
For as long as we remain an “emerging growth company,” as defined in the JOBS Act, we will elect to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of shareholder approval of any golden parachute payments not previously approved. Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of more mature companies. If some investors find our Class A Ordinary Shares less attractive as a result, there may be a less active trading market for our Class A Ordinary Shares and our share price may be more volatile.
You may have difficulty enforcing judgments against us.
We are incorporated under the laws of the BVI as a business company limited by shares. Currently, all of our operations are conducted in Malaysia, and almost all of our assets are and will be located outside of the United States. In addition, almost all of our officers and directors are nationals and residents of a country other than the United States, and almost all of their assets are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe we have violated your rights, either under United States federal or state securities laws or otherwise, or if you have a claim against us. Even if you are successful in bringing an action of this kind, the laws of the BVI and of Malaysia may not allow you to enforce a judgment against our assets or the assets of our directors and officers.
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The laws of the BVI may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.
Our corporate affairs are governed by our M&A, by the BVI Act and the common law of the BVI. The rights of shareholders to take action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under BVI law are to a large extent governed by the common law of the BVI. The common law in the BVI is derived in part from comparatively limited judicial precedent in the BVI and from English common law. For example, under the rule established in the English case known as Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors subject to a number of limited exceptions. Decisions of the Privy Council (which is the final Court of Appeal for British overseas territories such as the BVI) are binding on a court in the BVI. Decisions of the English courts, and particularly the Supreme Court and the Court of Appeal are generally of persuasive authority but are not binding in the courts of the BVI. Decisions of courts in other Commonwealth jurisdictions are similarly of persuasive but not binding authority. The rights of our shareholders and the fiduciary responsibilities of our directors under BVI law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the BVI has a less developed body of securities laws relative to the United States. Therefore, our public shareholders may have more difficulty protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.
You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.
The BVI law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. These rights, however, may be provided in a company’s M&A. Our M&A allow our shareholders holding shares which carry in aggregate not less than 30 per cent of all votes attaching to all of our issued and outstanding shares, to requisition a general meeting of our shareholders, in which case our chairman or a majority of our directors are obliged to call such meeting. Advance notice of at least seven calendar days is required for the convening of any general meeting of our shareholders. A quorum required for a meeting of shareholders consists of at least one shareholder, present in person or by proxy, holding shares which carry in aggregate not less than 33.3 percent of all votes attaching to all of our shares in issue and entitled to vote at such meeting. Unless our directors decide otherwise by a resolution of directors, a shareholder may not attend or vote (in person or by proxy) at any meeting of shareholders (or class of shareholders), or sign or consent to any written resolution of shareholders (or class of shareholders), in respect of any share held by the shareholder unless all calls and other sums currently payable by the shareholder to the Company in respect of the share have been paid in full.
Recently introduced economic substance legislation of the BVI may adversely impact us or our operations.
The BVI, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union (the “EU”) as to offshore structures engaged in certain activities which attract profits without real economic activity. With effect from January 1, 2019, the Economic Substance (Companies and Limited Partnerships) Act, 2018 (the “Substance Law”) came into force in the BVI introducing certain economic substance requirements for BVI “relevant entities” which are engaged in certain banking, insurance, fund management, financing and leasing, headquarters, shipping, holding company, intellectual property or distribution and service center business (being “relevant activities”) and are in receipt of gross income arising from relevant activities in any relevant financial period. In the case of business companies incorporated before January 1, 2019, the economic substance requirements apply for financial years commencing June 30, 2019.
The economic substance requirements that are imposed include that in-scope companies be directed and managed in the BVI, have core income generating activities in the BVI, and have an adequate level of employees, expenditures, and premises in the BVI. Business companies that carry on holding company business (which means it only holds equity participations in other entities and only earns dividends and capital gains) will be subject to reduced substance requirements.
Based on the Substance Law and announced guidance currently issued, we are currently subject to limited substance requirements applicable to a pure equity holding company. At present, we are only required to confirm we comply with the BVI Act and that we have adequate premises and employees in the BVI for passively holding or actively managing the equity participation, but to the extent we are required to increase our substance in the BVI due to any regulatory change, it could result in additional costs. Although it is presently anticipated that the Substance Law (including the ongoing EU review of the BVI’ implementation of such law), will have minimal material impact on us or our operations, as the legislation and guidance are new and remain subject to further clarification, adjustment, interpretation, and the EU review, it is not currently possible to ascertain the precise impact of these developments on us, for example, whether we could also be treated as carrying out “headquarter business” in the BVI (despite our headquarters physically being in Malaysia). It is therefore possible that we may be subject to additional requirements under the Substance Law in the future. Should that occur, it is our intention to seek appropriate advice and take appropriate steps to ensure that we (to the extent we fall within the scope of the Substance Law) are fully compliant.
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If we are classified as a passive foreign investment company (PFIC), United States taxpayers who own our Class A Ordinary Shares may have adverse United States federal income tax consequences.
A non-U.S. corporation such as ourselves 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 which produce passive income or which are held for the production of passive income is at least 50%. |
Passive income generally includes dividends, interest, rents and 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 Class A Ordinary Shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.
For the 2024 taxable year, we were not a PFIC. Depending on the amount of assets held for the production of passive income, it is possible that, for our future taxable years, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse US federal income tax consequences for US taxpayers who are shareholders. We will make this determination following the end of any particular tax year.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see “Item 10. Additional Information-E. Taxation-United States Federal Income Taxation-Passive Foreign Investment Company (“PFIC”) Consequences.”
Item 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
Corporate History and Structure
Founder Energy (Malaysia) was established on April 13, 2021, as a private company limited by shares organized under the laws of Malaysia. Founder Energy (Malaysia) holds 100% of the equity interests in the following entities: (i) Founder Assets, which was established in Malaysia on September 21, 2022, as a wholly owned subsidiary of Founder Energy (Malaysia); (ii) Founder Energy (Singapore), which was established in Singapore on May 27, 2022, as a wholly owned subsidiary of Founder Energy (Malaysia); and (iii) Founder Solar Solution, which was established in Malaysia on February 10, 2025, as a wholly owned subsidiary of Founder Energy (Malaysia). On February 24, 2023, Founder Assets issued 999,900 ordinary shares at RM1 per share to Founder Energy (Malaysia), for a total consideration of RM999,900, after which Founder Energy (Malaysia) holds 1,000,000 shares of Founder Assets in total, as its sole shareholder. Subsequently on January 21, 2025, Founder Assets issued 1,000,000 ordinary shares at RM1 per share to Founder Energy (Malaysia), for a total consideration of RM1,000,000, after which Founder Energy (Malaysia) holds 2,000,000 shares of Founder Assets in total, as its sole shareholder.
Founder Assets (Thailand) was established on January 14, 2025, as a private company limited by shares organized under the laws of Thailand, which is a 99.99%-owned subsidiary of Founder Group.
In connection with the IPO, we undertook a reorganization of our corporate structure (the “Reorganization”) in the following steps:
| ● | on May 18, 2023, we incorporated Founder Group as a BVI business company limited by shares incorporated and registered under the laws of the BVI; and |
| ● | on June 14, 2023, Founder Group acquired 100% of the equity interests in Founder Energy (Malaysia) from its original shareholders*. Consequently, Founder Group, through a restructuring which is accounted for as a reorganization of entities under common control, became the ultimate holding company of all other entities mentioned above. |
| * | Founder Energy (Malaysia) was established on April 13, 2021, with Lee Seng Chi being the sole shareholder. On September 8, 2021, Lee Seng Chi transferred 663,000 shares, representing 51% of the equity interests in Founder Energy (Malaysia), to Reservoir Link Energy Bhd. On June 14, 2023, Founder Group acquired 100% of the equity interests in Founder Energy (Malaysia) from its then shareholders, Lee Seng Chi (49% shareholder) and Reservoir Link Energy Bhd. (51% shareholder). |
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On January 14, 2025, we established a new subsidiary, Founder Assets (Thailand) Company Limited, in Thailand, which is 99% owned by the Company, 0.5% owned by Lee Seng Chi, our Chief Executive Officer and 0.5% owned by See Sian Seong, our Chief Financial Officer. Founder Assets (Thailand) Company Limited primarily engages in investment in renewable energy assets at Thailand.
On February 10, 2025, our wholly owned subsidiary, Founder Energy (Malaysia), established a new wholly owned subsidiary, Founder Solar Solution Sdn Bhd., in Malaysia. Founder Solar Solution Sdn Bhd. primarily engages in providing EPCC services for residential solar projects.
On November 18, 2025, we established Founder Capital LLC (“Founder Capital”) in State of Utah, which is wholly owned by the Company. Founder Capital was established for the December 2025 Private Placement (as defined below). For details of the December 2025 Private Placement, please see “- December 2025 Private Placement.”
On 20 January, 2026, the Company invested in Nichcom Go Sdn Bhd, by way of acquiring 19.90% equity interest in Nichcom Go Sdn Bhd. Nichcom Go Sdn Bhd , primarily engages in providing services in relation to electric vehicles charging facilities.
The following chart illustrates our corporate structure as of the date of this annual report.
| * | Reservoir Link Energy Bhd. is ultimately controlled by its board of directors. See Note 2 under “Principal Shareholders.” |
| * | As required by local regulation in Thailand, balance of 0.00002% shareholding is owned by management, Lee Seng Chi and See Sian Seong equally. |
| * | Reservoir Link Energy Bhd. is ultimately controlled by its board of directors. See Note 2 under “Principal Shareholders.” |
| * | As required by local regulation in Thailand, balance of 0.00002% shareholding is owned by management, Lee Seng Chi and See Sian Seong equally. |
Recent Developments
Establishment of New Subsidiaries
On January 14, 2025, we established a new subsidiary, Founder Assets (Thailand) Company Limited, in Thailand, which is 99% owned by the Company and 1% owned by Lee Seng Chi and See Sian Seong equally. Founder Assets (Thailand) Company Limited primarily engages in investment in renewable energy assets at Thailand. On February 10, 2025, our wholly owned subsidiary, Founder Energy (Malaysia), established a new wholly owned subsidiary Founder Solar Solution Sdn Bhd. in Malaysia. Founder Solar Solution Sdn Bhd. primarily engages in providing EPCC services for residential solar projects.
Entry and Termination of Securities Purchase Agreement with Streeterville Capital, LLC
On March 13, 2025, the Company entered into a securities purchase agreement (the “SPA”) with Streeterville Capital, LLC, a Utah limited liability company (the “Purchaser,” and collectively with the Company, the “Parties”). Pursuant to the SPA, the Purchaser agreed to purchase from the Company, and the Company agreed to issue and sell to the Purchaser, securities in the form of one or more pre-paid purchases (each, a “Pre-Paid Purchase” and collectively, the “Pre-Paid Purchases”) with an aggregate purchase amount of up to $10,000,000, for the purchase of Class A Ordinary Shares, upon the terms and subject to the limitations and conditions set forth in such Pre-Paid Purchase. On March 14, 2025, the Company issued 1,850,000 Class A Ordinary Shares, or 18,500 Class A Ordinary Shares after reflecting the Share Combination, to the Purchaser as a commitment fee for the Pre-Paid Purchase facility.
On April 8, 2025, the Company and the Purchaser entered into a letter agreement (the “Letter Agreement”), pursuant to which the SPA was terminated. According to the Letter Agreement, on April 11, 2025, the Purchaser received $1,250,000 (the “Rescission Purchase Price”) from the Company, and on April 21, 2025, the Company’s transfer agent returned the 1,850,000 Class A Ordinary Shares or 18,500 Class A Ordinary Shares after reflecting the Share Combination previously issued to the Purchaser back to the Company. As such, the Transaction Documents (as defined in the SPA) and all of the transactions contemplated thereby have been rescinded ab initio, and shall be of no further force or effect, as a result of which the Transaction Documents shall be deemed not to have occurred (the “Rescission”). The Rescission has placed each of the Parties in the same respective position that each was in prior to the execution of the Transaction Documents.
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April 2025 Private Placement
On April 22, 2025, the Company entered into a Securities Purchase Agreement with AVONDALE CAPITAL, LLC, a Utah limited liability company (“AVONDALE”), pursuant to which AVONDALE agreed to purchase from the Company, during a period of two (2) years, one or more pre-paid purchases in the aggregate purchase amount of up to $10,000,000.00 for the purchase of the Company’s then-existing ordinary shares (now designated as Class A Ordinary Shares) (the “April 2025 Private Placement”). In connection with the April 2025 Private Placement, the Company entered into a registration rights agreement, pursuant to which the Company agreed to register resale of all registrable securities issued in the April 2025 Private Placement.
On May 23, 2025, the SEC declared effective a registration statement on Form F-1 filed by the Company to register up to 11,750,000 Class A Ordinary Shares, or 117,500 Class A Ordinary Shares after reflecting the Share Combination, which were issuable to AVONDALE in connection with the April 2025 Private Placement (the “May 2025 Form F-1”).
As of the date of this annual report, AVONDALE has made 17 pre-paid purchases in the aggregate purchase amount of $5,500,000 under the April 2025 Private Placement. AVONDALE has exercised its right to purchase the Company’s Class A Ordinary Shares under those 17 pre-paid purchases in full, as a result of which AVONDALE acquired 19,606,820 Class A Ordinary Shares of the Company, or 196,068 Class A Ordinary Shares after reflecting the Share Combination.
Adoption of Dual Class Structure
On July 8, 2025, at the 2025 extraordinary general meeting, to implement a dual class structure, our shareholders approved a resolution to amend and restate the Company’s then-effective Memorandum and Articles of Association to reflect the revised authorized share structure of the Company and the terms of the Class A Ordinary Shares and Class B Ordinary Shares. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights and privileges except for voting and conversion rights. In respect of all matters subject to vote by way of poll at general meetings of the Company, each holder of Class A Ordinary Shares will be entitled to one (1) vote per one (1) Class A Ordinary Share and each holder of Class B Ordinary Shares will be entitled to 20 votes per one (1) Class B Ordinary Share. Class B Ordinary Shares are automatically convertible into Class A Ordinary Shares where any Class B Ordinary Share is the subject of any sale, transfer, assignment, or disposal of a legal, beneficial or other interest in that Class B Ordinary Share to a holder that is not a holder of Class B Ordinary Shares nor is a Permitted Transferee, or a person who ceases to be a Permitted Transferee, in which each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share. The creation of any pledge, charge, encumbrance or third party right over any Class B Ordinary Share to secure contractual or legal obligations of a holder of Class B Ordinary Shares shall not be deemed as a sale transfer, assignment or disposition unless such pledge, charge, encumbrance or third party right is enforced and it results in a third party holding legal title to the Class B Ordinary Share, in which case the Class B Ordinary Share will automatically convert to a Class A Ordinary Share. Class B Ordinary Shares are convertible voluntarily at any time after issuance at the option of the holder, upon 10 business days’ prior written notice to the Company, in which each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share. Additionally, on the written request of the shareholder, the Company has the right at its discretion to automatically convert each one (1) Class A Ordinary Share into one (1) Class B Ordinary Share, in which each one (1) Class A Ordinary Share is convertible into one (1) Class B Ordinary Share and/or each one (1) Class B Ordinary Share into one (1) Class A Ordinary Share in which, each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share.
December 2025 Private Placement
On December 11, 2025, the Company entered into entered into the Purchase Agreement with Streeterville Capital, LLC (the “Selling Shareholder”). Pursuant to the Purchase Agreement, the Selling Shareholder agreed to purchase from the Company, and the Company agreed to issue and sell to the Selling Shareholder, a secured convertible promissory note (the “Note”) in the original principal amount of $16,070,000, which included an original issue discount of $1,050,000 and transaction expenses amount of $20,000, and carried a simple interest rate of six percent (6%) per annum (the “December 2025 Private Placement”). The Note matures on December 11, 2026, one year from the date of issuance. The Note is convertible into the Company’s Class A Ordinary Shares at the conversion price equal to 82.5% of the lowest daily volume weighted average price during ten consecutive trading days immediately preceding the applicable measurement date. In the event that the conversion price is lower than $6.874, the Selling Shareholder has the right to have the applicable conversion amount paid in cash rather than conversion shares. On December 11, 2025, the Company issued the Note to the Selling Shareholder and the transaction was consummated.
At the closing, the Selling Shareholder paid $3,000,000 of the Purchase Price to the Company and $12,000,000 of the Purchase Price into a deposit account (the “Deposit Account”) of the Company’s wholly-owned subsidiary, Founder Capital, LLC, a Utah limited liability company (“Founder Capital”). Founder Capital entered into a Deposit Account Control Agreement (the “DACA”) with the Selling Shareholder and Lakeside Bank, an Illinois banking corporation, to secure the Note. As a collateral for the Note, after the filing of the registration statement on Form F-1 on February 25, 2026, the Company will maintain a minimum cash balance in the Deposit Account equal to the lesser of (i) $11,000,000 and (ii) eighty percent (80%) of the then-outstanding principal balance of the Note. In addition to the DACA, the Company’s obligations under the Note are also secured by: (i) a Guaranty from Founder Capital (the “Guaranty”) and (ii) a pledge of the equity interests in Founder Capital pursuant to a Pledge Agreement (the “Pledge Agreement”) by the Company pledging 100% of the equity interests in Founder Capital.
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Increase of Share Capital of the Subsidiary in Thailand
On January 22, 2026, Founder Assets (Thailand) Co Ltd, our subsidiary in Thailand, increases its share capital from THB 2,000,000 to THB 25,000,000. Founder Group Limited will contribute all the incremental share capital.
Share Combination
The authorised, issued, and outstanding shares of the Company were combined on a 100 for 1 ratio (the “Share Combination”) with the marketplace effective date of February 10, 2026. The objective of the Share Combination is to enable the Company to regain compliance with Nasdaq Marketplace Rule 5550(a)(2) and maintain its listing on Nasdaq. Beginning with the opening of trading on February 10, 2026, the Company’s Class A Ordinary Shares traded on the Nasdaq Capital Market on an adjusted basis, under the same symbol “FGL” but under a new CUSIP number, G3662E121. As a result of the Share Combination, each 100 Ordinary Shares outstanding will automatically combine and convert to one issued and outstanding Ordinary Share without any action on the part of the shareholders. Each shareholder who holds fractional shares following, and as a result of, the Share Combination, will be issued with such bonus shares as is necessary to ensure that their shareholding is rounded up to the nearest whole number.
Corporate Information
Our principal executive office is located at No. 17, Jalan Astana 1D, Bandar Bukit Raja, 41050 Klang, Selangor Darul Ehsan, Malaysia, and our phone number is +603-3358 5638. Our registered office in the BVI is located at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, BVI. We maintain a corporate website at https://www.founderenergy.com.my. The information contained in, or accessible from, our website or any other website does not constitute a part of this annual report. Our agent for service of process in the United States is Cogency Global Inc.
B. Business Overview
Overview
We are a dedicated solar solutions provider in Malaysia, offering end-to-end services for commercial and industrial sectors, as well as large-scale solar power projects, encompassing project design, engineering, and comprehensive project management. Our primary focus is on two key segments: large-scale solar projects and commercial and industrial (C&I) solar projects.
Large-scale solar projects are utility scale solar PV power plants with installed generating capacity of 1 MWac or more. Large-scale solar projects are ground mounted and are designed to supply power to the power grid. For the majority of our large-scale solar projects, we usually act as the contractor to the project awarder, who is the main contractor for a solar project. As an EPCC provider, we assume most of the responsibility for the entire project lifecycle, from design and engineering to material procurement, construction, installation, integration, and commissioning. After the acceptance of our projects by our clients, we provide performance warranty during the defect liability period, which is typically 24 months. See “Item 4. Information on the Company-B. Business Overview - Our Services-Project Flow - Post-completion-Warranties and defect liabilities.” Our goal is to ensure seamless project execution, adhering to the highest industry standards and delivering optimal performance and reliability. For the fiscal years ended December 31, 2023, 2024, and 2025, our revenue generated from large-scale solar projects services was RM131,988,574 (approximately US$28,746,286), RM68,864,991 (approximately US$15,387,105), and RM73,706,601 (approximately US$18,149,866), respectively, accounting for 89%, 76% and 61% of our total revenue for the respective years.
C&I projects are smaller scale solar projects where the solar PV systems are installed on rooftops and are designed to generate electricity for commercial and industrial properties for their own consumption, such as factories, warehouses and commercial stores. For C&I projects, we usually sign a service contract with the project owner and act as the main contractor. As the main contractor, we engage in comprehensive services encompassing project design, engineering, equipment procurement, construction, and commissioning. The C&I projects also come with a 24 month defect liability period and we provide performance warranty during this period. We ensure that our C&I projects are customized to meet the unique energy needs of each customer, providing them with efficient and sustainable solar solutions. For the fiscal years ended December 31, 2025, 2024, and 2023, our revenue generated from C&I projects was RM46,991,009 (approximately US$11,571,290), RM21,479,597 (approximately US$4,799,374), and RM16,065,399 (approximately US$3,498,944), respectively, accounting for approximately 39%, 24%, and 11% of our total revenue for the respective years.
Additionally, we offer operation and maintenance (“O&M”) services to our clients to ensure that the power plant and the solar PV system operate safely and continuously at its optimum capacity and historically have derived little revenue from these services.
In the fiscal years ended December 31, 2023, 2024, and 2025, our total revenue was RM148,053,973 (approximately US$32,245,230), RM90,344,588 (approximately US$20,186,479), and RM120,697,610 (approximately US$29,721,156), respectively, representing a negative growth rate of 39% from fiscal year 2023 to fiscal year 2024, and a growth rate of 33.6% from fiscal year 2024 to fiscal year 2025. For the same fiscal years, our net income was RM7,147,068 (approximately US$1,556,586), net loss of RM5,150,005 (approximately US$1,150,711) and net loss of RM7,275,141 (approximately US$1,791,465) , respectively, representing a negative growth rate of 172% from fiscal year 2023 to fiscal year 2024, and a negative growth rate of 41% from fiscal year 2024 to fiscal year 2025.
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Our Competitive Strengths
We believe the following competitive strengths are essential for our success and differentiate us from our competitors:
Excellent Track Records and Reputation
We are a dedicated solar solutions provider in Malaysia, offering end-to-end services for commercial and industrial sectors, as well as large-scale solar power projects, encompassing project design, engineering, and comprehensive project management. Since 2021, we have successfully delivered over 700 Megawatt peak (MWp) solar power plants in Malaysia and have generated total revenue of approximately RM538 million (approximately US$132 million) as of December 2025. Thorough market diligence and strong relationships with suppliers, subcontractors, and financial institutions enable us to identify and pursue opportunities efficiently. Our internal processes, including supply chain management, project control, risk management, and quality monitoring, ensure seamless project execution. Our established networks and in-house engineering team provide us with a competitive edge, allowing us to secure bids and earn repeat orders.
We place great importance on our track record and market reputation, as they serve as strong indicators of our capabilities. We take pride in completing projects on time, with no claims of late completion as of the date of this annual report. Furthermore, we believe in the strong performance of our solar PV systems and power plants as we have not received any customers claims for the fiscal years ended December 31, 2023, 2024, and 2025, up to the date of this annual report. This underscores our commitment to delivering high-quality services and maintaining a strong market presence in the solar industry.
Proven Financial Performance
We have demonstrated proven financial performance and our revenue has decreased from approximately RM148,053,973 (approximately US$32,245,230) in fiscal year 2023 to approximately RM90,344,588 (approximately US$20,186,479) in fiscal year 2024, representing a decrease by 39%, and grown from approximately RM90,344,588 (approximately US$20,186,479) in fiscal year 2024 to approximately RM120,697,610 (approximately US$29,721,156) in fiscal year 2025, representing an increase by 33.6%. The loss was primarily due to a delay in the implementation of large-scale solar projects in 2024; however, most of these projects have resumed in 2025. The Company has maintained overhead costs to capitalize on future opportunities. Our net income has decreased from approximately RM7,147,068 (approximately US$1,556,586) in fiscal year 2023 to net loss of approximately RM5,150,005 (approximately US$1,150,711) in fiscal year 2024, representing a decrease by 172%, and grown from approximately RM5,150,005 (approximately US$1,150,711) in fiscal year 2024 to net loss approximately RM7,275,141 (approximately US$1,791,465) in fiscal year 2025, representing a decrease by 41%. We believe our strong growth and financial performance are attributed to our focus on risk management and reliance on clearly defined internal processes to manage our business. Furthermore, we have the ability to provide our customers with an extended credit term of up to 90 days, surpassing the typical 7-day offering by other solar industry providers.
A Dedicated Design and Engineering Team
Our operations are supported by a design and engineering team composed of six employees that is responsible for designing innovative and cost-effective solutions with an aim to increase the performance ratio of solar power projects. Our design and engineering team is engaged on our projects from the pre-bid stage through commissioning. At the pre-bid stage, our design and engineering team evaluate and provide innovative design solutions for each potential solar power project. Once we win the bid, they work with our project execution team to implement the designs and overcome challenges through design solutions. We believe that our design and engineering solutions, coupled with robust quality compliance checks and compliance tests on solar equipment, have helped us achieve contractually agreed performance ratio for the solar power projects we construct. In addition, our engineering team consists of engineers from multiple disciplines, including civil, mechanical and electrical, and is able to provide holistic solutions to our customers. This sets us apart from competitors who often specialize in a single engineering discipline.
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An Experienced Management Team
Our management team, comprising our directors and executive officers, has played a very important role in promoting our growth in the past years and is expected to continue to do so in the future. We are led by a management team with extensive experience in the solar industry, deep understanding of project management and a proven track record of performance. Mr. Lee Seng Chi, our Director and Chief Executive Officer, has over 12 years of experience in the solar industry and held senior leadership positions in multiple engineering companies before he founded Founder Energy in 2021. Benefitting from the extensive experience of the management team, their strong relationships with our customers, and their strategy to focus on key markets for opportunities, we have been able to expand our market shares in Malaysia.
Our Growth Strategies
We intend to develop our business and strengthen brand loyalty by implementing the following strategies:
Expand Our Workforce.
As a solar facility installation company, we recognize the increasing demand for solar projects in the coming years. To effectively cope with this anticipated growth, one of our key strategies is to expand our workforce. To address increased demand, we plan to augment our workforce by recruiting skilled professionals with expertise in solar installation, project management, engineering, and maintenance. By expanding our team, we ensure that we have the necessary human capital to handle multiple projects simultaneously, maintain high-quality standards, and meet project deadlines efficiently. Additionally, we prioritize ongoing training and development programs to enhance the skills and knowledge of our existing workforce, ensuring they stay up-to-date with the latest advancements in solar technology and industry best practices.
In addition to internal resources, we also seek to establish strategic partnerships and collaborations with reputable contractors in the solar industry. By leveraging these external contractors, we can effectively scale our operations and meet the increased demand for solar projects. These partnerships enable us to access additional specialized expertise, equipment, and manpower when required, allowing us to take on larger and more complex projects with confidence.
Expand Our Investment in Renewable Energy Assets, Such as Solar PV Systems.
We believe expanding our investment in renewable energy assets, such as solar PV systems, will enable us to generate consistent recurring income for our Company. By investing in renewable energy assets, we diversify our revenue streams and reduce reliance solely on project-based installations. These assets provide a stable source of income through long-term power purchase agreements or feed-in tariffs, ensuring a predictable cash flow for our Company. Expanding our investment in renewable energy assets also aligns with our commitment to sustainability and the transition towards clean energy sources. By increasing our ownership of renewable energy projects, we contribute to the growth of the renewable energy sector and support the global shift towards a greener future.
Furthermore, investing in renewable energy assets allows us to leverage our industry expertise and capitalize on our knowledge of solar facility installation. We can apply our experience in selecting, developing, and managing these assets efficiently, maximizing their performance and profitability. In February 2023, our subsidiary Founder Assets entered into a deed of novation with another two Malaysian entities, party A and party B, whereby Founder Assets accepted the novation of all of party A’s rights, interests, obligations and liabilities under a power purchase agreement between party A and party B (the “PPA”). Under the PPA, party A agreed to develop, design, install, construct, own, operate and maintain a solar PV and party B agreed to purchase power generated from that solar PV system, for a term of 20 years. As of the date of this annual report, the project has been fully completed and is operating in compliance with all applicable laws. This marks a significant and pivotal step in our strategy to invest in renewable energy assets. However, as of the date of this annual report, Founder Assets has not yet received approval from the Energy Commission of Malaysia, and the Company is actively in the process of seeking written approval from the Energy Commission of Malaysia concerning changes in shareholding structure resulting from Founder Group’s IPO. See “Item 3. Key Information-D. Risk Factors-Risks Related to Our Business and Industry-If our subsidiary Founder Assets fails to secure approval from the Energy Commission of Malaysia, its business operations could be materially and adversely affected.”
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Expand Our Business from Malaysia to Other Countries in the Southeast Asia region.
We recognize the significant untapped potential for solar energy in the Southeast Asia. Our strategy entails expanding our business presence in the region, with a specific focus on countries such as Vietnam and the Philippines. We plan to establish our presence in the Vietnam and the Philippines markets in the next two years. We firmly believe that the market opportunity for large-scale solar, commercial and industrial (C&I), and residential solar services remains substantially untapped in Southeast Asia. To capitalize on this potential, we plan to strengthen our existing client relationships while actively seeking out new clients to accelerate our growth trajectory. Given the increasing demand for renewable energy and the supportive regulatory policies promoting solar energy as a cost-effective alternative to traditional electric utilities, we are strategically positioned to enter new markets in the near future. Singapore, Indonesia, and the Philippines are particularly attractive due to their high demand for sustainable energy solutions and conducive business environments.
By expanding our geographical footprint in Southeast Asia, we aim to seize the abundant growth opportunities in solar installation and contribute to the region’s renewable energy transition. Through our expertise, quality services, and strong client relationships, we believe we are well-positioned to establish ourselves as a trusted and reliable provider of solar solutions in these expanding markets.
Offer EPCC Services to Other Types of Renewable Energy, Such as Hydropower and Biogas.
Expanding our EPCC services to encompass other types of renewable energy, namely hydropower and biogas, is a strategic progression that capitalizes on our established expertise and solid reputation in the solar industry. Hydropower is a renewable energy method that generates electricity by harnessing the kinetic energy of flowing water through dams or rivers. Biogas, on the other hand, is produced by the anaerobic decomposition of organic matter, like agricultural waste or sewage, and can be used as a clean fuel. As the global movement towards sustainable energy gains momentum, we are determined to seize opportunities and further enhance our position in the renewable energy sector.
In line with this vision, we plan to venture into the hydroelectric power sector, which involves designing and constructing facilities that generate electricity from the power of moving water. Additionally, we plan to expand into the biogas sector, focusing on the utilization of agricultural waste to generate electricity through the harvesting of biogas. By diversifying our offerings, we intend to tap into new avenues of growth and extend our reach within the renewable energy landscape. We plan to kickstart these initiatives in the fourth quarter of 2026, showcasing our commitment to meeting the evolving needs of the renewable energy market. This strategic expansion aligns with our mission to contribute to the global transition towards clean and sustainable energy sources. We are excited to embark on these ventures, leveraging our existing strengths and fostering innovation in renewable energy construction to drive further success and make a positive impact on the future of energy.
Our Business Model
We currently generate revenue from the following principal sources:
| ● | Large-scale Solar Project Services. We generate a significant portion of our revenue by providing comprehensive EPCC services for large-scale solar projects. These projects involve utility-scale solar PV power plants with an installed generating capacity of at least 1 MWac. The electricity generated from these projects is supplied to the power grid and sold to local utility company. |
| ● | C&I Project Services. We also generate revenue by offering EPCC services for C&I solar projects. These projects involve smaller power generating facilities. The electricity generated from C&I projects primarily serves the customers’ own consumption, with any surplus supplied to the power grid. Typically, these solar systems are installed on the rooftops of commercial and industrial buildings. We provide end-to-end solutions for C&I projects, catering to the specific requirements of our customers in this sector. |
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The following table presents our revenue and gross profit for the fiscal years ended December 31, 2023, 2024, and 2025. See also “Item 5. Operating and Financial Review and Prospects-A. Operating Results.”
| Revenue | ||||||||||||||||
| Fiscal Years Ended December 31, | ||||||||||||||||
| 2023 | 2024 | 2025 | 2025 | |||||||||||||
| RM | RM | RM | USD | |||||||||||||
| Large-scale Solar Project Services | RM | 131,988,574 | RM | 68,864,991 | RM | 73,706,601 | $ | 18,149,866 | ||||||||
| C&I Project Services | RM | 16,065,399 | RM | 21,479,597 | RM | 46,991,009 | $ | 11,571,290 | ||||||||
| Total | RM | 148,053,973 | RM | 90,344,588 | RM | 120,697,610 | $ | 29,721,156 | ||||||||
| Gross Profit | ||||||||||||||||
| Fiscal Years Ended December 31, | ||||||||||||||||
| 2023 | 2024 | 2025 | 2025 | |||||||||||||
| Large-scale Solar Project Services | RM | 15,823,226 | RM | 3,455,338 | RM | 8,176,544 | $ | 2,013,432 | ||||||||
| C&I Project Services | RM | 2,029,721 | RM | 2,787,132 | RM | 5,801,555 | $ | 1,428,602 | ||||||||
| Total | RM | 17,852,947 | RM | 6,242,470 | RM | 13,978,099 | $ | 3,442,034 | ||||||||
Our Services
Overview
We are principally engaged in providing EPCC services for large-scale solar projects and C&I projects. Both large-scale solar projects and the C&I projects are connected to the power grid.
A Typical Large-Scale Solar System
As a provider of EPCC services for large-scale solar projects and C&I projects, our scope of work mainly comprises the following:
| ● | Engineering and design, from initial conceptualization up to detailed system design. This includes designing the solar PV array and balance of system, including inverters, transformers and interconnection to the power grid where relevant; |
| ● | Procurement of all construction materials and equipment for the solar PV facilities, including solar PV modules and balance of systems; |
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| ● | Construction, including civil, structural, mechanical and electrical works, installation and integration of equipment, and interconnection to the power grid, if required by the clients; and |
| ● | Commissioning, including testing of individual equipment and systems, and testing of the newly installed solar PV facilities. |
For a detailed discussion on the scope of work of our EPCC services, please refer to “-Project Flow” below.
Process Flow
The general process flow of our large-scale solar projects and C&I projects is depicted in the diagram below:
Tender and Project Preliminaries
Most of our projects are obtained through a competitive tendering process. Once we receive a tender from clients, we promptly initiate site visits to assess the actual site conditions and determine the most suitable installation methods. We then diligently prepare and present our clients with preliminary engineering designs, encompassing detailed engineering drawings, project schedules, and competitive tender prices.
Project Planning
Upon securing a letter of award or contract and taking possession of the site, we will conduct site survey and commence detailed engineering design and project planning to ensure we meet the project milestones that are stipulated in the letter of award or the contract.
Simultaneously, we proactively engage with local authorities to secure the required licenses and permits essential for the construction work. Additionally, we ensure the procurement of necessary insurance coverage, including Contractor All-risk insurance for all of our projects, and Comprehensive General Liability and Workmen Compensation insurance, if so required, to mitigate potential risks during project execution.
Engineering design and planning
In the engineering design and planning phase, we typically expand our preliminary engineering design to provide a detailed design together with construction drawings and specifications and method of statements, which outlines the step-by-step procedures and methodology to be followed for executing the solar project. The construction drawings cover the following aspects:
| ● | Detailed layout of solar PV module configuration into array including string and module grouping, orientation and inclination of solar PV modules, row spacing, cabling and wiring, sizing of nominal power ratio, as well as inverter and grid interconnection design. For example, the mounting system is key in optimizing the orientation of the solar PV modules as it affects the energy yield generated by placing the solar PV modules to obtain the optimum amount of sunlight throughout the year. |
| ● | Direct current (“DC”) system design takes into consideration the selection and sizing of equipment such as connectors, combiner boxes, distribution boards, as well as the lengths and sizes of cables. |
| ● | Alternating current (“AC”) system design takes into consideration the inverters output to the interconnection and metering point. This also includes selection of transformers, interconnection schematic designs, and lengths and sizes of cables. |
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As for large-scale solar projects, we also undertake project planning and scheduling taking into consideration the following aspects:
| ● | Infrastructure planning which covers access roads and internal pathways, boundary of the plant, levelling and grading, storm water drainage, water supply and storage system, cabling routes and location of substation, and others including security and surveillance systems, and firefighting system. |
| ● | Structural and civil engineering relating to foundation design for mounting system, construction of structures to house inverters, transformers and related electrical equipment, and control room. |
Procurement
Once the detailed engineering design and specifications are completed, we commence procurement of all required equipment as well as construction materials from third-party suppliers. We are responsible for procuring the following equipment:
| ● | Solar PV modules; and |
| ● | Balance of system such as mounting systems, inverters, transformers, switchgears, electrical distribution, protection and control devices, cables, SCADA system and interconnection equipment. (SCADA system refers to supervisory control and data acquisition, a centralized computer system that obtains real time information on the operations of plant, systems and equipment for the purpose of monitoring and controlling the operations.) |
For large-scale solar projects, our clients can choose to source and procure the equipment and construction materials by themselves, while for C&I projects, we are usually responsible for all the equipment and materials. We will ensure that the key equipment and products pass the factory acceptance test at the manufacturer’s facilities before they are delivered to our project sites. In addition, at this stage, we will also select and engage subcontractors to carry out the physical construction and installation works. For a single large-scale solar project, we usually engage several subcontractors, whereas a C&I project usually just requires one or two subcontractors.
Project execution
The project execution phase mainly involves construction, installation and integration works, testing and commissioning.
Construction, installation and integration
The physical construction and installation works are carried out by subcontractors that we have selected. We are mainly involved in project management, site supervision, quality and safety assurance and monitoring the construction, installation and integration process for large-scale solar projects and C&I projects where applicable. This is to ensure that work carried out by subcontractors are in line with our design and technical specifications as well as project timeline and meet the relevant standards and regulatory compliance. In this respect, we outsource the following subcontracted works:
| ● | Earthwork, Civil and structural works on the site for large-scale solar projects including site preparation such as levelling and soil compaction, construction of access roads and pathways, drainage system, cable ducts and trenches, and perimeter fencing, as well as piling and foundation works for the mounting system; |
| ● | Building works for large-scale solar projects including construction of control rooms and other structures to house or support the inverters and transformer; |
| ● | Mechanical works including construction of mounting system and assembly of metal-based support structure; and |
| ● | Electrical and communication works including: |
| ● | Solar PV module assembly and connection to balance of system including SCADA system; |
| ● | DC and AC cabling; |
| ● | Installation of earthing and lightning protection systems; |
| ● | Installation of inverters and related electrical equipment such as distribution control and protection systems; |
| ● | Installation of security and monitoring systems; and |
| ● | Installation of communication systems for internal and remote control and monitoring systems. |
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As for the interconnection to the nearest power grid substation for large-scale solar projects, we engage subcontractors to perform the physical construction of the substation and installation including laying of cables. This will be based on our design and technical specifications. To interconnect to the power grid substation, we commonly have to procure and install switchgears and transformers, SCADA system, grid interface devices, and low/medium voltage power cables. During this process, we, together with project awarders, will liaise directly with TNB to ensure that the interconnection facilities meet the requirements of the grid connection point.
Testing and commissioning
System checking and inspection: Upon the completion of installation and integration of solar PV modules and balance of system, we will facilitate system checking and inspection on the installation against the as-built documents, as well as inspection and testing of the solar PV modules and the balance of system such as functional tests of inverters.
Testing and commissioning: Upon the completion of system checking and inspection, we will commence system testing and commissioning for the initial operation date which is the date where electricity output is first generated and derived from the facility to the power grid, followed by verification for commercial operation date (“COD”).
As part of our testing and commissioning process, we carry out various tests in compliance with the following:
| ● | “Procedure for Testing and Commissioning of Grid Connected Photovoltaic System in Malaysia” by Sustainable Energy Development Authority Malaysia; and |
| ● | Testing and commissioning work as set out under the “Guidelines on Large Scale solar Photovoltaic Plant for Connection to Electricity Networks” by the Energy Commission Malaysia. |
For C&I projects, the testing results will be submitted to the local authority for verification, approval and issuance of solar system generating license.
For large-scale solar projects, we also liaise directly with relevant parties to notify them and TNB that the interconnection facilities are ready to be commissioned. Prior to that, our technical team will prepare the submission papers and furnish the relevant documentation to TNB.
Finally, we will make arrangement with an approved independent engineer by the Energy Commission of Malaysia together with our customer or plant owner, the Energy Commission Malaysia and TNB to witness the connection of solar PV power plant to the power grid. Some of the tests to be performed are as follows:
| ● | Inspection of the solar PV modules and inverters; |
| ● | Acceptance testing of the entire solar PV installation; |
| ● | Performance ratio test; and |
| ● | Power quality measurements to be captured at the connection point to ascertain the power quality before and after the commissioning. |
Upon completion of testing and commissioning, we will prepare the relevant final testing reports to the Energy Commission of Malaysia and TNB for the confirmation of COD. We will then handover the site to our customer.
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Post-completion
Warranties and defect liabilities
After the acceptance of our projects by our clients, the following types of warranties are offered:
| ● | Performance warranty on the large-scale solar projects and C&I projects. |
We provide performance warranty for the large-scale solar projects and C&I projects which is specified in the form of minimum performance ratio that can be achieved as stipulated in our EPCC contract during the defect liability period, which is typically 24 months. The performance ratio is a measurement of the efficiency of a solar PV system or power plant, indicated by the ratio of the actual solar PV energy output as compared to the theoretical output.
| ● | Performance warranty of solar PV modules. |
The solar PV module performance warranty is provided by the manufacturer of the solar PV modules.
| ● | Product warranty of certain main components. |
The product warranty of various main components of the solar PV facilities are provided by their respective manufacturers.
In addition, there is a defect liability period, which is typically 24 months after the acceptance of our EPCC works for solar systems and power plants, and we are responsible to make good and rectify any defects for our EPCC works during this period.
O&M services
In addition to the 24-month defect liability period, we also offer our clients operation and maintenance (“O&M”) services. We will enter into a separate O&M service agreement with our clients who opt for this additional service and the contract term is usually 1 year or more. The function of O&M services is to ensure that the power plant and the solar PV system operate safely and continuously at its optimum capacity. Part of our O&M activities include providing performance monitoring and evaluation of the solar PV power plant. We use a SCADA system to enable remote real time monitoring as well as collect operational and performance data. Optimization checks are also performed by comparing operational data collected against the theoretical performance of the installation as stated in the detailed design layout.
In order to minimize downtime or operational inefficiencies of a solar PV system or solar PV power plant due to equipment failure, we will carry out preventive maintenance as well as corrective maintenance. Preventive maintenance is scheduled maintenance that is carried out at pre-determined intervals to prevent system faults and equipment failures from occurring. Corrective maintenance is unscheduled maintenance that is carried out when there is an equipment or system failure. When such an event occurs, our technical team will identify and locate the cause of the failure and rectify the problem to bring the equipment or system back to normal operating conditions.
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Our Solar Projects
Completed solar projects
For the fiscal years ended December 31, 2023, 2024, and 2025, our material completed solar projects are as follows:
| Large-Scale Solar Projects | ||||||||||||||
| Project # |
Customer Name/Type |
Type of Facility |
Scope of Work | Location | Capacity (MWac) |
Contract Value (MYR Million) |
Start Date/ Completion Date | |||||||
| 1 | Customer A | Ground-mounted | Engineering, Construction and Commissioning | Perak, Malaysia | 10.95 | 14.90 | 03/11/2022 05/30/2023 | |||||||
| 2 | Customer B | Ground- mounted | Supply of PV Mounting Structure | Terengganu, Malaysia | 100.00 | 20.50 | 05/12/2021 12/07/2021 | |||||||
| 3 | Customer A | Ground- mounted | Supply of PV Mounting Structure | Kedah, Malaysia | 20.76 | 5.30 | 05/24/2022 09/30/2022 | |||||||
| 4 | Customer C | Ground- mounted | PV structure and module installation | Pinang, Malaysia | 10.00 | 1.00 | 06/15/2022 04/10/2023 | |||||||
| 5 | Customer D | Ground- mounted | Piling, Mechanical & Photovoltaic Installation Works | Perak, Malaysia | 100.00 | 2.77 | 04/14/2021 12/11/2022 | |||||||
| 6 | Customer A | Ground- mounted | Engineering, Procurement, Construction and Commissioning | Selangor, Malaysia | 13.00 | 10.18 | 08/24/2022 11/14/2023 | |||||||
| 7 | Customer G | Ground- mounted | Engineering, Construction and Commissioning | Perak, Malaysia | 25.00 | 16.75 | 09/06/2022 08/25/2023 | |||||||
| 8 | Customer F | Ground- mounted | Engineering, Procurement, Construction and Commissioning | Perak, Malaysia | 15.00 | 4.00 | 10/25/2022 03/31/2024 | |||||||
| 9 | Customer F | Ground- mounted | Engineering, Procurement, Construction and Commissioning | Perak, Malaysia | 10.00 | 3.82 | 12/16/2022 03/31/2024 | |||||||
| 10 | Customer H | Ground- mounted | Civil works | Perlis, Malaysia | 50.00 | 4.00 | 03/30/2023 03/31/2024 | |||||||
| 11 | Customer B | Ground- mounted | Installation, testing and commissioning of PV modules, inverters, DC cables and associated works | Terengganu, Malaysia | 100.00 | 8.46 | 09/13/2021 06/30/2024 | |||||||
| 12 | Customer D | Ground- mounted | Civil works and Structure, Mechanical and Electrical works | Kedah, Malaysia | 50.00 | 21.00 | 08/08/2023 09/25/2024 | |||||||
| 13 | Customer N | Ground- mounted | Engineering, Procurement, Construction and Commissioning | Kedah, Malaysia | 50.00 | 22.40 |
03/18/2024 03/31/2025 | |||||||
| 14 | Customer K | Ground- mounted | DC Works | Selangor, Malaysia | 11.8 | 4.4 | 10/15/2024 02/04/2026 | |||||||
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| C&I Projects | ||||||||||||||
| Project # |
Customer Name/Type |
Type of Facility |
Scope of Work | Location | Capacity (MWac) |
Contract Value (MYR Million) |
Start Date/ Completion Date | |||||||
| 1 | Customer E | Rooftop | Engineering, Procurement, Construction and Commissioning | Pinang, Malaysia | 1.50 | 5.13 | 10/31/2022 05/10/2023 | |||||||
| 2 | Customer I | Rooftop | Engineering, Procurement, Construction and Commissioning | Selangor, Malaysia | 2.65 | 0.35 | 05/20/2021 10/28/2021 | |||||||
| 3 | Customer O | Rooftop | Engineering, Procurement, Construction and Commissioning | Pinang, Malaysia | 0.99 | 3.56 | 05/09/2024 05/09/2025 | |||||||
| 4 | Customer P | Rooftop | Engineering, Procurement, Construction and Commissioning | Johor, Malaysia | 1.4 | 3.68 | 05/17/2024 04/11/2025 | |||||||
| 5 | Customer M | Rooftop | Supply, Deliver, Install, Testing and Commissioning | Perak & Kelantan & Johor, Malaysia | 0.34 | 1.20 | 04/04/2024 05/14/2025 | |||||||
| 6 | Customer L | Rooftop | Engineering, Procurement, Construction and Commissioning | Selangor, Malaysia | 0.8 | 2.81 | 01/03/2025 01/20/2026 | |||||||
On-going solar projects
As of the date of this annual report, our material on-going solar projects are as follows:
| Large-Scale Solar Projects | ||||||||||||||
| Project # |
Customer Name/Type |
Type of Facility |
Scope of Work | Location | Capacity (MWac) |
Contract Value (MYR million) |
Start Date/ Expected Completion Date | |||||||
| 1 | Customer J | Ground- mounted |
Engineering, Procurement, Construction and Commissioning | Selangor, Malaysia | 10.88 | 20.00 |
06/21/2024 05/31/2026 | |||||||
| 2 | Customer J | Ground- mounted |
Civil works and Structure, DC and AC and associated works |
Selangor, Malaysia | 9.99 | 20.00 |
01/02/2025 05/31/2026
| |||||||
| 3 | Customer F | Ground- mounted |
Supply, civil and structural works, commissioning and testing | Pahang, Malaysia | 29.99 | 10.00 |
05/07/2025 11/06/2026 | |||||||
| 4 | Customer F | Ground- mounted |
Supply, civil and structural works, commissioning and testing | Negeri Sembilan, Malaysia | 25.40 | 16.37 | 02/18/2025 05/31/2026 | |||||||
| 5 | Customer A | Ground- mounted |
Procurement, electrical, mechanical installation and commissioning | Kedah, Malaysia | 30.00 | 6.05 | 09/19/2025 05/30/2026 | |||||||
| 6 | Customer Q | Ground- mounted |
Engineering, Procurement, Construction and Commissioning | Kelantan, Malaysia | 5.50 | 19.50 | 12/29/2025 05/01/2027 | |||||||
| 7 | Customer Q | Ground- mounted |
Engineering, Procurement, Construction and Commissioning | Selangor, Malaysia | 9.50 | 34.00 | 12/29/2025 05/01/2027 | |||||||
| C&I Projects | ||||||||||||||
| Project # |
Customer Name/Type |
Type of Facility |
Scope of Work | Location | Capacity (MWac) |
Contract Value (MYR million) |
Start Date/ Expected Completion Date | |||||||
| 1 | Customer E | Rooftop | Engineering, Procurement, Construction and Commissioning | Kedah, Malaysia | 2.26 | 9.25 |
09/02/2024 03/31/2026 | |||||||
| 2 | Customer L | Rooftop | Engineering, Procurement, Construction and Commissioning | Melaka, Malaysia | 4.98 | 16.56 |
01/03/2025 06/30/2026 | |||||||
| 3 | Customer L | Rooftop | Engineering, Procurement, Construction and Commissioning | Selangor, Malaysia | 3.28 | 11.60 |
01/03/2025 03/31/2026 | |||||||
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Quality Control
Quality control is a paramount aspect of our operations as a solar PV facilities EPCC service provider. We recognize the significance of ensuring high-quality standards in both the equipment and materials we procure from suppliers, as well as the overall project execution, particularly for the work outsourced to external parties. To achieve this, we have established a comprehensive quality control framework.
Our approach to quality control encompasses two primary aspects. Firstly, we place great emphasis on the selection and procurement of equipment and materials from trusted suppliers. We thoroughly evaluate suppliers based on their track record, reputation, and adherence to quality standards. By partnering with reliable suppliers, we can ensure that the components used in our projects meet stringent quality requirements, contributing to the long-term performance and durability of the solar PV facilities.
Secondly, we implement rigorous project quality control measures to maintain high standards throughout the execution phase. We have developed a robust project quality plan that outlines our quality management system and processes. This plan includes comprehensive management procedures and forms, as well as project-specific procedures and plans tailored to each individual project.
Our quality control framework is designed to ensure adherence to industry best practices, regulatory requirements, and customer specifications. It encompasses various stages of the project lifecycle, including design, procurement, construction, installation, and commissioning. Through meticulous inspections, regular audits, and adherence to strict quality guidelines, we strive to deliver projects that meet or exceed the expectations of our clients.
Our Customers
Our customer base consists primarily of two types: project owners and project awarders. Project owners include developers or owners of utility-scale solar PV power plants for large-scale solar projects, or owners of solar system for C&I projects. On the other hand, project awarders are service providers or main contractors who secure solar project bids from project owners and then subcontract the work to subcontractors. In the case of C&I projects, the majority of our customers are project owners, while for large-scale solar projects, the majority of our customers are project awarders. For the fiscal years ended December 31, 2023, 2024, and 2025, revenue generated from servicing project owners was RM7,687,059 (approximately US$1,674,193), and RM13,128,870 (approximately US$2,933,498), and RM47,184,522 (approximately US$11,618,942) respectively, accounting for 5%, 15% and 39% of our total revenue, respectively. For the fiscal years ended December 31, 2023, 2024, and 2025, revenue generated from servicing project awarders was RM140,366,913 (approximately US$30,571,036), and RM77,215,718 (approximately US$17,252,981), and RM73,513,088 (approximately US$18,102,214), respectively, accounting for 95%, 85% and 61% of our total revenue.
Below is a list of the major customers and the percentages each of them individually accounted for our annual total revenue, during the fiscal years ended December 31, 2023, 2024, and 2025.
| For fiscal year 2023 | ||||
| Customer Name | Main Types of Services Provided | % of Total Revenue | ||
| Customer I | Supply of mounting structure and construction services | 29.88% | ||
| Customer III | Supply of mounting structure and construction services | 15.61% | ||
| Customer IV | Supply of mounting structure and construction services | 10.60% | ||
| For fiscal year 2024 | ||||
| Customer Name | Main Types of Services Provided | % of Total Revenue | ||
| Customer V | Construction services | 23.25% | ||
| Customer III | Supply of mounting structure and construction services | 11.55% | ||
| Customer VI | Supply of mounting structure and construction services | 9.56% | ||
| For fiscal year 2025 | ||||
| Customer Name | Main Types of Services Provided | % of Total Revenue | ||
| Customer VII | Construction services | 28.47% | ||
| Customer VIII | Construction services | 17.23% | ||
| Customer VI | Supply of mounting structure and construction services | 11.83% | ||
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For fiscal year 2025, we derived a significant portion of our revenue from Customer VII, which contributed 28.47% of our total revenue. That was mainly because in fiscal year 2025, we secured multiple large-scale solar projects from Customer VII. For fiscal year 2024, we derived a significant portion of our revenue from Customer V, which contributed 23.25% of our total revenue. That was mainly because in fiscal year 2024, we secured a large-scale solar project of 50MWac from Customer V. For fiscal year 2023, we derived a significant portion of our revenue from Customer I, which contributed 29.88% of our total revenue. That was mainly because in fiscal year 2023, we secured several large-scale solar project totaling 112.0 MWac from Customer I.
In general, we are not dependent on any customers for business given the unlikelihood of our customers undertaking solar PV projects on a recurring basis. Therefore, our EPCC services for large-scale solar projects and C&I projects would not be required repeatedly. Please see “Item 3. Key Information-D. Risk Factors-Risks Related to Our Business and Industry-We face risks associated with concentration of revenue from a few large clients. Any interruption in operations in such major clients may have an adverse effect on our business, financial condition, and results of operations.”
Our Suppliers
Our supplier network comprises two primary types: equipment suppliers and subcontractors. In solar projects where we assume responsibility for procuring all project materials and equipment, we source and acquire these items from trusted suppliers. Our equipment suppliers are manufacturers of solar components, including but not limited to solar panels, mounting systems and cables. Additionally, we collaborate with subcontractors for the construction and installation aspects of a solar PV project. These subcontractors possess the expertise and experience needed to carry out the construction and installation work. Maintaining strong relationships with both equipment suppliers and subcontractors is vital to our operations. We carefully select our suppliers based on their track record, product quality, and adherence to industry standards. Likewise, we engage subcontractors who demonstrate a proven ability to deliver projects on time and to specifications.
Below is a list of the major suppliers and the percentages each of them individually accounted for our annual total purchase, during the fiscal years ended December 31, 2023, 2024, and 2025.
| For fiscal year 2023 | ||||
| Supplier Name | Types of Products/Services Provided | % of Total Purchase | ||
| Solar First Energy Technology Co. Ltd. | Mounting structure | 16.00% | ||
| Xiamen Solar First Energy Technology Co. Ltd. | Mounting structure | 13.72% | ||
| For fiscal year 2024 | ||||
| Supplier Name | Types of Products/Services Provided | % of Total Purchase | ||
| Solar First Energy Technology Co. Ltd. | Mounting structure | 14.88% | ||
| For fiscal year 2025 | ||||
| Supplier Name | Main Types of Services Provided | % of Total Purchase | ||
| Supplier I | Subcontractor services | 15.20% | ||
In fiscal year 2023, a significant portion of our purchase was from Xiamen Solar First Energy Technology Co. Ltd., representing 13.72% of our total purchase for fiscal year 2023, respectively. In June 2021, by way of a deed of novation, we entered into a distributorship agreement with Xiamen Solar First Energy Technology Co. Ltd. and became its exclusive distributor of solar mounting systems in Malaysia. The distributorship agreement was effective until January 1, 2025. We did not renew the distributorship agreement; however, we are still able to make purchases from Xiamen Solar First Energy Technology Co. Ltd. on an as needed basis. As of the date of this annual report, all of the mounting systems that we sourced have been purchased from Xiamen Solar First Energy Technology Co. Ltd and its affiliate Solar First Energy Technology Co. Ltd. For other types of equipment and materials, we source and purchase from third-party suppliers on the market. Please see “Item 3. Key Information-D. Risk Factors-Risks Related to Our Business and Industry-We are exposed to risks related to concentration of suppliers as we rely on a few major suppliers, and it may have a material adverse effect on our business and results of operations.”
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Sales and Marketing
As of the date of this annual report, our sales and marketing team is comprised of three sales managers and two business development managers, who report directly to our CEO. Our sales and marketing department is primarily responsible for increasing our market share through acquiring new customers and businesses as well as furthering existing customer relationships through better service support and the provision of after-sales services to our customers. We are also able to generate sales leads through referrals from customers, suppliers and business associates.
We believe that maintaining good relationships with our existing customers will allow us to market our services to meet their evolving demands. We carry out the following marketing activities to acquire new customers and to promote our services to existing customers:
Participating in Exhibitions
As part of our marketing strategy, we actively participate in relevant exhibitions held annually in Malaysia and China, such as International Greentech & Eco Products Exhibition and Conference Malaysia (IGEM)) and Metaltech. IGEM is the leading trade events for green technologies and eco solutions in Asia. Through attending the exhibition, we have developed business contacts which have enabled us to expand our customer base and grow our business. We have also been able to create a more prominent profile, identify potential customers and keep ourselves updated on the industry trends through these exhibitions.
Approaching project awarders and project owners
Our marketing approach also involves targeted outreach to project awarders, complemented by effective follow-up through emails and phone calls. In Malaysia, many project awarders are listed companies that frequently announce tenders through public announcements. Therefore, it is crucial for us to devise a well-defined strategy for approaching and nurturing relationships with these organizations. By emulating this approach, we have been successfully securing a number of contracts and projects.
Currently, we have also implemented a targeted approach that involves directly reaching out to project owners by participating in their tenders. This strategy allows us to demonstrate our expertise, build trust, and establish a solid foundation for a fruitful business relationship. Our targeted approach ensures that we connect directly with the decision-makers, maximizing our chances of securing new contracts and projects. We continuously refine and adapt our marketing strategy to stay competitive and meet the evolving needs of the industry.
Networking with key stakeholders for business opportunities
In our marketing strategy, we actively engage in networking with industry stakeholders, such as financial institutions and suppliers to boost business opportunities. Financial institutions, as providers of corporate financing, possess valuable insights into potential clients who may benefit from our services. By cultivating relationships with these institutions, we gain access to a network of potential clients and valuable referrals. Similarly, suppliers within our industry often have firsthand knowledge of ongoing projects and the organizations involved. Through strategic networking with suppliers, we tap into their insights and leverage their connections to identify potential clients who may require our expertise. By fostering mutually beneficial relationships with suppliers, we create opportunities for collaboration and referrals that can lead to new business ventures. By leveraging these connections, we approach potential clients with precision, fostering long-term business growth.
Moving forward, we plan to launch series of new marketing activities to expand our brand awareness. We will establish a robust social media presence to engage with our targeted clients effectively. Additionally, we will seek partnership with external organizations, such as equipment manufacturers, to leverage their reach and promote our brand to a wider audience.
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Approvals, Permits and Licenses
In Malaysia, we must obtain several approvals, permits and licenses to operate within the framework set by the Sustainable Energy Development Authority (“SEDA”) Malaysia, Energy Commission of Malaysia (“ST”), and Malaysia Construction Industry Development Board (“CIDB”). We will also be subject to approvals, permits or licenses requirements in Singapore, Indonesia and the Philippines, if we expand our business into those markets in the future. As of the date of this annual report, we have obtained the following licenses and permits:
| Subsidiary | License/Permit | Issuing Entity |
Valid Through | |||
| Founder Energy (Malaysia) | Registration of photovoltaic service provider | SEDA | December 31, 2026 | |||
| Founder Energy (Malaysia) | Registration of Contractor for Grade G7 | CIDB | September 26, 2028 | |||
| Founder Energy (Malaysia) | Registration of Electrical Contractor | ST | August 4, 2026 | |||
| Founder Assets | Registered Solar Photovoltaic Investor under NEM Program | SEDA | December 31, 2026 | |||
| Founder Assets* | License for Public Installation under Energy Commission of Malaysia | ST | September 15, 2033 |
| * | This license imposes restriction on changes in shareholders and shareholding structure of the licensee (Founder Assets). Founder Assets is in the process of seeking written approval from the Energy Commission of Malaysia, regarding the shareholding structure change as a result of Founder Group’s IPO. See “Item 3. Key Information-D. Risk Factors-Risks Related to Our Business and Industry-If our subsidiary Founder Assets fails to secure approval from the Energy Commission of Malaysia, its business operations could be materially and adversely affected.” |
We plan to renew the above permits or licenses before expiration.
Competition
The solar energy industry in Southeast Asia is highly competitive and rapidly evolving, with many new companies joining the competition in recent years and few leading companies. We, as an EPCC service provider for solar facilities, face direct competition from other EPCC providers, as well as from traditional energy firms and companies offering alternative energy solutions. To effectively compete in this landscape, several crucial factors come into play. These include delivering high-quality projects, providing exceptional customer experiences, ensuring the retention of skilled professionals, adapting to evolving technology and customer preferences, and establishing a strong brand presence. While we believe our company is well-positioned to thrive based on these factors, we acknowledge that certain competitors may possess longer operating histories, greater financial and technical resources, or stronger brand recognition. These factors could present challenges and affect our market share and overall competitive position. For a discussion of competition-related risks, please see “Item 3. Key Information-D. Risk Factors-Risks Related to Our Business and Industry-The markets in which we operate are highly competitive, and we may not be able to compete successfully against existing or new competitors, which could reduce our market share and adversely affect our competitive position and financial performance.”
Intellectual Property and Technology
As of the date of this annual report, we do not have any registered trademarks, patents or copyrights. We have one domain name in Malaysia: founderenergy.com.my, which was registered on May 21, 2021.
We do not employ any special technologies in our business operations. However, we utilize software tools for our solar construction business, including PVsyst, HelioScope and AutoCAD. These tools help us optimize design, analyze system performance, and create accurate construction plans, enhancing efficiency and precision in our operations.
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Employees
As of December 31, 2025, 2024 and 2023, we had 76, 82, and 45 full-time employees, respectively. The following table sets forth the number of our full-time employees as of March 31, 2026:
| Function: | Number | |||
| Management | 3 | |||
| Sales and Marketing | 10 | |||
| Technical | 44 | |||
| Finance and Accounting | 8 | |||
| General and Administration | 15 | |||
| Total | 80 | |||
We enter into employment contracts with a confidentiality clause with our full-time employees.
We believe that we maintain a good working relationship with our employees, and we have not experienced material labor disputes in the past. None of our employees are represented by labor unions.
Facilities
Our principal executive office is located at No.17, Jalan Astana 1D, Bandar Bukit Raja, 41050 Klang, Selangor Darul Ehsan, Malaysia, with a lease term from August 1, 2024 to July 31, 2026 and a monthly rent of MYR26,000, pursuant to a tenancy agreement we entered into with the landlord, who is our Director and CEO Mr. Lee Seng Chi. We plan to renew this lease before expiration.
We also lease part of a warehouse from an independent third party to store our inventory, which is located at Lot 15156, Jalan Sg Tengkorak Kg Hamid Tuah, Telok Gong, 42000, Pelabuhan Klang, Selangor Darul Ehsan, Malaysia. The occupied area varies on a monthly basis depending on our operational demand and the rental rate is RM1.60 per month per square foot occupied. We did not enter into a lease agreement with the landlord and the lease is renewed on a monthly basis.
We believe that the office and the warehouse that we currently lease are adequate to meet our needs for the foreseeable future.
Insurance
To mitigate risks across different aspects of our operations and to ensure comprehensive coverage, we maintain various insurance policies and we believe the insurance coverage we maintain is in line with industry norms. As of the date of this annual report, we maintain the following insurance policies:
| ● | A business property insurance with an effective date from March 13, 2026 to March 11, 2027, which covers the loss or damage of our physical property, including furniture, fixtures, office equipment, tools and other items of value. |
| ● | An equipment insurance with an effective date from February 25, 2026 to February 24, 2027, which provides protection for our equipment; |
| ● | A group hospital & surgical insurance with an effective date from October 20, 2024 to October 19, 2026, which provides medical protection for our employees; |
| ● | A group personal accident insurance with an effective date from September 23, 2024 to September 22, 2026, which provides protection for our employees; and |
| ● | Directors and officers liability insurance for our directors and senior management, with an effective date from June 15, 2025 to June 14, 2026. |
In addition, under our contracts with project awarders, we are required to obtain certain necessary insurance coverage, including Contractor All-risk insurance for all of our projects, and Comprehensive General Liability and Workmen Compensation insurance, if so required, to mitigate potential risks during project execution.
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Seasonality
We do not experience any material seasonality in our business as the demand for our services are not subject to seasonal fluctuations.
Regulations
Regulations Relating to Our EPCC Services in Malaysia
Renewable Energy Act 2011
The Renewable Energy Act 2011 (“REA 2011”) provides for most matters relating to the generation of renewable energy in Malaysia, including specifying (i) the criteria and process for obtaining a feed-in approval and implementation of a special tariff system, (ii) the technical and operational requirements of renewable energy projects and (iii) the qualifying criteria for renewable energy sources. The Sustainable Energy Development Authority (“SEDA”) is tasked with overseeing matters relating to renewable energy falling within the scope of the REA 2011.
Pursuant to Rule 23 and Schedule 5 of Renewable Energy (Technical and Operational Requirements) Rules 2011 (“RETOR Rules 2011”), a person who carries out the works in connection with PV installations under the Feed-In Tariff programme should possess the requisite qualifications, such as having a certificate of competency issued by the Energy Commission under the Electricity Supply Act 1990, being registered with the Board of Engineers Malaysia as a professional electrical engineer, having certificate of training on solar PV systems issued by SEDA and/or in the event such person carries out solar PV system design work, having certificate in solar PV system design from any institution that is recognised by SEDA. Any person who commits an offence under the RETOR Rules 2011 shall, on conviction, be liable to a fine not exceeding RM300,000 or to imprisonment for a term not exceeding 3 years, or both. If a body corporate commits an offence, the person who at the time of the offence was a director, chief executive officer, chief operating officer, manager, secretary or other similar officer of the body corporate or one purporting to act in any such capacity or was responsible for the management of any of the affairs of the company or was assisting in such management, may be charged severally or jointly in the same proceedings as the company, and if the company is found guilty, the said person shall be deemed guilty of that offence unless he proves that the offence was committed without his knowledge, consent or connivance and that all reasonable precautions and due diligence were exercised to prevent the offence.
The Energy Commission had also issued the Guidelines on Solar Photovoltaic Installation on Net Energy Metering (“NEM”) Scheme under the Electricity Supply Act 1990 for the implementation of the solar PV installation on the NEM program (“NEM Guidelines”). The NEM Guidelines set out, amongst others, the design criteria and requirements, types of installation, capacity limit and application process of solar PV installations under NEM programmes.
As of the date of this annual report, Founder Energy (Malaysia) is certified by SEDA as a PV service provider to participate in any programme under the REA 2011 and Founder Assets is certified by SEDA as a solar PV investor under NEM Program.
As of the date of this annual report, we are in compliance with all material aspects of the REA 2011 and all rules and regulations made thereunder for the conduct and performance of our business operations.
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Electricity Supply Act 1990
The Electricity Supply Act 1990 (“ESA 1990”) which applies throughout Malaysia, regulates the electricity supply industry, the supply of electricity at reasonable prices, the licensing of any electrical installation, the control of any electrical installation, plant and equipment with respect to matters relating to the safety of persons and the efficient use of electricity and for purposes connected therewith.
Pursuant to Section 9 of the ESA 1990, subject to exemptions prescribed, no person other than a supply authority shall use, work or operate or permit to be used, worked or operated any installation or supply to any other person electricity from any installation, except under and in accordance with the terms and conditions of a license granted by the Energy Commission which expressly authorising the supply or use. Any person who supplies electricity from an installation to or for the use of any person without a license shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding RM100,000 and to a further fine not exceeding RM1,000 for every day or part of a day during which the offence continues after conviction. Where an offence is committed by a body corporate, any person who at the time of the commission of the offence was a director, chief executive officer, chief operating officer, manager, secretary or other similar officer of the body corporate or was purporting to act in such capacity or was in any manner or to any extent responsible for the management of any of the affairs of the body corporate or was assisting in such management may be charged severally or jointly in the same proceedings with the body corporate and if the body corporate is found guilty of the offence, shall be deemed to be guilty of that offence unless having regard to the nature of his functions in that capacity and to all circumstances, he proves that the offence was committed without his knowledge, consent or connivance; and that he had taken all reasonable precautions and exercised due diligence to prevent the commission of the offence.
Further, Regulation 75 of the Electricity Regulations 1994 states that no person shall perform or carry out any electrical work unless he holds a valid certificate of registration as an electrical contractor issued under the Electricity Regulations 1994. An electrical contractor can be classified into 4 classes, Class A, B, C and D, each permitted to undertake electrical work of certain value and is further required to keep in employment a certain number of wiremen of certain qualification, depending on the classification of its registration. The Electricity Regulations 1994 also provides that the wireman shall possess a valid certificate of competency appropriate to such classes, with restrictions, if any, issued to him by the Energy Commission.
Generally, unless otherwise specified in the Electricity Regulations 1994, a person who contravenes or fails to comply with any of the provisions of the Electricity Regulations 1994 shall be guilty of an offence and shall on conviction, be liable to a fine not exceeding RM5,000 or to imprisonment for a term not exceeding 1 year or both.
As of the date of this annual report, our subsidiary, Founder Energy (Malaysia) is registered with the Energy Commission under the Electricity Regulations 1994 to carry out electrical work business as an Electrical Contractor (Class A).
Construction Industry Development Board Malaysia Act 1994
The Construction Industry Development Board Malaysia Act 1994 (“CIDBA 1994”) regulates the establishment of Malaysian Construction Industry Development Board (“CIDB”) and provides for its function in relation to the construction industry and all matters connected therewith throughout Malaysia.
Pursuant to the CIDBA 1994, “contractor” is defined as a person who carries out or completes or undertakes to carry out or complete any construction works, whereas “construction works” for the purpose of CIDB shall mean the construction, extension, installation, repair, maintenance, renewal, removal, renovation, alteration, dismantling or demolition of, inter alia, any electrical or mechanical works, and includes the procurement of construction materials, equipment or workers, necessarily required for any such work.
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The CIDBA 1994 prescribes that a contractor must register with the CIDB and hold a valid certificate of registration issued by the CIDB under the CIDBA 1994 in order to carry out or complete, undertake to carry out or complete any construction works or hold himself as a contractor. Any person who contravenes this shall, on conviction, be liable to a fine of not less than RM10,000 but not more than RM100,000. The CIDBA 1994 further provides that where an offence against the CIDBA 1994 has been committed by a body corporate, any person who at the time of committing the offence is a director, manager, secretary or other similar officer of the body corporate, or was purporting to act in such capacity, or is in any manner or to any extent responsible for its management may be charged severally or jointly in the same proceedings and where the body corporate, is found guilty of the offence, shall be deemed to be guilty of that offence unless, having regard to the nature of his functions in that capacity and to all the circumstances, he proves that the offence was committed without his knowledge, consent or connivance and that he took all reasonable precautions and had exercised due diligence to prevent the commission of the offence.
Section 34(1) of the CIDBA 1994 also prescribes that every contractor is required to declare and submit to the CIDB any contract which he has been awarded on any construction works. A contractor who contravenes this provision shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding RM50,000. Pursuant to Section 34(2) of the CIDBA 1994, for every contract, whether stamped or not, having a contract sum of above RM500,000, the contractor shall be liable to pay to CIDB a levy at the current rate of 0.25 per centum of the contract sum. The levy shall be settled by the main contractor who had made the declaration for the entire value of the project. Where a contractor fails to pay any levy due within the prescribed period by CIDB, the contractor shall, on conviction, be liable to a fine not exceeding RM50,000 or 4 times the amount of the levy payable, whichever is higher.
As of the date of this annual report, our subsidiary, Founder Energy (Malaysia) holds a valid Grade G7 certificate of registration issued under CIDBA 1994.
Founder Energy (Malaysia) breached Section 34(1) of the CIDBA 1994 by failing to declare and submit 31 contracts to CIDB. Among these contracts, 12 were awarded to Founder Energy (Malaysia) as the main contractor, with six contracts exceeding RM500,000 in value, while the remaining 19 were awarded to Founder Energy (Malaysia) as a sub-contractor. Founder Energy (Malaysia) potentially faces a fine of up to RM1,550,000.
As a result of the breach, Founder Energy (Malaysia) may be subject to fines or penalties or its certificate of registration may be subject to suspension or revocation, which could result in a material adverse impact on our operations. Founder Energy (Malaysia) has rectified this non-compliance by promptly declaring and submitting these contracts with CIDB. As at the date of this annual report, Founder Energy (Malaysia) has not been fined or issued with any notice of non-compliance from CIDB or any other relevant authorities.
Local Government Act 1976
The Local Government Act 1976 (“LGA 1976”) provides a local authority with the power to grant a license or permit for any trade, occupation or premises. Such license may be subject to such conditions and restrictions as the local authority may think fit.
Our subsidiaries carry out their business from a premise located in Klang, Selangor Malaysia and thus shall be subject to Trade, Business and Industrial Licensing Bylaw (Klang Municipal Council) 2007 (“Klang Bylaws 2007”). The Klang Bylaws 2007 is promulgated under the LGA 1976 and governs the licenses related to the trading or business and industrial matters within Klang municipality.
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The Klang Bylaws 2007 provides that no person shall operate any activity of trade, business and industry or use any place or premise in the local area of Klang municipality for any activity of trade, business and industry without a license issued by Klang Municipal Council. Any person who does not comply with provisions under Klang Bylaws 2007 shall be guilty of an offence and upon a conviction shall be liable to a fine not exceeding RM2,000 or to imprisonment for a term not exceeding one year or both or where there is a continuing offence, to a fine not exceeding RM200 for each day the offence continues after conviction.
As of the date of this annual report, our Malaysian subsidiaries, Founder Energy (Malaysia) and Founder Assets have submitted its application for the business premises license from Klang Municipality Council but the applications are still pending processing by the Klang Municipality Council. As at the date of this annual report, Founder Energy (Malaysia) and Founder Assets have not been fined or issued with any compound for non-compliance from the Klang Municipality Council.
Regulations Relating to Environment and Safety
Occupational Safety and Health Act 1994
The Occupational Safety and Health Act 1994 (“OSHA 1994”) is the governing law regulating the standards for safety, health and welfare of persons at work. The OSHA 1994 is enforced by the Department of Occupational Safety and Health, Malaysia (“DOSH”), which is under the purview of the Ministry of Human Resources, Malaysia and applies only to those industries listed in the First Schedule of the OSHA 1994, which include the construction industry.
Section 15 of the OSHA 1994 states that it shall be the duty of every employer to ensure, so far as is practicable, the safety, health and welfare at work of all his employees, in particular:
| (a) | the provision and maintenance of plant and systems of work that are, so far as is practicable, safe and without risks to health; |
| (b) | the making of arrangements for ensuring, so far as is practicable, safety and absence of risks to health in connection with the use or operation, handling, storage and transport of plant and substances; |
| (c) | the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is practicable, the safety and health at work of his employees; |
| (d) | so far as is practicable, as regards any place of work under the control of the employer, the maintenance of it in a condition that is safe and without risks to health and the provision and maintenance of the means of access to and egress from it that are safe and without such risks; |
| (e) | the provision and maintenance of a working environment for his employees that is, so far as is practicable, safe, without risks to health, and adequate as regards facilities for their welfare at work; and |
| (f) | the development and implementation of procedures for the dealing with emergencies that may arise while his employees are at work. |
Non-compliance of section 15 of the OSHA 1994 will result in an offence and on conviction, the employer is liable to a fine not exceeding RM500,000 or to imprisonment for a term not exceeding two years or to both, pursuant to section 19 of the OSHA 1994. Where a body corporate contravenes any provisions of the OSHA 1994 or any regulations made thereunder, every person, who at the time of the commission of the offence is a director, manager, secretary or other like officer of the body corporate shall be deemed to have contravened the provision and may be charged jointly in the same proceedings with the body corporate or severally, and every such director, manager, secretary or other like officer of the body corporate shall be deemed to be guilty of the offence, as set out in section 52 of the OSHA 1994.
As of the date of this annual report, our Malaysian subsidiaries, Founder Energy (Malaysia) and Founder Assets are in compliance with the OSHA 1994 and all regulations made thereunder.
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Solid Waste and Public Cleansing Management Act 2007
The Solid Waste and Public Cleansing Management Act 2007 (“SWPCM 2007”) regulates the management of controlled solid waste and public cleansing for the purpose of maintaining proper sanitation. The SWPCM 2007 provides for solid waste management services which includes the separation, storage, collection, transportation, transfer, processing, recycling, treatment and disposal of controlled solid waste. One of the categories of controlled solid waste under the SWPCM 2007 is construction solid waste.
Construction solid waste is defined under SWPCM 2007 as any solid waste generated from any construction or demolition activity, including improvement, preparatory, repair or alteration works. Pursuant to Solid Waste and Public Cleansing Management (Scheme for Construction Solid Waste) Regulations 2018, the duties of construction solid waste generators or persons in possession of construction solid waste shall include separating the waste according to its types, ensuring proper storage of the waste, making available receptacles for the waste, ensuring that the waste is collected by a licensed collector and keeping a record of the collection services. Any person who contravenes any of the aforementioned duties commits an offence and shall, on conviction, be liable to a fine not exceeding RM10,000.00.
Our Malaysian subsidiaries have taken steps to ensure compliance with the provisions of SWPCM 2007 and all regulations made thereunder.
Regulations Relating to Employment Matters
Employment Act 1955
The Employment Act 1955 (“EA 1955”) is the primary legislation on labour matters and provides for minimum work requirements and benefits of employment, such as maximum working hours, overtime entitlement, leave entitlement, maternity protection, sexual harassment protection and termination benefits. The 1955 Act is applicable only in Peninsular Malaysia and Federal Territory of Labuan, to all employees who have entered into a contract of service. However, employees earning more than RM4,000 a month shall be excluded from provisions under the EA 1955 relating to working on a rest day, overtime payments, statutory entitlement to shift allowances, working on a public holiday and statutory entitlement to termination and lay-off benefits.
It is stated under the EA 1955 that in the event of inconsistency between the terms contained in the employment contract and the provisions prescribed under the EA 1955, the more favourable term shall be enjoyed by the employee. Nevertheless, an employee aggrieved by the inconsistency may lodge a complaint of non-compliance of the standards under the EA 1955 to the Director General of Labour.
Any person who commits an offence under or contravenes any provision of the EA 1955 or any regulations, order or other subsidiary legislation whatsoever made thereunder, in respect of which no penalty is provided, shall be punishable to a fine not exceeding RM50,000 upon conviction. Where an offence has been committed by a body corporate, any person who is a director, manager, or other similar officer of the body corporate at the time of the commission of the offence shall be deemed to have committed the offence and may be charged jointly or severally in the same proceedings as the body corporate.
Industrial Relations Act 1967
Industrial Relations Act 1967 (“IRA 1967”) seeks to promote and maintain industrial harmony and provides for the regulation of the relations between employers and workmen and their trade unions and the prevention and settlement of any differences or disputes arising from their relationship and generally to deal with trade disputes. Matters relating to trade disputes, including constructive dismissal and retrenchment may be referred by the Minister of Human Resources to the Industrial Court. Under the IRA 1967, an employer may not terminate the employment of an employee without just cause and excuse, regardless of the express provisions in the terms of employment. In the event that a workman considers that he has been dismissed without just cause or excuse by his employer with notice, the workmen may file a representation at any time during the period of such notice but not later than sixty days from the expiry thereof.
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Employees’ Provident Fund Act 1991
The Employees’ Provident Fund Act 1991 (“EPFA 1991”) imposes the statutory obligations on employers and employees to make contribution towards the Employees Provident Fund, which is essentially a fund established as a scheme of savings for employees’ retirement and the management of savings for retirement purposes. Pursuant to section 43(1) of the EPFA 1991, it is compulsory for employees and their employers to make monthly contributions on the amount of wages at the rate respectively set out in the Third Schedule of the EPFA. Any employer who fails to pay the necessary contributions to the account of the individual employee shall be liable to imprisonment for a term not exceeding 3 years or to a fine not exceeding RM10,000 or to both.
As of the date of this annual report, we have made the required contributions towards the Employees Provident Fund and we are in compliance with the EPFA 1991 and all regulations made thereunder.
Employees’ Social Security Act 1969
The Employees Social Security Act 1969 (“ESSA 1969”) was implemented to provide protection for employees and their dependents against economic and social distress in the event of invalidity, disablement or employment injury.
The schemes of social security under the 1969 Act are administered by Social Security Organization (“SOCSO”) and are financed by compulsory contributions made by the employers and the employees. All employees, in industries to which the SOCSO Act applies are required to be insured. It is the obligation of the employer to pay the contribution (both the employer’s contribution and the employee’s contribution) to SOCSO at the rates set out in Third Schedule of ESSA 1969.
Pursuant to ESSA 1969, any person being an employer who fails to pay any contributions which he is liable under the ESSA 1969 to pay in respect of or on behalf of any employee shall be punishable with imprisonment for a term which may extend to 2 years, or with fine not exceeding RM10,000, or with both.
As of the date of this annual report, we have made the required contributions under the ESSA 1969 and we are in compliance with the ESSA 1969 and all regulations made thereunder.
Employment Insurance System Act 2017
The Employment Insurance System Act 2017 (“EISA 2017”) provides for the establishment of an employment insurance system (“EIS”) administered by SOCSO to provide certain benefits and a re-employment placement program for insured persons in the event of loss of employment which will promote active labour market policies.
All employees in the industries to which the EISA 2017 applies shall be registered and insured by the employers. Under the EISA 2017, both employers and employees (from 18 to 59 years of age) are required to contribute to the EIS with the rates, subject to the revision by the Minister, as specified in the Second Schedule based on the amount of the monthly wages of the employee. Employees who have attained the age of 60, or employees who have attained the age of 57 and have never made contributions under the EISA 2017 before attaining the age of 57, are exempted from this protection plan.
An insured person who considers that he has lost his employment shall submit an application to claim for benefits up to 6 months to SOCSO within 60 days from the date he considers that he has lost his employment. After considering if the contributions qualifying conditions are fulfilled (the fulfillment of which depends on the number of past claims and contributions made preceding to the loss of employment) in respect of a claim for benefits by an insured person, SOCSO may approve or reject the claim for benefits.
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Minimum Wages Order 2024
Pursuant to the Minimum Wages Order 2024, with effect from February 1, 2025, the minimum wage for employees shall be RM1,700 a month for employers who have 5 employees or more and those employers categorized as conducting professional activities regardless of the number of employees they have. From August 1, 2025, the minimum wage for employees shall be RM1,700 a month regardless of the number of employees. Under the National Wages Consultative Council Act 2011, failure to comply with the minimum wage requirement may result in a fine of not more than RM10,000 imposed on the employer for each employee. If an employer is a body corporate, any person who at the time of the commission of the offence was a director, manager, secretary or other similar officer of the body corporate may be charged severally or jointly in the same proceedings with the body corporate and if the body corporate is found to have committed the offence, shall be deemed to have committed that offence unless, having regard to the nature of his functions in that capacity and to all circumstances, he proves that the offence was committed without his knowledge, consent or connivance; and that he had taken all reasonable precautions and exercised due diligence to prevent the commission of the offence.
The Malaysian court may also order the employer to pay each employee the difference between statutory minimum wages and the employee’s basic wages paid by the employer to the employee, including outstanding differences.
Regulations Relating to Foreign Exchange Rules
Financial Services Act 2013
The exchange control regime in Malaysia is regulated by the Financial Services Act 2013 (“FSA 2013”). The FSA 2013 has prescribed a list of transactions that are prohibited without approval from Bank Negara Malaysia (the Central Bank of Malaysia) (“BNM”) and it regulates the domestic and international transactions involving residents and non-residents of Malaysia. The requirements, restrictions, and conditions of approval in respect of the prohibited transactions and directions of BNM are further set forth in the Foreign Exchange Policy Notices issued by BNM (the “FEP Notices”).
Under the FSA 2013 and the FPE Notices, all payments made between the residents of Malaysia must be paid in Malaysian ringgit, subject to limited exceptions and approval under the FEP Notices, whereas payment made between resident and non-resident of Malaysia may be made either (i) in Malaysian ringgit, if for the prescribed purposes (for, among others, any purpose between immediate family members, income earned or expenses incurred in Malaysia or settlement of trade in goods or services in Malaysia), or (ii) in foreign currency (except for the currency of Israel), if for any purpose subject to certain prohibition under the FEP Notices. On the other hand, non-residents are allowed to make or receive payment in foreign currency (except for the currency of Israel) in Malaysia for any purpose. Non-residents are also allowed to repatriate divestment proceeds, profits, dividends or any income arising from any investments in Malaysia, provided that the repatriation is made in foreign currency (except for the currency of Israel) and in accordance with the FEP Notices. Any person who fails to comply with any direction of BNM commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding 10 years or to a fine not exceeding RM50,000,000 or to both.
Unless otherwise restricted by contractual undertakings and subject to applicable laws, our Malaysian subsidiaries are at liberty to distribute dividends to us in foreign currency without having to seek prior approval from BNM.
C. Organizational Structure
See “-A. History and Development of the Company.”
D. Property, Plants and Equipment
See “-B. Business Overview-Facilities.”
Item 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
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Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report. This annual report contains forward-looking statements. In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information-D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.
A. Operating Results
Comparison of Results of Operations for the Fiscal Years Ended December 31, 2024 and 2025
Revenue
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | Variance | |||||||||||||||||||||||||
| RM | % of total revenue | RM | % of total revenue | USD | RM | % | ||||||||||||||||||||||
| Large-scale solar projects | 68,864,991 | 76 | % | 73,706,601 | 61 | % | 18,149,866 | 4,841,610 | 7 | % | ||||||||||||||||||
| Commercial and Industrial projects | 21,479,597 | 24 | % | 46,991,009 | 39 | % | 11,571,290 | 25,511,412 | 119 | % | ||||||||||||||||||
| 90,344,588 | 100 | % | 120,697,610 | 100 | % | 29,721,156 | 30,353,022 | 34 | % | |||||||||||||||||||
Revenue for the year ended December 31, 2025 was RM120,697,610 (US$29,721,156) representing an increase of 33.6% from RM90,344,588 for the fiscal year ended December 31, 2024. The increase in revenue was mainly driven by higher contribution from commercial and industrial projects. The increase was in line with government promotion of use of renewable energy and the materialization of our sales and marketing effort in the previous years.
Our revenue generated from large-scale solar projects increased by RM4,841,610 or approximately 7% from RM68,864,991 for the fiscal year ended 2024 to RM73,706,601 (USD18,149,866) for the fiscal year 2025. The increase was due to the delivery of several large-scale solar projects during the financial year.
Our revenue generated from commercial and industrial projects increased by RM25,511,412, or approximately 119% from RM21,479,597 to RM46,991,009 (USD11,571,290) for the fiscal year 2025. The increase was due to securing several rooftop solar projects and increase in number of on-going projects during the fiscal year.
Cost of Sales
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Material Cost | 27,348,569 | 22,803,566 | 5,615,259 | -4,545,003 | (16.6 | )% | ||||||||||||||
| Construction Cost | 47,319,827 | 71,923,022 | 17,710,668 | 24,603,195 | 52.0 | % | ||||||||||||||
| Staff Cost | 4,482,351 | 4,921,191 | 1,211,817 | 438,840 | 9.8 | % | ||||||||||||||
| Logistic Cost | 1,382,209 | 1,444,293 | 355,650 | 62,084 | 4.5 | % | ||||||||||||||
| Tools & Machinery | 242,645 | 1,008,850 | 248,424 | 766,205 | 315.8 | % | ||||||||||||||
| Miscellaneous | 2,910,139 | 2,902,876 | 714,818 | -7,263 | (0.2 | )% | ||||||||||||||
| Depreciation | 416,378 | 1,715,714 | 422,486 | 1,299,336 | 312.1 | % | ||||||||||||||
| Total cost of sale | 84,102,118 | 106,719,511 | 26,279,122 | 22,617,393 | 26.9 | % | ||||||||||||||
Cost of sales represents our cost incurred in constructing projects, purchasing materials, specific staff costs and other project-related costs incurred for identifiable projects.
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The increase in cost of sales aligned with the overall increase in revenue, primarily due to the securing of more commercial and industrial projects and delivery of multiple large-scale solar projects during the fiscal year.
The material cost for the fiscal year ended December 31, 2025 was RM22,803,566 (USD5,615,259), representing a decrease of 16%, from RM27,348,569 for the fiscal year ended December 31, 2024. The decrease due to reduction in sales of our mounting structure as we are slowly focusing our expansion on EPCC services.
The construction cost for the fiscal year ended December 31, 2025 was RM71,923,022 (USD17,710,668), representing an increase of 52%, from RM47,319,827 for the fiscal year ended December 31,2024. The increase was in line with the increase in our revenue from executing commercial and industry projects and also multiple large-sized contracts during the year.
The staff costs for the fiscal year ended December 31, 2025 was RM4,921,191 (USD1,211,817), representing an increase of 9.8%, from RM4,482,351 for the fiscal year ended December 31, 2024. The increase was due to the expansion of our operation team to execute large-scale projects secured in the previous fiscal year and during the year, aligned with an increase in our number of full-time employees.]
The logistic costs for the fiscal year ended December 31, 2025 was RM1,444,293 (USD355,650), representing an increase of 4.5%, from RM1,382,209 for fiscal year ended December 31, 2024. The increase was due to the higher rental expenses for company vehicles used for site travel and increased warehouse storage costs to maintain a high inventory level for upcoming projects.
The tools and machinery for fiscal year ended December 31, 2025 was RM1,008,850 (USD248,424), representing an increase of 315.8%, from RM242,645 for the fiscal year ended December 2024. The increase was due to a increase in hiring machinery at site to expedite the progress of works to meet the completion timeline during the year.
The miscellaneous for fiscal year ended December 31, 2025 was RM2,902,876 (USD714,818), representing a decrease of 0.2%, from RM2,910,139 for the fiscal year ended December 2024. The miscellenous fees stay relatively unchanged due to its nature of expenses does not fluctuate according to business activities.
The depreciation for fiscal year ended December 31, 2025 was RM1,715,714 (USD422,486), representing a significant increase of 312.1%, from RM416,378 for the fiscal year ended December 2024. The increase was due to Founder Assets invested in rooftop solar assets and the successful commissioning of these long-term solar assets, which commenced power generation during the financial year.
Selling and Administrative Expenses
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Audit fees | 731,900 | 711,806 | 175,278 | (20,094 | ) | (3 | )% | |||||||||||||
| Stamp duty | 85,838 | 407,806 | 100,420 | 321,968 | 375 | % | ||||||||||||||
| Bank charges | 25,999 | 41,548 | 10,231 | 15,549 | 60 | % | ||||||||||||||
| Insurance premiums | 362,328 | 517,400 | 127,407 | 155,072 | 43 | % | ||||||||||||||
| Information and Communication Technology subscription | 105,798 | 399,649 | 98,411 | 293,851 | 278 | % | ||||||||||||||
| Management fees | 111,836 | 9,921 | 17,286 | (41,638 | ) | (37 | )% | |||||||||||||
| Loss on foreign exchange | 1,312,086 | 805,732 | 198,407 | (506,354 | ) | (39 | )% | |||||||||||||
| Depreciation | 355,596 | 905,619 | 223,004 | 550,023 | 155 | % | ||||||||||||||
| Directors’ fee, salaries and other related expenses | 1,051,266 | 2,029,598 | 499,778 | 978,332 | 93 | % | ||||||||||||||
| Employee benefits expenses | 3,511,965 | 4,821,706 | 1,187,320 | 1,309,741 | 37 | % | ||||||||||||||
| Impairment losses / (Reversal on impairment losses) of contract assets | 2,372,132 | (2,668,908 | ) | (657,205 | ) | (5,041,040 | ) | (213 | )% | |||||||||||
| Impairment losses on trade receivables | 552,875 | 1,662,565 | 409,398 | 1,109,690 | 201 | % | ||||||||||||||
| Other expenses | 1,270,582 | 6,458,315 | 1,590,326 | 5,187,733 | 408 | % | ||||||||||||||
| 11,850,201 | 16,102,757 | 3,965,220 | 4,252,556 | 36 | % | |||||||||||||||
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Selling and administrative expenses mainly comprise of employee benefits expenses, directors’ fee, impairment losses on trade receivables and contract assets, loss on foreign exchange, consultancy fees, legal and professional fees and audit fees and other administrative expenses. The selling and administrative expenses increased significantly by RM4,252,556 (USD1,047,170), or approximately 36%, from RM11,850,201 in fiscal year 2024 to RM16,102,757 (USD3,965,220) in fiscal year 2025. The increase was mainly attributable to the following reasons:
Insurance premiums paid for fiscal year ended December 31, 2025 was RM517,400 (USD127,407), representing an increase of 43% from RM362,328 in fiscal year ended December 31, 2024. The increase in insurance premiums was mainly due to the increase in headcounts and assets under insured.
ICT subscription paid for fiscal year ended December 31, 2025 was RM399,649 (USD 98,411), representing increase of 278% from RM105,798 for fiscal year ended December 31, 2024. The increase in ICT subscription was due to the more subscription on accounting and project-related software, as well as computer software during the year.
Management fees paid for fiscal year ended December 31, 2025 was RM70,198 (USD17,286), representing a decrease of 37%, from RM111,836 in fiscal year ended December 31, 2024. The decrease in management fees was due to the annual revision of management fees by our holding company.
Loss on foreign exchange incurred for fiscal year ended December 31, 2025 was RM805,732 (USD198,407), representing a decrease of 39%, from RM1,312,086 in fiscal year ended December 31, 2024. The significant decrease in both realized and unrealized loss of foreign exchange was due to strengthening of RM against foreign currencies, particularly the USD and CNY, impacting both trade and non-trade transactions.
Depreciation of plant and equipment and right-of-use assets incurred for fiscal year ended December 31, 2025 was RM905,619 (USD223,004), representing an increase of 155%, from RM355,596 in fiscal year ended December 31, 2024. The increase was primarily attributable to the acquisition of additional fixed assets, including office renovation for our newly leased office and motor vehicle.
Reversal on impairment losses on contract assets incurred for fiscal year ended December 31, 2025 was RM2,668,908 (USD657,205), representing a decrease of 213%, reversed from RM2,372,132 of impairment losses on contract assets in fiscal year ended December 31, 2024. The reversal of impairment losses on contract assets was due to positive outcome from the negotiation with customer to conclude the final billing of these projects.
Impairment losses on trade receivables incurred for fiscal year ended December 31, 2025 was RM1,662,565 (USD409,398). The increase in impairment losses on trade receivables mainly due to the provision made for a receivable for a specific project.
Other selling and administrative expenses mainly consist of legal and professional fees, back-charged expenses from customer, project tender fees, entertainment expenses, office expenses and travelling expenses. The legal and professional fees mainly comprise of one-off expenses related to the IPO exercise, including but not limited to legal and consultancy fees, accountants’ fees, investor relations consultant’s fees and other associated costs.
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Employee Benefits Expenses
| For the year ended December 31, 2024 | For the year ended December 31, 2025 | For the year ended December 31, 2025 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Directors’ fees | 212,633 | 796,125 | 196,042 | 583,492 | 274 | % | ||||||||||||||
| Directors’ salaries | 556,692 | 822,000 | 202,413 | 265,308 | 48 | % | ||||||||||||||
| Admin salaries | 2,261,769 | 3,591,040 | 884,275 | 1,329,271 | 59 | % | ||||||||||||||
| Technical staff salaries | 3,036,224 | 3,525,208 | 868,064 | 488,984 | 16 | % | ||||||||||||||
| Total | 6,067,318 | 8,734,373 | 2,150,794 | 2,667,055 | 44 | % | ||||||||||||||
| For the year ended December 31, 2024 | For the year ended December 31, 2025 | For the year ended December 31, 2025 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Director related expenses | 281,941 | 698,011 | 171,882 | 416,070 | 148 | % | ||||||||||||||
| Admin related expenses | 1,250,196 | 1,230,666 | 303,045 | (19,530 | ) | (2 | )% | |||||||||||||
| Technical staff related expenses | 1,449,449 | 1,403,500 | 345,605 | (45,949 | ) | (3 | )% | |||||||||||||
| Total | 2,981,586 | 3,332,177 | 820,532 | 350,591 | 12 | % | ||||||||||||||
Our employee benefit expenses for fiscal year ended December 31, 2025 were RM9,750,414 (USD2,400,989), representing an increase of 22%, from RM7,997,638 for the fiscal year ended December 2024. The increase was due to increase in director related expenses where the independent directors fees in 2025 was effective for the full fiscal year, where it only effective for 3 months in fiscal year ended December 31, 2024.
Directors’ fees, salaries and director related expenses paid for fiscal year ended December 31, 2025 was RM2,316,136 (USD570,337), representing an increase of 120%, from RM1,051,266 in fiscal year ended December 31, 2024. The significant increase was mainly due to where the independent directors fees in 2025 was effective for the full fiscal year, where it only effective for 3 months in fiscal year ended December 31, 2024.
Other Income
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Interest income | 102,605 | 239,943 | 59,085 | 137,338 | 134 | % | ||||||||||||||
| Realized gain on foreign exchange | 862,011 | 1,013,806 | 249,645 | 151,795 | 18 | % | ||||||||||||||
| Unrealized gain on foreign exchange | 242,589 | 398,870 | 98,220 | 156,281 | 64 | % | ||||||||||||||
| Discount received | - | - | - | - | - | |||||||||||||||
| Income from secondment of staff | 86,864 | 62,612 | 15,418 | (24,252 | ) | (28 | )% | |||||||||||||
| Income from tender preparation | 73,254 | 88,188 | 21,716 | 14,934 | 20 | % | ||||||||||||||
| Back-charged costs to subcontractors | 642,638 | - | - | (642,638 | ) | (100 | )% | |||||||||||||
| Others | 13,918 | 32,603 | 8,028 | 18,685 | 134 | % | ||||||||||||||
| 2,023,879 | 1,836,024 | 452,111 | (187,855 | ) | (9 | )% | ||||||||||||||
Other income mainly derived from income from realized and unrealized gain on foreign exchange, back-charged costs to subcontractors, secondment of staff and interest income.
In the fiscal year 2024, our other income primarily consists of realized and unrealized gain on foreign exchange, interest income and income from secondment of staff. The realized and unrealized gains on foreign exchange were a result of the MYR appreciating against the Chinese Renminbi and United States Dollar from the invoice date to the year’s end on December 31, 2024. The cost back-charged to subcontractors include project-related costs necessary for the execution of works under their respective scopes. The interest income was earned from fixed deposits placed with financial institutions and the income from secondment of staff is similar with the reimbursement charged in the fiscal year 2023.
In the fiscal year 2025, our other income primarily consists of realized and unrealized gain on foreign exchange, income from tender preparation, and secondment of staff and interest income.
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Finance Cost
Finance cost is mainly derived from interest expenses charged by financial institutions on working capital financing under banking facilities and interest expenses charged by our holding company for advances.
Interest expenses for the fiscal year ended December 31, 2025 were RM5,374,177 (USD1,323,363), representing an increase of 160%, from RM2,066,597 in the fiscal year ended December 31, 2024. The increase in interest expenses was due to the increase in utilization of term loan and trade financing from financial institutions and advances received from our holding company to cater for the increase in working capital requirement as a result of our business expansion.
Income Tax
Our current taxation decreased from RM500,444 of income tax benefit for the fiscal year ended December 31, 2024 to income tax expense of RM2,107,418 (USD518,941) for the fiscal year ended December 31, 2025 due to a profit generated by Founder Energy (Malaysia). For the subsidiaries that are incorporated in Malaysia, they are governed by the income tax laws of Malaysia. The income tax provision in respect of operations in Malaysia is calculated at the applicable tax rates of 24% (2024: 24%) on the taxable income for the fiscal year ended December 31, 2025.
Segment Operation
The group reporting is organized and managed in two major business units. All of our revenue is derived from one segment country which is in Malaysia.
The reportable segments are summarized as follows:
| i) | Large-scale solar - Large-scale solar projects are utility scale solar PV power plants with installed generating capacity of 1 MWac or more. Large-scale solar projects are ground mounted and are designed to supply power to the power grid. For the majority of our large-scale solar projects, we usually act as the contractor to the project awarder, who is the main contractor for a solar project. |
| ii) | Commercial & Industrial - C&I projects are smaller scale solar projects where the solar PV systems are installed on rooftops and are designed to generate electricity for commercial and industrial properties for their own consumption, such as factories, warehouses and commercial stores. For C&I projects, we usually sign a service contract with the project owner and act as the main contractor. |
Revenue from contract services primarily involved in project execution, including construction, installation and integration works, testing and commissioning of our solar projects. Revenue from sales of goods involved in supply and selling of solar mounting structure and its accessories. Consequently, both segments contribute to revenue from contract services and sales of goods, as reflected in the financial statements and related notes included elsewhere in this annual report.
| As
of December 31, 2024 | As
of December 31, 2025 | As
of December 31, 2025 | ||||||||||
| By Business Unit | RM | RM | Convenience Translation USD | |||||||||
| Revenue | ||||||||||||
| Large Scale Solar Contract Services | 50,641,696 | 72,650,408 | 17,889,784 | |||||||||
| Commercial & Industrial Contract Services | 17,091,509 | 41,405,112 | 10,195,792 | |||||||||
| Large Scale Solar Sales of Goods | 18,223,295 | 1,056,193 | 260,082 | |||||||||
| Commercial & Industrial Sales of Goods | 4,388,088 | 5,585,897 | 1,375,498 | |||||||||
| Total revenue | 90,344,588 | 120,697,610 | 29,721,156 | |||||||||
| Cost of Sales | ||||||||||||
| Large Scale Solar Contract Services | (48,888,238 | ) | (64,473,864 | ) | (15,876,352 | ) | ||||||
| Commercial & Industrial Contract Services | (14,634,333 | ) | (35,791,980 | ) | (8,813,588 | ) | ||||||
| Large Scale Solar Sales of Goods | (16,521,415 | ) | (1,056,193 | ) | (260,082 | ) | ||||||
| Commercial & Industrial Sales of Goods | (4,058,132 | ) | (5,397,474 | ) | (1,329,100 | ) | ||||||
| Total cost of sales | (84,102,118 | ) | (106,719,511 | ) | (26,279,122 | ) | ||||||
| Large Scale Solar Gross profit | 3,455,338 | 8,176,544 | 2,013,432 | |||||||||
| Commercial & Industrial Gross profit | 2,787,132 | 5,801,555 | 1,428,602 | |||||||||
| Total gross profit | 6,242,470 | 13,978,099 | 3,442,034 | |||||||||
| Selling and administrative expenses | (11,734,782 | ) | (15,856,961 | ) | (3,904,694 | ) | ||||||
| Selling and administrative expenses to related parties | (115,419 | ) | (245,796 | ) | (60,526 | ) | ||||||
| Income from operations before income tax | (5,607,731 | ) | (2,124,658 | ) | (523,186 | ) | ||||||
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| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | Variance | |||||||||||||||||
| Total assets | RM | RM | Convenience Translation USD | RM | % | |||||||||||||||
| Large Scale Solar segment | 49,139,582 | 48,822,485 | 12,022,281 | (317,097 | ) | (1 | )% | |||||||||||||
| Commercial & Industrial segment | 33,956,854 | 38,476,543 | 9,474,647 | 4,519,689 | 13 | % | ||||||||||||||
| Total of reportable segments | 83,096,436 | 87,299,027 | 21,496,928 | 4,202,591 | 5 | % | ||||||||||||||
| Corporate and other | 31,195,694 | 102,446,729 | 25,226,972 | 71,251,035 | 228 | % | ||||||||||||||
| Consolidated total assets | 114,292,130 | 189,745,756 | 46,723,900 | 75,453,626 | 66 | % | ||||||||||||||
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | Variance | |||||||||||||||||
| Total liabilities | RM | RM | Convenience Translation USD | RM | % | |||||||||||||||
| Large Scale Solar segment | 21,362,655 | 8,255,741 | 2,032,933 | (13,106,914 | ) | (61 | )% | |||||||||||||
| Commercial & Industrial segment | 29,714,895 | 12,149,110 | 2,991,655 | (17,565,785 | ) | (59 | )% | |||||||||||||
| Total of reportable segments | 51,077,550 | 20,404,851 | 5,024,588 | (30,672,699 | ) | (60 | )% | |||||||||||||
| Corporate and other | 46,093,102 | 139,087,390 | 34,249,543 | 92,994,288 | 202 | % | ||||||||||||||
| Consolidated total liabilities | 97,170,652 | 159,492,241 | 39,274,131 | 62,321,589 | 64 | % | ||||||||||||||
Revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the fiscal year ended December 31, 2024 and 2025. Cost of sales reported above represents direct cost related to each business unit and indirect cost that can’t be segregated into each respective business unit was presented under selling and administrative expenses.
Our gross profit from large scale solar projects increased by RM4,721,206 or approximately 137% from RM3,455,338 for the fiscal year ended 2024 to RM8,176,544 (USD2,013,432) for the fiscal year 2025. The significant increase was due to the delivery of several large-scale solar projects during the fiscal year.
Our gross profit from commercial and industrial projects experienced an increase by RM3,014,423 or approximately 108% from RM2,787,132 to RM5,801,555 (USD1,428,602) for the fiscal year 2025. The increase was due to securing and execution new rooftop solar projects and increase in number of on-going projects throughout the fiscal year. The profit margin remained consistent as compared to the previous fiscal year.
The total assets for our large-scale solar segment decreased by RM317,097 or approximately 1% from RM49,139,582 for the fiscal year ended 2024 to RM48,822,485 (USD12,022,281) for the fiscal year 2025. The decrease was mainly due to a decrease in such segment’s receivables due to collection received from customer.
The total assets for our commercial and industrial segment increased significantly by RM4,519,689 or approximately 13% from RM33,956,854 for the fiscal year ended 2024 to RM38,476,543 (USD9,474,647) for the fiscal year 2025. The significant increase was mainly due to an increase in such segment’s plant and equipment due to the expansion of asset development. The increase was attributed to the acquisition of multiple rooftop solar assets with the successful commissioning of these long-term solar assets.
The total assets for our corporate and other segment increased by RM71,251,035 or approximately 228% from RM31,195,694 for the fiscal year ended 2024 to RM102,446,729 (USD25,226,972) for the fiscal year 2025. The increase was due to an increase in cash and bank balances from the proceeds of fund raising activities.
The total liabilities for our large-scale solar segment decreased by RM13,106,914 or approximately 61% from RM21,362,655 for the fiscal year ended 2024 to RM8,255,741 (USD2,032,933) for the fiscal year 2025. The decrease was mainly due to a decrease in such segment’s trade payables which as a result of repayment made to our trade payables.
The total liabilities for our commercial and industrial segment decreased by RM17,565,785 or approximately 59% from RM29,714,895 for the fiscal year ended 2024 to RM12,149,110 (USD2,991,655) for the fiscal year ended 2025. The decrease was due to the decrease in other payables, where full purchase consideration for the acquisition of rooftop solar assets has been paid during the fiscal year.
The total liabilities for our corporate and other segment increased by RM92,994,288 or approximately 202% from RM46,093,102 for the fiscal year ended 2024 to RM139,087,390 (USD34,249,543) for the fiscal year 2025. The increase was mainly due to an increase in cash and bank balances resulting from the fund raising activity.
49
Comparison of Results of Operations for the Fiscal Years Ended December 31, 2023 and 2024
Revenue
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2024 | Variance | |||||||||||||||||||||||||
| RM | % of total revenue | RM | % of total revenue | USD | RM | % | ||||||||||||||||||||||
| Large-scale solar projects | 131,988,574 | 89 | % | 68,864,991 | 76 | % | 15,387,105 | (63,123,583 | ) | (48 | )% | |||||||||||||||||
| Commercial and Industrial projects | 16,065,399 | 11 | % | 21,479,597 | 24 | % | 4,799,374 | 5,414,198 | 34 | % | ||||||||||||||||||
| 148,053,973 | 100 | % | 90,344,588 | 100 | % | 20,186,479 | (57,709,385 | ) | (39 | )% | ||||||||||||||||||
Revenue for the year ended December 31, 2024 was RM90,344,588 (USD20,186,479) representing a decrease of 39% from RM148,053,973 for the fiscal year ended December 31, 2023. The decrease in revenue was mainly driven by lower contribution from large-scale solar projects. The delay in the commencement of large-scale contracts secured during the financial year contributed to the revenue decrease. However, construction for these projects have commenced in year 2025.
Our revenue generated from large-scale solar projects decreased by RM63,123,583 or approximately 48% from RM131,988,574 for the fiscal year ended 2023 to RM68,864,991 (USD15,387,105) for the fiscal year 2024. The decrease was due to the completion of several large-scale solar projects secured in the previous fiscal year. Additionally, delays in the commencement of newly secured large-scale solar projects in fiscal year 2024 further contributed to the decrease.
Our revenue generated from commercial and industrial projects increased by RM5,414,198, or approximately 34% from RM16,065,399 to RM21,479,597 (USD4,799,374) for the fiscal year 2024. The increase was due to securing several rooftop solar projects and increase in number of on-going projects during the fiscal year.
Cost of Sales
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2024 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Material Cost | 54,245,611 | 27,348,569 | 6,110,729 | (26,897,042 | ) | (50 | )% | |||||||||||||
| Construction Cost | 65,513,217 | 47,319,827 | 10,573,081 | (18,193,390 | ) | (28 | )% | |||||||||||||
| Staff Cost | 3,620,080 | 4,482,351 | 1,001,531 | 862,271 | 24 | % | ||||||||||||||
| Logistic Cost | 1,287,926 | 1,382,209 | 308,839 | 94,283 | 7 | % | ||||||||||||||
| Tools & Machinery | 498,672 | 242,645 | 54,216 | (256,027 | ) | (51 | )% | |||||||||||||
| Miscellaneous | 5,014,568 | 2,910,139 | 650,238 | (2,104,429 | ) | (42 | )% | |||||||||||||
| Depreciation | 20,952 | 416,378 | 93,035 | 395,426 | 1887 | % | ||||||||||||||
| Total cost of sale | 130,201,026 | 84,102,118 | 18,791,669 | (46,098,908 | ) | (35 | )% | |||||||||||||
Cost of sales represents our cost incurred in constructing projects, purchasing materials, specific staff costs and other project-related costs incurred for identifiable projects.
The decrease in cost of sales aligned with the overall decrease in revenue, primarily due to the completion of large-scale solar projects from the previous fiscal year and delays in the commencement of newly secured large-scale solar projects. This decrease reflects lower project execution activities during the year, resulting in a decrease in most costs. While staff costs and depreciation increased to maintain the workforce and acquiring assets in anticipation of resumed construction in year 2025.
The material cost for the fiscal year ended December 31, 2024 was RM27,348,569 (USD6,110,729), representing a decrease of 50%, from RM54,245,611 for the fiscal year ended December 31, 2023. The decrease was consistent with the decrease in our revenue mainly due to the decrease in sales of goods and lesser active large-scale solar project, leading to reduced procurement of solar panels, mounting structures and other key materials.
The construction cost for the fiscal year ended December 31, 2024 was RM47,319,827 (USD10,573,081), representing a decrease of 28%, from RM65,513,217 for the fiscal year ended December 31,2023. The decrease was in line with the decrease in our revenue from executing large-sized contracts, resulted in lower subcontractor costs incurred.
The staff costs for the fiscal year ended December 31, 2024 was RM4,482,351 (USD1,001,531), representing an increase of 24%, from RM3,620,080 for the fiscal year ended December 31, 2023. The increase was due to the expansion of our operation team to execute large-scale projects secured in the previous fiscal year and during the year, aligned with an increase in our number of full-time employees.
50
The logistic costs for the fiscal year ended December 31, 2024 was RM1,382,209 (USD308,839), representing an increase of 7%, from RM1,287,926 for fiscal year ended December 31, 2023. The increase was due to the higher rental expenses for company vehicles used for site travel and increased warehouse storage costs to maintain a high inventory level for upcoming projects.
The tools and machinery for fiscal year ended December 31, 2024 was RM242,645 (USD54,216), representing a decrease of 51%, from RM498,672 for the fiscal year ended December 2023. The decrease was due to a decrease in upkeep of machinery, small tools and hardware as most of the large-scale projects were completed during the financial year.
The miscellaneous for fiscal year ended December 31, 2024 was RM2,910,139 (USD650,238), representing a decrease of 42%, from RM5,014,568 for the fiscal year ended December 2023. The decrease was due to a decrease in rental of heavy machinery and equipment as most of the large-scale projects were completed during the financial year.
The depreciation for fiscal year ended December 31, 2024 was RM416,378 (USD93,035), representing a significant increase of 1887%, from RM20,952 for the fiscal year ended December 2023. The increase was due to Founder Assets invested in rooftop solar assets and the successful commissioning of these long-term solar assets, which commenced power generation during the financial year.
Selling and Administrative Expenses
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2024 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Audit fees | 75,140 | 731,900 | 163,535 | 656,760 | 874 | |||||||||||||||
| Stamp duty | 180,914 | 85,838 | 19,180 | (95,076 | ) | (53 | ) | |||||||||||||
| Bank charges | 43,846 | 25,999 | 5,809 | (17,847 | ) | (41 | ) | |||||||||||||
| Insurance premiums | 155,238 | 362,328 | 80,958 | 207,090 | 133 | |||||||||||||||
| Information and Communication Technology subscription | 84,300 | 105,798 | 23,639 | 21,498 | 26 | |||||||||||||||
| Management fees | 102,109 | 111,836 | 24,988 | 9,727 | 10 | |||||||||||||||
| Loss on foreign exchange | 360,799 | 1,312,086 | 293,171 | 951,287 | 264 | |||||||||||||||
| Depreciation | 302,231 | 355,596 | 79,455 | 53,365 | 18 | |||||||||||||||
| Directors’ fee, salaries and other related expenses | 608,991 | 1,051,266 | 234,894 | 442,275 | 73 | |||||||||||||||
| Employee benefits expenses | 2,624,668 | 3,511,965 | 784,709 | 887,297 | 34 | |||||||||||||||
| Impairment losses on contract assets | 296,776 | 2,372,132 | 530,026 | 2,075,356 | 699 | |||||||||||||||
| Impairment losses on trade receivables | - | 552,875 | 123,534 | 552,875 | 100 | |||||||||||||||
| Other expenses | 1,863,635 | 1,270,582 | 283,896 | (593,053 | ) | (32 | ) | |||||||||||||
| 6,698,647 | 11,850,201 | 2,647,794 | 5,151,554 | 77 | ||||||||||||||||
Selling and administrative expenses mainly comprise of employee benefits expenses, directors’ fee, impairment losses on trade receivables and contract assets, loss on foreign exchange, consultancy fees, legal and professional fees and audit fees and other administrative expenses. The selling and administrative expenses increased significantly by 5,151,554 (USD1,151,057), or approximately 77%, from RM6,698,647 in fiscal year 2023 to RM11,850,201 (USD2,647,794) in fiscal year 2024. The increase was mainly attributable to the following reasons:
Insurance premiums paid for fiscal year ended December 31, 2024 was RM362,328 (USD80,958), representing an increase of 133% from RM155,238 in fiscal year ended December 31, 2023. The increase in insurance premiums was mainly due to the increase in headcounts and assets under insured.
ICT subscription paid for fiscal year ended December 31, 2024 was RM105,798 (USD23,639), representing increase of 26% from RM84,300 for fiscal year ended December 31, 2023. The increase in ICT subscription was due to the more subscription on accounting and project-related software, as well as computer software during the year.
Management fees paid for fiscal year ended December 31, 2024 was RM111,836 (USD24,988), representing an increase of 10%, from RM102,109 in fiscal year ended December 31, 2023. The slight increase in management fees was due to the annual revision of management fees by our holding company.
Loss on foreign exchange incurred for fiscal year ended December 31, 2024 was RM1,312,086 (USD293,171), representing an increase of 264%, from RM360,799 in fiscal year ended December 31, 2023. The significant increase in both realized and unrealized loss of foreign exchange was due to ongoing weakening of RM against foreign currencies, particularly the USD and CNY, impacting both trade and non-trade transactions.
51
Depreciation of plant and equipment and right-of-use assets incurred for fiscal year ended December 31, 2024 was RM355,596 (USD79,455), representing an increase of 18%, from RM302,231 in fiscal year ended December 31, 2023. The increase was primarily attributable to the acquisition of additional fixed assets, including office renovation for our newly leased office and motor vehicle.
Impairment losses on contract assets incurred for fiscal year ended December 31, 2024 was RM2,372,132 (USD530,026), representing an increase of 699%, from RM296,776 in fiscal year ended December 31, 2023. The significant increase in impairment losses on contract assets was due to the provision made for a large-scale solar project. The Company is having ongoing negotiation with the customer to conclude the final billing for this project.
Impairment losses on trade receivables incurred for fiscal year ended December 31, 2024 was RM552,875 (USD123,534). The increase in impairment losses on trade receivables mainly due to the provision made for a receivable for a specific project.
Other selling and administrative expenses mainly consist of legal and professional fees, back-charged expenses from customer, project tender fees, entertainment expenses, office expenses and travelling expenses. The legal and professional fees mainly comprise of one-off expenses related to the IPO exercise, including but not limited to legal and consultancy fees, accountants’ fees, investor relations consultant’s fees and other associated costs.
Employee Benefits Expenses
| For the year ended December 31, 2023 | For the year ended December 31, 2024 | For the year ended December 31, 2024 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Directors’ fees | - | 212,633 | 47,510 | 212,633 | 100 | |||||||||||||||
| Directors’ salaries | 427,875 | 556,692 | 124,387 | 128,817 | 30 | |||||||||||||||
| Admin salaries | 1,837,873 | 2,261,769 | 505,367 | 423,896 | 23 | |||||||||||||||
| Technical staff salaries | 2,462,096 | 3,036,224 | 678,410 | 574,128 | 23 | |||||||||||||||
| Total | 4,727,844 | 6,067,318 | 1,355,674 | 1,339,474 | 28 | |||||||||||||||
| For the year ended December 31, 2023 | For the year ended December 31, 2024 | For the year ended December 31, 2024 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Director related expenses | 181,116 | 281,941 | 62,997 | 100,825 | 56 | |||||||||||||||
| Admin related expenses | 786,795 | 1,250,196 | 279,342 | 463,401 | 59 | |||||||||||||||
| Technical staff related expenses | 1,182,943 | 1,449,449 | 323,863 | 266,506 | 23 | |||||||||||||||
| Total | 2,150,854 | 2,981,586 | 666,202 | 830,732 | 39 | |||||||||||||||
Our employee benefit expenses for fiscal year ended December 31, 2024 were RM7,997,638 (USD1,786,982), representing an increase of 28%, from RM6,269,707 for the fiscal year ended December 2023. The increase was due to the increase in number of staff employed in fiscal year ended December 31, 2024 of 82 from 45 for fiscal year ended December 31, 2023 to support the company’s business expansion.
Directors’ fees, salaries and director related expenses paid for fiscal year ended December 31, 2024 was RM1,051,266 (USD234,894), representing an increase of 73%, from RM608,991 in fiscal year ended December 31, 2023. The significant increase was mainly due to the increased in the number of Directors appointed to ensure compliance with regulatory requirements following the IPO exercise. Furthermore, Directors’ salaries have been revised during the financial year to account for the Directors’ increased responsibilities and duties.
52
Other Income
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2024 | Variance | |||||||||||||||||
| RM | RM | USD | RM | % | ||||||||||||||||
| Interest income | 47,255 | 102,605 | 22,926 | 55,350 | 117 | |||||||||||||||
| Realized gain on foreign exchange | 5,421 | 862,011 | 192,607 | 856,590 | 15801 | |||||||||||||||
| Unrealized gain on foreign exchange | (15,417 | ) | 242,589 | 54,204 | 258,006 | (1674 | ) | |||||||||||||
| Discount received | 4,860 | - | - | (4,860 | ) | (100 | ) | |||||||||||||
| Income from secondment of staff | 93,310 | 86,864 | 19,409 | (6,446 | ) | (7 | ) | |||||||||||||
| Income from tender preparation | - | 73,254 | 16,367 | 73,254 | 100 | |||||||||||||||
| Back-charged costs to subcontractors | - | 642,638 | 143,590 | 642,638 | 100 | |||||||||||||||
| Others | 4,991 | 13,918 | 3,110 | 8927 | 179 | |||||||||||||||
| 140,420 | 2,023,879 | 452,213 | 1,883,459 | 1341 | ||||||||||||||||
Other income mainly derived from income from realized and unrealized gain on foreign exchange, back-charged costs to subcontractors, secondment of staff and interest income.
In the fiscal year 2023, our other income primarily consists of interest income and income from secondment of staff. The interest income derived from fixed deposits placed with financial institutions and the income from secondment of staff related to the monthly reimbursement of employee’s salary seconded to our largest shareholder, Reservoir Link Energy Bhd.
In the fiscal year 2024, our other income primarily consists of realized and unrealized gain on foreign exchange, interest income and income from secondment of staff. The realized and unrealized gains on foreign exchange were a result of the MYR appreciating against the Chinese Renminbi and United States Dollar from the invoice date to the year’s end on December 31, 2024. The cost back-charged to subcontractors include project-related costs necessary for the execution of works under their respective scopes. The interest income was earned from fixed deposits placed with financial institutions and the income from secondment of staff is similar with the reimbursement charged in the fiscal year 2023.
Finance Cost
Finance cost is mainly derived from interest expenses charged by financial institutions on working capital financing under banking facilities and interest expenses charged by our holding company for advances.
Interest expenses for the fiscal year ended December 31, 2024 were RM2,066,597 (USD461,758), representing an increase of 38%, from RM1,501,573 in the fiscal year ended December 31, 2023. The increase in interest expenses was due to the increase in utilization of term loan and trade financing from financial institutions and advances received from our holding company to cater for the increase in working capital requirement as a result of our business expansion.
Income Tax
Our current taxation decreased from RM2,646,079 for the fiscal year ended December 31, 2023 to income tax benefit of RM500,444 (USD111,818) for the fiscal year ended December 31, 2024 due to a decrease of 119% in taxable income, as the company incurred a loss during the financial year. For the subsidiaries that are incorporated in Malaysia, they are governed by the income tax laws of Malaysia. The income tax provision in respect of operations in Malaysia is calculated at the applicable tax rates of 24% (2023: 24%) on the taxable income for the fiscal year ended December 31, 2024.
53
Segment Operation
The group reporting is organized and managed in two major business units. All of our revenue is derived from one segment country which is in Malaysia.
The reportable segments are summarized as follows:
| i) | Large-scale solar - Large-scale solar projects are utility scale solar PV power plants with installed generating capacity of 1 MWac or more. Large-scale solar projects are ground mounted and are designed to supply power to the power grid. For the majority of our large-scale solar projects, we usually act as the contractor to the project awarder, who is the main contractor for a solar project. |
| ii) | Commercial & Industrial - C&I projects are smaller scale solar projects where the solar PV systems are installed on rooftops and are designed to generate electricity for commercial and industrial properties for their own consumption, such as factories, warehouses and commercial stores. For C&I projects, we usually sign a service contract with the project owner and act as the main contractor. |
Revenue from contract services primarily involved in project execution, including construction, installation and integration works, testing and commissioning of our solar projects. Revenue from sales of goods involved in supply and selling of solar mounting structure and its accessories. Consequently, both segments contribute to revenue from contract services and sales of goods, as reflected in the financial statements and related notes included elsewhere in this annual report.
| As
of December 31, 2023 | As
of December 31, 2024 | As
of December 31, 2024 | ||||||||||
| By Business Unit | RM | RM | Convenience Translation USD | |||||||||
| Revenue | ||||||||||||
| Large Scale Solar Contract Services | 100,377,899 | 50,641,696 | 11,315,315 | |||||||||
| Commercial & Industrial Contract Services | 12,289,223 | 17,091,509 | 3,818,905 | |||||||||
| Large Scale Solar Sales of Goods | 31,610,675 | 18,223,295 | 4,071,790 | |||||||||
| Commercial & Industrial Sales of Goods | 3,776,176 | 4,388,088 | 980,469 | |||||||||
| Total revenue | 148,053,973 | 90,344,588 | 20,186,479 | |||||||||
| Cost of Sales | ||||||||||||
| Large Scale Solar Contract Services | (87,239,254 | ) | (48,888,238 | ) | (10,923,525 | ) | ||||||
| Commercial & Industrial Contract Services | (10,880,570 | ) | (14,634,333 | ) | (3,269,877 | ) | ||||||
| Large Scale Solar Sales of Goods | (28,926,094 | ) | (16,521,415 | ) | (3,691,523 | ) | ||||||
| Commercial & Industrial Sales of Goods | (3,155,108 | ) | (4,058,132 | ) | (906,744 | ) | ||||||
| Total cost of sales | (130,201,026 | ) | (84,102,118 | ) | (18,791,669 | ) | ||||||
| Large Scale Solar Gross profit | 15,823,226 | 3,455,338 | 772,057 | |||||||||
| Commercial & Industrial Gross profit | 2,029,721 | 2,787,132 | 622,753 | |||||||||
| Total gross profit | 17,852,947 | 6,242,470 | 1,394,810 | |||||||||
| Selling and administrative expenses | (6,596,538 | ) | (11,734,782 | ) | (2,622,005 | ) | ||||||
| Selling and administrative expenses to related parties | (102,109 | ) | (115,419 | ) | (25,789 | ) | ||||||
| Income from operations before income tax | 11,154,300 | (5,607,731 | ) | (1,252,984 | ) | |||||||
54
Segment Operation
The group reporting is organized and managed in two major business units. All of our revenue is derived from one segment country which is in Malaysia.
The reportable segments are summarized as follows:
| i) | Large-scale solar - Large-scale solar projects are utility scale solar PV power plants with installed generating capacity of 1 MWac or more. Large-scale solar projects are ground mounted and are designed to supply power to the power grid. For the majority of our large-scale solar projects, we usually act as the contractor to the project awarder, who is the main contractor for a solar project. |
| ii) | Commercial & Industrial - C&I projects are smaller scale solar projects where the solar PV systems are installed on rooftops and are designed to generate electricity for commercial and industrial properties for their own consumption, such as factories, warehouses and commercial stores. For C&I projects, we usually sign a service contract with the project owner and act as the main contractor. |
Revenue from contract services primarily involved in project execution, including construction, installation and integration works, testing and commissioning of our solar projects. Revenue from sales of goods involved in supply and selling of solar mounting structure and its accessories. Consequently, both segments contribute to revenue from contract services and sales of goods, as reflected in the financial statements and related notes included elsewhere in this annual report.
| As
of December 31, 2023 | As
of December 31, 2024 | As
of December 31, 2024 | ||||||||||
| By Business Unit | RM | RM | Convenience Translation USD | |||||||||
| Revenue | ||||||||||||
| Large Scale Solar Contract Services | 100,377,899 | 50,641,696 | 11,315,315 | |||||||||
| Commercial & Industrial Contract Services | 12,289,223 | 17,091,509 | 3,818,905 | |||||||||
| Large Scale Solar Sales of Goods | 31,610,675 | 18,223,295 | 4,071,790 | |||||||||
| Commercial & Industrial Sales of Goods | 3,776,176 | 4,388,088 | 980,469 | |||||||||
| Total revenue | 148,053,973 | 90,344,588 | 20,186,479 | |||||||||
| Cost of Sales | ||||||||||||
| Large Scale Solar Contract Services | (87,239,254 | ) | (48,888,238 | ) | (10,923,525 | ) | ||||||
| Commercial & Industrial Contract Services | (10,880,570 | ) | (14,634,333 | ) | (3,269,877 | ) | ||||||
| Large Scale Solar Sales of Goods | (28,926,094 | ) | (16,521,415 | ) | (3,691,523 | ) | ||||||
| Commercial & Industrial Sales of Goods | (3,155,108 | ) | (4,058,132 | ) | (906,744 | ) | ||||||
| Total cost of sales | (130,201,026 | ) | (84,102,118 | ) | (18,791,669 | ) | ||||||
| Large Scale Solar Gross profit | 15,823,226 | 3,455,338 | 772,057 | |||||||||
| Commercial & Industrial Gross profit | 2,029,721 | 2,787,132 | 622,753 | |||||||||
| Total gross profit | 17,852,947 | 6,242,470 | 1,394,810 | |||||||||
| Selling and administrative expenses | (6,596,538 | ) | (11,734,782 | ) | (2,622,005 | ) | ||||||
| Selling and administrative expenses to related parties | (102,109 | ) | (115,419 | ) | (25,789 | ) | ||||||
| Income from operations before income tax | 11,154,300 | (5,607,731 | ) | (1,252,984 | ) | |||||||
55
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2024 | Variance | |||||||||||||||||
| Total assets | RM | RM | Convenience Translation USD | RM | % | |||||||||||||||
| Large Scale Solar segment | 60,580,358 | 49,139,582 | 10,979,685 | (11,440,776 | ) | (19 | ) | |||||||||||||
| Commercial & Industrial segment | 12,553,577 | 33,956,854 | 7,587,277 | 21,403,277 | 170 | |||||||||||||||
| Total of reportable segments | 73,133,935 | 83,096,436 | 18,566,962 | 9,962,501 | 14 | |||||||||||||||
| Corporate and other | 10,739,584 | 31,195,694 | 6,970,326 | 20,456,110 | 190 | |||||||||||||||
| Consolidated total assets | 83,873,519 | 114,292,130 | 25,537,288 | 30,418,611 | 36 | |||||||||||||||
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2024 | Variance | |||||||||||||||||
| Total liabilities | RM | RM | Convenience Translation USD | RM | % | |||||||||||||||
| Large Scale Solar segment | 33,875,532 | 21,362,655 | 4,773,245 | (12,512,877 | ) | (37 | ) | |||||||||||||
| Commercial & Industrial segment | 4,543,341 | 29,714,895 | 6,639,458 | 25,171,554 | 554 | |||||||||||||||
| Total of reportable segments | 38,418,873 | 51,077,550 | 11,412,703 | 12,658,677 | 33 | |||||||||||||||
| Corporate and other | 30,664,984 | 46,093,102 | 10,298,984 | 15,428,118 | 50 | |||||||||||||||
| Consolidated total liabilities | 69,083,857 | 97,170,652 | 21,711,687 | 28,086,795 | 41 | |||||||||||||||
Revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the fiscal year ended December 31, 2023 and 2024. Cost of sales reported above represents direct cost related to each business unit and indirect cost that can’t be segregated into each respective business unit was presented under selling and administrative expenses.
Our gross profit from large scale solar projects decreased by RM12,367,888 or approximately 78% from RM15,823,226 for the fiscal year ended 2023 to RM3,455,338 (USD772,057) for the fiscal year 2024. The significant decrease was due to the completion of several large-scale solar projects secured in the previous fiscal year with lower profit margins. The lower margins were a result of lower project execution activities during the year. Despite the slowdown, the Company has continued to maintain its overhead costs in anticipation of increased construction activities expected to resume in year 2025, following delays in the implementation of large-scale solar projects in year 2024.
Our gross profit from commercial and industrial projects experienced an increase by RM757,411 or approximately 37% from RM2,029,721 to RM2,787,132 (USD622,753) for the fiscal year 2024. The increase was due to securing and execution new rooftop solar projects and increase in number of on-going projects throughout the fiscal year. The profit margin remained consistent as compared to the previous fiscal year.
The total assets for our large-scale solar segment decreased by RM11,440,776 or approximately 19% from RM60,580,358 for the fiscal year ended 2023 to RM49,139,582 (USD10,979,685) for the fiscal year 2024. The decrease was mainly due to a decrease in such segment’s contract assets which is in line with the decrease in revenue for our large-scale solar segment.
The total assets for our commercial and industrial segment increased significantly by RM21,403,277 or approximately 170% from RM12,553,577 for the fiscal year ended 2023 to RM33,956,854 (USD7,587,277) for the fiscal year 2024. The significant increase was mainly due to an increase in such segment’s plant and equipment due to the expansion of asset development. The increase was attributed to the acquisition of multiple rooftop solar assets with the successful commissioning of these long-term solar assets.
The total assets for our corporate and other segment increased by RM20,456,110 or approximately 190% from RM10,739,584 for the fiscal year ended 2023 to RM31,195,694 (USD6,970,326) for the fiscal year 2024. The increase was due to an increase in cash and bank balances from the proceeds of initial public offering.
The total liabilities for our large-scale solar segment decreased by RM12,512,877 or approximately 37% from RM33,875,532 for the fiscal year ended 2023 to RM21,362,655 (USD4,773,245) for the fiscal year 2024. The decrease was mainly due to a decrease in such segment’s trade payables which is in line with the decrease in cost of sales for our large-scale solar segment.
The total liabilities for our commercial and industrial segment increased drastically by RM25,171,554 or approximately 554% from RM4,543,341 for the fiscal year ended 2023 to RM29,714,895 (USD6,639,458) for the fiscal year ended 2024. The increase was due to the increase in other payables, mainly attributable to the unpaid purchase consideration for the acquisition of rooftop solar assets.
The total liabilities for our corporate and other segment increased by RM15,428,118 or approximately 50% from RM30,664,984 for the fiscal year ended 2023 to RM46,093,102 (USD10,298,984) for the fiscal year 2024. The increase was mainly due to an increase in bank and other borrowings as a result of utilization of working capital financing from financial institutions. Additionally, there was an increase in other payables due to the unpaid consultancy fees relating to the IPO exercise.
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Discussion on Certain Key Items on the Consolidated Statement of Financial Position
| Note | 2024 | 2025 | 2025 | |||||||||||||
| RM | RM | USD | ||||||||||||||
| ASSETS | ||||||||||||||||
| Non-current assets | ||||||||||||||||
| Plant and equipment | 4 | 26,582,995 | 22,012,303 | 5,420,414 | ||||||||||||
| Right-of-use assets | 5 | 739,244 | 687,863 | 169,383 | ||||||||||||
| Investment in an associate | 6 | — | 1,923,775 | 473,020 | ||||||||||||
| Trade receivables | 7 | 2,478,739 | 1,508,742 | 371,520 | ||||||||||||
| Deferred tax asset | 8 | 74,000 | 175,810 | 43,292 | ||||||||||||
| Total non-current assets | 29,874,978 | 26,308,493 | 6,478,329 | |||||||||||||
| Current assets | ||||||||||||||||
| Cash and bank balances | 13,901,973 | 80,243,158 | 19,759,458 | |||||||||||||
| Inventories | 9 | 3,049,405 | 2,457,916 | 605,249 | ||||||||||||
| Trade receivables | 7 | 18,794,355 | 19,411,022 | 4,779,863 | ||||||||||||
| Contract assets | 10 | 32,547,589 | 41,440,035 | 10,204,392 | ||||||||||||
| Other receivables and prepayment (Including RM1,352,792 (USD 333,118) and RM Nil to related party as of December 31, 2025 and 2024 respectively) | 11 | 12,944,794 | 17,430,594 | 4,292,193 | ||||||||||||
| Amount due from related parties | 12 | 2,420,493 | 2,457,382 | 605,117 | ||||||||||||
| Income tax receivable | 8 | 758,543 | - | - | ||||||||||||
| Total current assets | 84,417,152 | 163,440,107 | 40,246,272 | |||||||||||||
| Total assets | 114,292,130 | 189,748,600 | 46,724,601 | |||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||
| Current liabilities | ||||||||||||||||
| Trade payables | 7 | 27,396,814 | 18,315,260 | 4,510,037 | ||||||||||||
| Other payables and accrued liabilities | 11 | 31,816,499 | 8,951,463 | 2,204,251 | ||||||||||||
| Convertible securities payable | 13 | — | 64,170,406 | 15,801,627 | ||||||||||||
| Bank and other borrowings | 14 | 32,940,381 | 45,626,825 | 11,235,366 | ||||||||||||
| Lease liabilities | 5 | 276,524 | 431,946 | 106,364 | ||||||||||||
| Amount due to related parties | 12 | 2,168,066 | 3,901,595 | 960,747 | ||||||||||||
| Income tax payable | 8 | 1,597 | 104,021 | 25,615 | ||||||||||||
| Total current liabilities | 94,599,881 | 141,501,516 | 34,844,007 | |||||||||||||
| Non-current liabilities | ||||||||||||||||
| Lease liabilities | 5 | 471,295 | 276,683 | 68,133 | ||||||||||||
| Bank and other borrowings | 14 | 2,099,476 | 17,714,042 | 4,361,991 | ||||||||||||
| Total non-current labilities | 2,570,771 | 17,990,725 | 4,430,124 | |||||||||||||
| Total liabilities | 97,170,652 | 159,492,241 | 39,274,131 | |||||||||||||
| Capital and reserves | ||||||||||||||||
| Share capital | 15 | 7,425,257 | 28,941,506 | 7,126,694 | ||||||||||||
| Reserves | 16 | 1,704,989 | 1,704,989 | 419,845 | ||||||||||||
| Retained earnings | 7,859,024 | 95,920 | 23,620 | |||||||||||||
| Other comprehensive income/(loss) | 132,208 | (486,057 | ) | (119,689 | ) | |||||||||||
| Attributable to equity owners of the Company | 17,121,478 | 30,256,358 | 7,450,470 | |||||||||||||
| Non-controlling interests | — | 1 | — | |||||||||||||
| Total equity | 17,121,478 | 30,256,359 | 7,450,470 | |||||||||||||
| Total liabilities and equity | 114,292,130 | 189,748,600 | 46,724,601 | |||||||||||||
57
Contract Assets and Contract Liabilities
| As of December 31, 2024 |
As of December 31, 2025 |
As of December 31, 2025 |
||||||||||
| RM | RM | USD | ||||||||||
| Contract Assets | ||||||||||||
| Contract cost | 189,071,858 | 285,872,146 | 70,394,520 | |||||||||
| Contract margin | 24,840,605 | 41,836,852 | 10,302,106 | |||||||||
| Contract revenue recognized | 213,912,463 | 327,708,998 | 80,696,626 | |||||||||
| Less: Bill to trade receivables | (180,008,528 | ) | (286,591,376 | ) | (70,571,627 | |||||||
| Contract assets carried forward | 33,903,935 | 41,117,622 | 10,124,999 | |||||||||
| Contract cost assets | - | - | - | |||||||||
| Less: Provision for impairment loss | (2,668,908 | ) | - | - | ||||||||
| Add: Accrued revenue | 1,312,562 | 322,413 | 79,393 | |||||||||
| Balance carried forward | 32,547,589 | 41,440,035 | 10,204,392 | |||||||||
| Decrease/(Increase) in contract assets | 18,445,458 | (8,892,446 | ) | (2,189,718 | ) | |||||||
| (Increase)/Decrease in provision for impairment loss | (2,372,132 | ) |
2,668,908 |
657,205 |
||||||||
The contract assets primarily relate to our right to consideration for work completed on contracts but not yet billed as at the reporting date. The amount will be transferred to trade receivables when our Company issues billings in the manner as established in the contracts with customers.
The contract assets increased to RM41,440,035 (USD10,204,392) as of December 31, 2025, representing increase of 27% from RM32,547,589 in fiscal year ended December 31, 2024, which is aligns with the increase in our revenue and number of ongoing large-scale solar projects undertaken during the fiscal year.
Trade and Other Receivables
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | USD | ||||||||||
| Trade receivables | ||||||||||||
| Non-Current | ||||||||||||
| Project retention receivables | 2,478,739 | 1,508,742 | 371,520 | |||||||||
| Current | ||||||||||||
| Trade receivables | 16,195,071 | 19,340,447 | 4,762,484 | |||||||||
| Project retention receivables | 1,168,425 | 1,482,191 | 364,982 | |||||||||
| Accrued liquidated ascertained damages to sub-Contractors | 2,011,284 | 831,373 | 204,721 | |||||||||
| Less: Provision for expected credit loss | (580,425 | ) | (2,242,989 | ) | (552,324 | ) | ||||||
| Total current trade receivables | 18,794,355 | 19,411,022 | 4,779,863 | |||||||||
| Total trade receivables | 21,273,094 | 20,919,764 | 5,151,383 | |||||||||
| Increase in total trade receivables | 5,371,214 | 1,662,564 | 409,398 | |||||||||
| Increase / (Decrease) in provision for expected credit loss | 552,876 | (353,330 | ) | (87,006 | ) | |||||||
| Other receivables | ||||||||||||
| Project deposits | 323,067 | 1,476,069 | 363,474 | |||||||||
| Prepayment to suppliers | 10,743,527 | 13,289,633 | 3,272,504 | |||||||||
| Other receivables | 240,666 | 60,108 | 14,801 | |||||||||
| Other deposits | 366,513 | 158,271 | 38,973 | |||||||||
| Other prepayments | 1,271,021 | 2,445,802 | 602,266 | |||||||||
| Other current assets | — | 711 | 175 | |||||||||
| Total other receivables | 12,944,794 | 17,430,594 | 4,292,193 | |||||||||
Our dealing with customers is either on cash or credit terms. The customers that deal with our Company on credit terms are generally granted credit terms of 30 days to 90 days. Other credit terms may be negotiated with customers on a case-by-case basis. Included in prepayment to suppliers is related party balance amounting to RM1,352,792 (USD 333,118) (December 31, 2024: RM Nil).
58
The trade receivables decreased from RM21,273,094 as of December 31, 2024 to RM20,919,764 (USD5,151,383) as of December 31, 2025 representing 2% decrease as a result of collection of payment from our trade receivables.
The other receivables increased significantly from RM12,944,794 as of December 31, 2024 to RM17,430,594 (USD4,292,193) as of December 31, 2025 representing 35% increase, mainly due to the increase in prepayment made to suppliers as down payments for sub-contractor works and material purchases to support newly secured large-scale solar projects execution.
Trade and Other Payables
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | USD | ||||||||||
| Trade payables | ||||||||||||
| Trade payables | 25,204,848 | 15,213,238 | 3,746,180 | |||||||||
| Project retention payable | 2,191,966 | 3,102,022 | 763,857 | |||||||||
| Total trade payables | 27,396,814 | 18,315,260 | 4,510,037 | |||||||||
| Decrease in total trade payables | (11,022,059 | ) | (9,081,554 | ) | (2,236,285 | ) | ||||||
| Other payables | ||||||||||||
| Accrued staff cost | 683,062 | 464,136 | 114,291 | |||||||||
| Other payables and accrued expenses | 30,314,506 | 6,406,695 | 1,577,615 | |||||||||
| Prepayment from customer | 818,931 | 2,080,632 | 512,345 | |||||||||
| Total other payables | 31,816,499 | 8,951,463 | 2,204,251 | |||||||||
Our dealing with suppliers is either on cash or credit terms. The suppliers that deal with our Company on credit terms generally grant credit terms of 7 days to 90 days. Other credit terms may be negotiated with suppliers on a case-by-case basis.
The trade payables decreased from RM27,396,814 as of December 31, 2024 to RM18,315,260 (USD4,510,037) as of December 31, 2025, representing a decrease of 33%, which is in line with the decrease in cost of sales, where the value of ongoing project is lower than ongoing project in fiscal year ended December 31, 2024.
The other payables increased significantly from RM31,816,499 as of December 31, 2024 to RM8,951,463 (USD2,204,251) as of December 31, 2025, representing an increase of 72% due to the unpaid balance of the purchase consideration for the acquisition of rooftop solar assets, which remained outstanding at the end of the financial year.
Bank Borrowings
| Capacity | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Line of Credit | ||||||||||||||||
| AmBank Islamic Bank – Domestic Recourse Factoring, at Base Financing Rate – 1% | 10,000,000 | 3,692,949 | 6,686,298 | 1,646,466 | ||||||||||||
| AmBank Islamic Bank – Invoice Financing, at Base Financing Rate | 45,000,000 | 19,502,322 | 24,073,870 | 5,928,065 | ||||||||||||
| AmBank Islamic Bank – Accepted Bills, at Islamic Interbank Discounting Rate + 1.50% | 10,200,000 | 436,269 | — | — | ||||||||||||
| AmBank Islamic Bank – Overdraft, Base Financing Rate +1.0% | 1,000,000 | — | 364,167 | 89,674 | ||||||||||||
| CIMB Islamic Bank – Invoice Financing, at Cost of Funds + 1.5% | 10,000,000 | 6,257,673 | 7,980,612 | 1,965,184 | ||||||||||||
| CIMB Islamic Bank – Overdraft, at Base Financing Rate +0.5% | 500,000 | 460,338 | 374,243 | 92,155 | ||||||||||||
| Maybank Islamic Bank – Invoice Financing, at Cost of Funds + 1.5% | 5,000,000 | 1,363,007 | 4,934,051 | 1,214,984 | ||||||||||||
| Maybank Islamic Bank – Overdraft, at Base Financing Rate +1.0% | 1,000,000 | 1,005,262 | — | — | ||||||||||||
| Sunway SCF Sdn Bhd. – Invoice Factoring | — | — | — | — | ||||||||||||
| AmBank Islamic Bank – Term Financing, at Base Financing Rate – 1% | 1,000,000 | 862,876 | 778,060 | 191,594 | ||||||||||||
| AmBank Islamic Bank – Term Financing, at Base Financing Rate – 1.75% | 9,700,000 | 1,209,161 | 1,150,531 | 283,312 | ||||||||||||
| AmBank Islamic Bank – Term Financing, at Base Financing Rate – 0.75% | 22,000,000 | — | 16,582,547 | 4,083,365 | ||||||||||||
| 115,400,000 | 34,789,857 | 62,924,379 | 15,494,799 | |||||||||||||
| Hire purchase payable | 250,000 | 416,488 | 102,558 | |||||||||||||
| Total bank borrowings | 35,039,857 | 63,340,867 | 15,597,357 | |||||||||||||
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Our bank borrowings increased from RM35,039,857 as of December 31 2024 to RM63,340,867 (USD15,597,357) as of December 31, 2025, representing an increase of 81%. The increase in bank borrowings were due to additional trade financing utilized for working capital purpose to support our ongoing projects and utilization of term loan for financing of investment of solar assets.
B. Liquidity and Capital Resources
Our business requires substantial capital to fund:
| ● | Current operating costs; |
| ● | Potential investment in new renewable energy assets and other new acquisition; |
| ● | Unforeseen events; and |
| ● | Other business expenses. |
We expect to satisfy our capital requirements through a combination of cash on hand, cash flow from operations, borrowings under existing and anticipated future financing arrangements and the issuance of additional equity securities as appropriate and given market conditions. We expect that these sources of funds will be adequate to provide for our short-term and long-term liquidity and capital needs. However, we are subject to business and operational risks that could adversely affect our cash flow. A material decrease in our cash flows would likely produce a corresponding adverse effect on our borrowing capacity.
As a normal part of our business, depending on market conditions, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness. In addition, changes in our operating plans, including lower than anticipated revenues, increased expenses, capital expenditures, acquisitions or other events may cause us to seek additional debt or equity financing in future periods, which may not be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations, additional covenants and operating restrictions. In addition, any of the items discussed in detail under “Item D. Risk Factors” may also significantly impact our liquidity, financial condition and ability to raise additional financing in future periods.
Financing Arrangements
As of December 31, 2025, our Company had obtained revolving credit facilities of RM103.4 million from financial institutions including invoice financing, accepted bill, cash line, term loan, bank guarantee and others that can be utilized for short term working capital needs.
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | USD | ||||||||||
| Maturities | ||||||||||||
| Maturity within 1 year | 32,940,381 | 45,626,825 | 11,235,366 | |||||||||
As of December 31, 2025, we utilized a term loan of RM17.1 million , which carries a 11-year and 12-year repayment term, to finance an investment of solar asset. Apart from the term loan utilized for financing of investment of solar assets and term loan acquired for purchasing keyman insurance for two of our directors, which carries a 10- year repayment term, all other financing facilities secured by our Company have a repayment term of less than 1 year.
We secured a factoring facility of RM10.0 million from AmBank Islamic Bank to finance up to 80% of invoices/certified progress claims under the approved projects of the Company. Further, from the same bank, we secured a facility of up to RM32.1 million where up to RM1.0 million is for the purchase of keyman insurance for our directors and up to RM32.2 million is for the purchase of goods and services in relation to ordinary course of business operations.
Other than Ambank Islamic Bank, we secured a facility of up to RM8.5 million from CIMB Bank Berhad for the purchase of goods and services in relation to the ordinary course of business operations. We also secured a banking facility of up to RM6 million from Maybank Islamic Berhad for working capital requirements and to finance purchases of goods and services related to the business operations. Besides, we secured term financing facilities of up to RM31.7 million to with AmBank Islamic Bank to finance rooftop solar assets.
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Cash Flows Analysis
Cash Flows for the Fiscal Years ended December 31, 2024 and 2025
| For the fiscal years ended December 31, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RM | RM | USD | ||||||||||
| Net cash used in operating activities | (6,127,677 | ) | (41,034,818 | ) | (10,104,608 | ) | ||||||
| Net cash used in investing activities | (5,378,735 | ) | (7,925,792 | ) | (1,951,685 | ) | ||||||
| Net cash provided by financing activities | 13,918,726 | 110,279,414 | 27,155,728 | |||||||||
| Net (decrease)/increase in cash and cash equivalents | 2,412,314 | 61,318,804 | 15,099,435 | |||||||||
| Effect of exchange rate changes | 205,192 | 333,944 | 82,232 | |||||||||
| Cash and cash equivalent at beginning of year | 1,945,602 | 4,563,108 | 1,123,642 | |||||||||
| Cash and cash equivalent at end of year | 4,563,108 | 66,215,856 | 16,305,309 | |||||||||
Operating activities
Net cash used in operating activities in fiscal year 2024 was RM6,127,677, which mainly consists of net loss before income tax for the year of RM5,650,449 and changes in working capital of RM9,459,573. Adjustments for non-cash primarily included impairment loss on contract assets at RM2,372,132, impairment loss on trade receivables at RM552,876 and depreciation of plant equipment and right-of-use assets at RM771,976. The changes in working capital were due to a decrease in contract assets of RM16,073,326 and these are mitigated against the increase in trade and other receivables of RM14,510,840 and a decrease in trade payables of RM11,022,059.
Net cash used in operating activities in fiscal year 2025 was RM41,034,818, which mainly consists of net loss before income tax for the year of RM5,655,686 and changes in working capital of RM40,549,131. Impairment loss on contract assets has reversed amounting RM2,668,908. Adjustments for non-cash primarily included impairment loss on trade receivables at RM2,563,722, reversal of allowance for expected credit losses on trade receivables at RM901,158 and depreciation of plant equipment and right-of-use assets at RM2,288,209. The changes in working capital were due to a decrease in contract assets of RM6,223,538, decrease in trade receivables of RM1,309,234 and other receivables of RM4,485,800 and a decrease in trade payables of RM9,081,554.
Investing activities
Net cash used in investing activities in fiscal year 2024 and 2025 was RM5,378,735 and RM7,925,792 respectively, which were mainly for the purpose of investment in solar asset plants and equipment of RM826,333 and acquisition of an associate of RM1,923,775 respectively and placement of fixed deposit with licensed banks of RM5,415,627.
Financing activities
Net cash generated from financing activities in fiscal year 2024 was RM13,918,726, which was mainly contributed by proceeds from issuance of shares from initial public offering at RM7,355,973, drawdown of bank borrowings of RM8,615,141 for the purpose of financing our ongoing projects.
Net cash generated from financing activities in fiscal year 2025 was RM110,279,414, which was mainly contributed by proceeds from issuance of shares from convertible securities at RM84,895,915, drawdown of bank borrowings of RM28,727,900 for the purpose of financing our ongoing projects.
As of fiscal year ended December 31, 2025, we had RM66,215,856 (USD16,305,309) in cash and bank balances, out of which RM66,954,266 (USD16,487,138) was held as bank balances, and RM13,288,892 (USD3,272,320) was held as fixed deposit.
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Cash Flows for the Fiscal Years ended December 31, 2023 and 2024
| For the fiscal years ended December 31, | ||||||||||||
| 2023 | 2024 | 2024 | ||||||||||
| RM | RM | USD | ||||||||||
| Net cash used in operating activities | (17,184,339 | ) | (6,127,677 | ) | (1,369,162 | ) | ||||||
| Net cash used in investing activities | (4,286,759 | ) | (5,378,735 | ) | (1,201,817 | ) | ||||||
| Net cash provided by financing activities | 15,959,960 | 13,918,726 | 3,109,983 | |||||||||
| Net (decrease)/increase in cash and cash equivalents | (5,511,138 | ) | 2,412,314 | 539,004 | ||||||||
| Effect of exchange rate changes | 787 | 205,192 | 45,848 | |||||||||
| Cash and cash equivalent at beginning of year | 7,455,953 | 1,945,602 | 434,723 | |||||||||
| Cash and cash equivalent at end of year | 1,945,602 | 4,563,108 | 1,019,575 | |||||||||
Operating activities
Net cash used in operating activities in fiscal year 2023 was RM17,184,339, which mainly consists of net profit before income tax for the year of RM9,793,147 and changes in working capital of RM25,100,879. The changes in working capital were due to an increase in contract assets of RM33,005,996, an increase in trade receivables by RM11,922,137 and these are compensated with the increase in trade payables of RM19,827,253.
Net cash used in operating activities in fiscal year 2024 was RM6,127,677, which mainly consists of net loss before income tax for the year of RM5,650,449 and changes in working capital of RM9,459,573. Adjustments for non-cash primarily included impairment loss on contract assets at RM2,372,132, impairment loss on trade receivables at RM552,876 and depreciation of plant equipment and right-of-use assets at RM771,976. The changes in working capital were due to a decrease in contract assets of RM16,073,326 and these are mitigated against the increase in trade and other receivables of RM14,510,840 and a decrease in trade payables of RM11,022,059.
Investing activities
Net cash used in investing activities in fiscal year 2023 and 2024 was RM4,286,759 and RM5,378,735 respectively, which were mainly for the purpose of investment in solar asset plants and purchases of office renovation of RM338,207 and RM652,153 respectively and placement of fixed deposit with licensed banks of RM4,218,720.
Financing activities
Net cash generated from financing activities in fiscal year 2023 was RM15,959,960, which was mainly contributed by drawdown of bank borrowings of RM20,327,604 for financing of our ongoing projects and increase amount due from related parties.
Net cash generated from financing activities in fiscal year 2024 was RM13,918,726, which was mainly contributed by proceeds from issuance of shares from initial public offering at RM7,355,973, drawdown of bank borrowings of RM8,615,141 for the purpose of financing our ongoing projects.
As of fiscal year ended December 31, 2024, we had RM13,901,973 (USD3,106,239) in cash and bank balances, out of which RM12,358,214 (USD 2,761,304) was held in MYR and the rest was held in USD and SGD. Our cash and bank balances consist of bank balances of RM5,915,194 fixed deposit of RM7,873,265 and cash on hand of RM113,514.
62
In year 2024, we entered into Project Acquisition Agreements and Power Purchase Agreements to develop and purchase 12 solar systems which cost us approximately RM23,968,681 (approximately USD5,355,531) as part of our strategy to expand our solar assets ownership portfolio, strengthening our recurring income stream. Information on the Company-B. Business Overview-Our Growth Strategies-Expand Our Investment in Renewable Energy Assets, Such as Solar PV Systems.” We have continued our focus to expand our renewable energy asset portfolio. We do not expect to have sufficient amounts of cash on hand to fund the development of all these projects. We will need to finance a portion of these acquisitions by raising equity or incurring debt. We believe that we will have the access to capital to pursue these opportunities. However, we are subject to business, financial, operational and other risks that could adversely affect our cash flows, result of operations, financial condition and ability to raise capital. A material decrease in our cash flows, deterioration in our financial condition or downturn in the financing and capital markets would likely to have an adverse effect on our ability to make such investments.
C. Research and Development, Patents and Licenses, etc.
See “Item 4. Information on the Company-B. Business Overview-Intellectual Property.”
D. Trend Information
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenue, income from continuing operations, profitability, liquidity, or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
E. Critical Accounting Judgments and Key Sources of Estimation Uncertainty
In preparing our Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRSs) and pursuant to the rules and regulations of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We evaluate our assumptions, judgments and estimates on a regular basis. We also discuss our critical accounting policies and estimates with the Audit Committee of the Board of Directors.
We believe that the assumptions, judgments and estimates involved in the accounting for contract revenue recognition and Impairment of Trade Receivables and Contract Assets have the greatest potential impact on our Consolidated Financial Statements. These areas are key components of our results of operations and are based on complex rules requiring us to make judgments and estimates, and consequently, we consider these to be our critical accounting policies. Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results.
Impairment of Trade Receivables and Contract Assets
The Company uses the simplified approach to estimate a lifetime expected credit loss allowance for all trade receivables and contract assets and there have been no material changes in the underlying assumption. The contract assets are grouped with trade receivables for impairment assessment because they have substantially the same risk characteristics as the trade receivables for the same types of contracts. The Company develops the expected loss rates based on the payment profiles of past sales and the corresponding historical credit losses, and adjusts for qualitative and quantitative reasonable and supportable forward-looking information. If the expectation is different from the estimation, such difference is measured at the present value of all cash shortfalls (i.e., the difference between the cash flows due to us in accordance with the contract and the cashflows that we expect to receive) that will impact the carrying value of trade receivables and contract assets.
Based on the above approach, RM296,776 of expected credit loss allowance for trade receivables has been recorded in the fiscal year ended December 31, 2023. RM552,876 and RM2,372,132 of expected credit loss allowance for trade receivables and contract assets respectively have been recorded in the fiscal year ended December 31, 2024. RM1,662,564 (USD409,398) of expected credit loss allowance on trade receivables and RM2,668,908 (USD657,205) of reversal of impairment loss on contract asset has been recorded in the fiscal year ended December 31, 2025. There are no trade receivables and contract assets written off during the fiscal years ended December 31, 2023, 2024, and 2025. Based on the assessment conducted at reporting date, there are no material evidence that the estimate is reasonably likely to change in the foreseeable future.
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Contract Revenue Recognition
The Company enters into contracts with customers to provide construction services related to renewable energy sectors. Revenue from providing such services is recognized over time measure via input method, determined based on the proportion of costs incurred for work performed to date over the estimated total costs. The estimated total costs derived based on bill of quantities issued by customer and costing information gathered via request for quotations. Transaction price is computed based on the price specified in the contract and adjusted for any variable consideration such as incentives and penalties.
Based on the above approach, the contract revenue recognized in the fiscal years ended December 31, 2023, 2024, and 2025 is RM112,667,122, RM67,733,205, and RM114,055,520 respectively. Based on assessment conducted at reporting date, there are no material evidence that the estimate is reasonable likely to change in the foreseeable future.
Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
| Name | Age | Position(s) | ||
| Lee Seng Chi | 44 | Chief Executive Officer, Director, and Chairman of the Board of Directors | ||
| See Sian Seong | 36 | Chief Financial Officer | ||
| Thien Chiet Chai | 60 | Non-executive Director | ||
| Marco Baccanello | 65 | Independent Director | ||
| Sin Siew Kuen | 75 | Independent Director | ||
| Baharin Bin Din | 64 | Independent Director |
The following is a brief biography of each of our executive officers and directors:
Mr. Lee Seng Chi has served as the Chief Executive Officer of Founder Group and Director and Chairman of the Board of Directors of Founder Group since October 2024. Mr. Lee founded our subsidiary Founder Energy (Malaysia) in 2021 and acted as its Executive Director since inception. Mr. Lee began his career in the engineering and solar industry in 2006 and has held senior leadership positions in multiple engineering companies. Prior to the establishment of Founder Energy (Malaysia), Mr. Lee acted as the Chief Executive Officer for Solar Bina Engineering Sdn. Bhd. (“Solar Bina”), a solar photovoltaic construction company based in Malaysia, from 2015 to 2021. Prior to joining Solar Bina, Mr. Lee held several positions in Micron (M) Sdn. Bhd. (“Micron”), a Malaysian industrial machinery company, from 2010 to 2013. Mr. Lee began his career in Micron as Senior Sales & Marketing Engineer where he was responsible for the Philippines expansion, and subsequently being promoted as Operation Manager for both the Philippines and Malaysia solar market expansion. Previously, Mr. Lee started his engineering career with a semiconductor company, Texas Instruments Malaysia Sdn. Bhd. as Product Test Engineer and Senior Engineer, from 2006 to 2010. Mr. Lee obtained his bachelor’s degree in Engineering in Electronic from Multimedia University, Malaysia. Mr. Lee Seng Chi is qualified as a director of our Company due to his extensive experience in the engineering and solar industry, including senior leadership positions and founding our operating subsidiary Founder Energy (Malaysia).
Mr. See Sian Seong has served as the Chief Financial Officer of Founder Group since October 2024. Mr. See has worked for our subsidiary Founder Energy (Malaysia) since 2021 as the Head of Finance. Prior to that, Mr. See served as the Vice President of Finance for Mattan Engineering Sdn. Bhd. (“Mattan”), a Malaysian company specialized in renewable energy. Mr. See has held positions of increasing responsibility since joining Mattan in 2016, where he first started in Mattan as the Financial Controller. Prior to joining Mattan, Mr. See was an Audit Executive at BDO PLT from 2011 to 2016. Mr. See holds the Professional Certification from the Institute Charted Accountant England and Wales, ICAEW from Sunway University, Malaysia.
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Mr. Thien Chiet Chai has served as the Non-executive Director of Founder Group since October 2024. Mr. Thien has worked for our subsidiary Founder Energy (Malaysia) since 2021 as the director. Mr. Thien has also served as the executive director of Reservoir Link Energy Bhd. (“RL”), a Malaysian public-listed oil & gas (O&G) and renewable energy company, since 2018. Mr. Thien gained extensive experience in managing O&G and renewable energy business. During his tenure in RL, Mr. Thien is responsible for developing values by implementing strategies for businesses and expansion. Prior to joining RL, Mr. Thien held the position as the Country Manager for Southeast Asia in Halliburton Energy Services (M) Sdn. Bhd. Mr. Thien gains his Diploma in Business and Management from SEGI College, Malaysia and holds a master’s degree in Business Administration from the University of the Sunshine Coast, Australia. Mr. Thien Chiet Chai is qualified as a director of our Company due to his extensive experience in managing oil & gas and renewable energy businesses, including his role as executive director of a public-listed renewable energy company, and his educational background in business and management.
Mr. Marco Baccanello has served as an independent director of Founder Group since September 30, 2024. Mr. Baccanello is an experienced corporate finance executive with expertise in advising companies operating in a broad range of industries, particularly within the technology space, in early to late-stage financings, growth strategy and strategic disposals, restructurings and acquisitions. In addition, he has experience in the preparation of the listing and IPO documents for companies on NASDAQ and international exchanges, with an emphasis on funding requirements and regulatory filings. Mr. Baccanello has also developed acquisition and marketing strategies for multiple digital opportunities, focusing on content published to app stores, including rapidly growing digital businesses in the technology and gaming space. From 2016 to present, Mr. Baccanello has been a member of the Corporate Development team where he leads and manages business plan developments. Prior to that role, he was the Chief Financial Officer of PlayJam from 2010 to 2016, where he planned, implemented and managed all the finance activities, including business planning, budgeting, forecasting and negotiations. Mr. Baccanello’s experience as a former chartered accountant at PricewaterhouseCoopers and director of a private equity firm, specifically his expertise in managing growth businesses within the services, media and technology industries, make him a qualified director to serve on our Board. Mr. Baccanello earned a Bachelor’s degree in Economics at the University of Southampton.
Ms. Sin Siew Kuen has served as an independent director of Founder Group since October 2024. Ms. Sin is an experienced lawyer with over 40 years of legal experience involved in advising conveyancing, corporate, insurance and family laws related matters in Malaysia. Ms. Sin began her legal career in various legal firms and founded Messrs. Sin & Associates in 1988. In addition, Ms. Sin served as the President of the Homebuyers Tribunal established by the Malaysian Ministry of Housing & Developer from 2005 until 2014, dealing with housebuyers against developers claims for late delivery and defective workmanship. Ms. Sin also acts as a member of the Conveyancing Practice Committee for the Malaysian Bar Council for over a decade. Ms. Sin obtained her law degree at the National University of Singapore in 1976 and was admitted as an Advocate & Solicitor in the Malaysian Bar in 1976, and the Supreme Court of Singapore in 1991. She is also an Associate of the UK Chartered Insurance Institute and the Malaysian Insurance Institute.
Mr. Baharin Bin Din has served as an independent director of Founder Group since October 2024. Mr. Baharin held several positions with Tenaga Nasional Berhad (“TNB”), Malaysia’s largest utility company, from January 2012 to February 2024, including Vice President of Distribution from January 2012 to July 2018, Chief Distribution Network Officer from August 2018 to February 2021, and Chief Executive Officer from March 2021 to February 2024. Prior to his role at TNB, Mr. Baharin was the Managing Director at Sabah Electricity Sdn. Bhd. from March 2007 to November 2011, where he was responsible for overall business and technical performance of the company. Since March 2024, he has served as an independent non-executive chairman of MN Holding Berhad, a Malaysian public listed infrastructure utilities company. From January 1988 to December 1989, Mr. Baharin served as the Director of the Electrical Inspectorate Department in Sabah at the Ministry of Energy, Telecommunications & Post, Malaysia, and continued in the same role at the Ministry in Pahang from January 1990 to August 1990. Additionally, from October 2018 to March 2020, he served as an Adjunct Professor at University Tenaga Nasional in Malaysia. Mr. Baharin is a certified Professional Engineer, accredited by the Board of Engineers Malaysia in 1993, a certified Competent Engineer, awarded by the Energy Commission Malaysia in 1996, and a certified Service Engineer, also awarded by the Energy Commission Malaysia in 2000. Additionally, he has been a member of the Institution of Engineers Malaysia since 1991. Mr. Baharin earned a Bachelor’s degree in Electrical Engineering at Syracuse University, New York, USA in 1985, and a Master’s degree in Business Administration at University Tenaga Nasional in 2005.
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Family Relationships
None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
Arrangements
There are no arrangements or understandings between our directors or executive officers and our major shareholders, customers, suppliers or others pursuant to which any director or officer was or is to be selected as a director or officer.
In addition, there are no agreements or understandings for the officers or directors to resign at the request of another person and the above-named officers and directors are not acting on behalf of nor acting at the direction of any other person.
B. Compensation
For the fiscal year ended December 31, 2025, we paid an aggregate of RM2,316,136 (approximately US$570,337) as compensation to our executive officers and directors. None of our non-employee directors have any service contracts with us that provide for benefits upon termination of appointment. We have not set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors and executive officers. Our Malaysian subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her statutory benefits. As of the date of this annual report, our Malaysian subsidiaries have made the required contributions for the employee’s statutory benefits and are in compliance with relevant laws and regulations.
Insider Participation Concerning Executive Compensation
Our board of directors made all determinations regarding executive officer compensation from the inception of the Company until the establishment of our Compensation Committee. Since the establishment of our Compensation Committee, our Compensation Committee has been making determinations regarding executive officer compensation.
C. Board Practices
Board of Directors
Our board of directors consists of five directors. Our board of directors has determined that our three independent directors, Marco Baccanello, Sin Siew Kuan and Baharin Bin Din satisfy the “independence” requirements of the Nasdaq corporate governance rules.
Duties of Directors
Under BVI law, our directors owe fiduciary duties both at common law and under statute, including a statutory duty to act honestly, in good faith and with a view to our best interests. When exercising powers or performing duties as a director, our directors also have a duty to exercise the care, diligence and skills that a reasonable director would exercise in comparable circumstances, taking into account without limitation the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken by him. In exercising the powers of a director, the directors must exercise their powers for a proper purpose and shall not act or agree to the company acting in a manner that contravenes our M&A or the BVI Act. In fulfilling their duty of care to us, our directors must ensure compliance with our M&A. We have the right to seek damages if a duty owed by our directors is breached.
The functions and powers of our board of directors include, among others:
| ● | appointing officers and determining the term of office of the officers; |
| ● | exercising the borrowing powers of the company and mortgaging the property of the company; |
| ● | maintaining or registering a register of mortgages, charges, or other encumbrances of the company; |
| ● | authorizing the payment of donations to religious, charitable, public, or other bodies, clubs, funds, or associations as deemed advisable; and |
| ● | executing checks, promissory notes, and other negotiable instruments on behalf of the company. |
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A director must immediately disclose the interest to all other directors after becoming aware of the fact that they are interested in a transaction entered into or to be entered into by the Company. Subject to compliance with the BVI Act, a director shall not, by reason of that director’s office, be accountable to the Company for any remuneration, profit or other benefit derived, or resulting, derived from such transaction and no such transaction shall be liable to be avoided on the grounds that a director has an interest in it or derives any remuneration, profit or other benefit from it.
A disclosure is only made when it is brought to the attention of every director. The disclosure by a director that they are a member, director, officer or trustee of another named entity or other individual, or has a fiduciary relationship with respect to the entity or individual, and is to be regarded as interested in any transaction which may, after the date of the entry or disclosure of interest, be entered into with the Company or that director, is a sufficient disclosure of interest in relation to that transaction.
Terms of Directors and Executive Officers
Each of our directors generally holds office for an initial term of one year, subject to the termination and resignation clause in the director offer letter, or until a successor has been duly elected and qualified. All of our executive officers are appointed by and serve at the discretion of our board of directors.
A director ceases to hold office if (i) the director’s term of office expires and the director is not re-elected or reappointed, (ii) the director resigns by written notice to the Company, (iii) the director dies or enters into bankruptcy, liquidation or any similar procedure, (iv) the director becomes of unsound mind or is mentally or physically incapable of acting as a director, (v) the director is prohibited or disqualified by law from being a director, (vi) the director becomes bankrupt or insolvent or makes any arrangement or composition with the director’s creditors generally or (vii) the director is removed from office by a resolution of shareholders or resolution of directors (and, for this purpose, section 114 (Removal of directors) of the BVI Act does not apply to the Company).
Where a director resigns, the resignation takes effect upon the time specified in the written notice of resignation to the Company, or if no time is specified, upon receipt of the notice of resignation by the Company.
Qualification
There is currently no shareholding qualification for directors, although a shareholding qualification for directors may be fixed by our shareholders by resolution.
Employment Agreements and Indemnification Agreements
We have entered into employment agreements with each of our executive officers. Pursuant to employment agreements, we agree to employ each of our executive officers for an indefinite period of time, until we or our executive officer terminates the employment by giving six (6)-month prior written notice or six (6)-month salary in lieu of the notice. Each executive officer agrees to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
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Committees of the Board of Directors
Subject to the Company’s M&A and the BVI Act, our directors may by a resolution of directors, appoint any person to hold any office with the Company (including chairperson of directors, chief executive officer, vice president, secretary and treasurer) on any terms, and for any period, they think fit. A person may hold more than one office at the same time, delegate any of their powers to any committee, consisting of one or more directors on any terms they think fit and/or appoint any person (including a director) to be an agent of the Company and delegate their powers to that agent on any terms they think fit.
The directors cannot delegate to a committee the power to (i) amend the M&A of the Company, (ii) designate committees of directors other than a sub-committee of it, (iii) delegate powers to a committee of directors other than a sub-committee of it, (iv) appoint or remove a director or agent, (v) approve a plan of merger, consolidation or arrangement or (vi) make a declaration of solvency or approve a liquidation plan.
We have established three committees under the board of directors: an audit committee, a compensation committee, and a nominating and corporate governance committee. Our independent directors serve on each of the committees. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below.
Audit Committee. Our audit committee consists of our three independent directors, Marco Baccanello, Sin Siew Kuen and Baharin Bin Din. Marco Baccanello is the chairperson of our audit committee. We have determined that each of our independent directors also satisfy the “independence” requirements of Rule 10A-3 under the Securities Exchange Act. Our board also has determined that Marco Baccanello qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq listing rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:
| ● | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
| ● | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
| ● | discussing the annual audited financial statements with management and the independent auditors; |
| ● | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
| ● | reviewing and approving all proposed related party transactions; |
| ● | meeting separately and periodically with management and the independent auditors; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Compensation Committee. Our compensation committee consists of our three independent directors, Marco Baccanello, Sin Siew Kuen and Baharin Bin Din. Sin Siew Kuen is be the chairperson of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:
| ● | reviewing and approving the total compensation package for our most senior executive officers; |
| ● | approving and overseeing the total compensation package for our executives other than the most senior executive officers; |
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| ● | reviewing and recommending to the board with respect to the compensation of our directors; |
| ● | reviewing periodically and approving any long-term incentive compensation or equity plans; |
| ● | selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and |
| ● | reviewing programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. |
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of our three independent directors, Marco Baccanello, Sin Siew Kuen and Baharin Bin Din. Baharin Bin Din is the chairperson of our nominating and corporate governance committee. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:
| ● | identifying and recommending nominees for appointment or re-appointment to our board of directors or for appointment to fill any vacancy; |
| ● | reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; |
| ● | identifying and recommending to our board the directors to serve as members of committees; |
| ● | advising the board, periodically, with respect to significant developments in the law and practice of corporate governance, as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
D. Employees
See “Item 4. Information on the Company-B. Business Overview-Employees.”
E. Share Ownership
The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Class A Ordinary Shares and Class B Ordinary Shares as of the date of this annual report:
| ● | each of our directors and executive officers who beneficially own our Ordinary Shares; |
| ● | our directors and executive officers as a group; and |
| ● | each person known to us to own beneficially more than 5% of our Class A Ordinary Shares or Class B Ordinary Shares. |
Beneficial ownership includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A Ordinary Shares and Class B Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership of each listed person is based on 854,310 Class A Ordinary Shares and 93,248 Class B Ordinary Shares issued and outstanding as of the date of this annual report.
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Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Class A Ordinary Shares or Class B Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that any such person have voting or investment power with respect to securities. In computing the number of Class A Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Class A Ordinary Shares underlying options, warrants, or convertible securities, but excluding Class B Ordinary Shares, held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person.
| Class A Ordinary Shares | Class B Ordinary Shares | Percent of Aggregate | ||||||||||||||||||
| Beneficially Owned | Beneficially Owned | Voting | ||||||||||||||||||
| Number | Percent | Number | Percent | Power* | ||||||||||||||||
| Directors and Executive Officers(1): | ||||||||||||||||||||
| Lee Seng Chi | 26,080 | 3.05 | % | 51,949 | 55.71 | % | 39.17 | % | ||||||||||||
| See Sian Seong | 1,570 | 0.18 | % | - | - | 0.06 | % | |||||||||||||
| Thien Chiet Chai(3) | - | - | 21,299 | 22.84 | % | 15.67 | % | |||||||||||||
| Marco Baccanello | - | - | - | - | ||||||||||||||||
| Sin Siew Kuen | - | - | - | - | ||||||||||||||||
| Baharin Bin Din | - | - | - | - | ||||||||||||||||
| All directors and executive officers as a group (six individuals) | ||||||||||||||||||||
| 5% Shareholders: | ||||||||||||||||||||
| Lee Seng Chi | 26,080 | 3.05 | % | 51,949 | 55.71 | % | 39.17 | % | ||||||||||||
| Reservoir Link Energy Bhd.(2) | 56,500 | 6.61 | % | 20,000 | 21.45 | % | 16.79 | % | ||||||||||||
| Thien Chiet Chai | - | - | 21,299 | 22.84 | % | 15.67 | % | |||||||||||||
| Streeterville Capital (4) | 94,814 | 9.99 | % | - | - | 3.37 | % | |||||||||||||
| * | Holders of Class A Ordinary Shares are entitled to one vote per one Class A Ordinary Share. Holders of Class B Ordinary Shares are entitled to 20 votes per one Class B Ordinary Share. |
Notes:
| (1) | Unless otherwise indicated, the business address of each of the individuals is No.17, Jalan Astana 1D, Bandar Bukit Raja, 41050 Klang, Selangor Darul Ehsan, Malaysia. |
| (2) | Reservoir Link Energy Bhd. is listed on the Main Market of Bursa Malaysia, the stock exchange in Malaysia. The business address of Reservoir Link Energy Bhd. is E-33-01, Menara SUEZCAP 2, KL Gateway, No. 2, Jalan Kerinchi, Gerbang Kerinchi Lestari, 59200 Kuala Lumpur, Malaysia. As of the date of this annual report, 43.42% equity interests of Reservoir Link Energy Bhd. were held by public, and 9.12% of its equity interests was held by Reservoir Link Holdings Sdn Bhd., and 8.45% of its equity interests was held by Thien Chiet Chai. In addition, Thien Chiet Chai holds 43.75% equity interests in Reservoir Link Holdings Sdn Bhd., as of the date of this annual report. Thien Chiet Chai also serves as a director at Reservoir Link Energy Bhd. and Reservoir Link Holdings Sdn Bhd. The chart below indicates the ownership interests among Founder Group Limited, Reservoir Link Energy Bhd., Reservoir Link Holdings Sdn Bhd. and Thien Chiet Chai, as of the date of this annual report. Each of Reservoir Link Energy Bhd. and Reservoir Link Holdings Sdn Bhd. is ultimately controlled by its respective board of directors. As of the date of this annual report, the board of directors of Reservoir Link Energy Bhd. is comprised of seven (7) directors, including Thien Chiet Chai, Dato’ Wan Hassan Bin Mohd Jamil, Siti Zurina Binti Sabarudin, Datuk Tai Hee, Ahmad Rizal Bin Abdul Rahman, Elain Binti Lockman and Rewi Hamid Bugo; the board of directors of Reservoir Link Holdings Sdn Bhd. is comprised of three directors, including Thien Chiet Chai, Dato’ Wan Hassan Bin Mohd Jamil and Mad Haimi Bin Abu Hassan. Except for Thien Chiet Chai, who is a non-executive director at our Company and a director of four of our subsidiaries (Founder Assets Sdn Bhd, Founder Solar Solution Sdn Bhd, Founder Energy (Singapore) Pte Ltd and Founder Energy Sdn. Bhd), and Dato’ Wan Hassan Bin Mohd Jamil, who is a director of three of our subsidiaries (Founder Assets Sdn Bhd, Founder Solar Solution Sdn Bhd and Founder Energy Sdn Bhd), none of the individuals mentioned above are related parties to the Company. |
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| (3) | As of the date of this annual report, 43.42% equity interests of Reservoir Link Energy Bhd. were held by public, and 9.12% of its equity interests was held by Reservoir Link Holdings Sdn Bhd., and 8.45% of its equity interests was held by Thien Chiet Chai. In addition, Thien Chiet Chai holds 43.75% equity interests in Reservoir Link Holdings Sdn Bhd., as of the date of this annual report. Thien Chiet Chai also serves as a director of Reservoir Link Energy Bhd. and Reservoir Link Holdings Sdn Bhd. However, Thien Chiet Chai does not hold a controlling interest in Reservoir Link Energy Bhd. and Reservoir Link Holdings Sdn Bhd., and therefore, he is not considered holding any equity interests in Founder Group Limited. |
| (4) | Streeterville Capital, LLC has the right to convert the Note into the Company’s Class A Ordinary Shares pursuant to the Purchase Agreement and the Note. The number of Class A Ordinary Shares that may actually be acquired by the Selling Shareholder as a result of the conversion of the Note is not currently known and is subject to satisfaction of certain conditions and other limitations, including the limitation that the Company shall not effect the issuance of Class A Ordinary Shares that would cause the Selling Shareholder to beneficially own a number of Class A Ordinary Shares exceeding 9.99% of the number of Class A Ordinary Shares outstanding on such date, as set forth in the Purchase Agreement. John M. Fife has voting and dispositive power over securities held by the Selling Shareholder. The business address of the Selling Shareholder is 297 Auto Mall Drive #4 St. George, Utah 84770. |
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As of the date of this annual report, approximately 80.66% of our issued and outstanding Class A Ordinary Shares are held in the United States by one record holder (Cede and Company, as nominee for beneficial shareholders). We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company.
F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
See “Item 6. Directors, Senior Management and Employees-E. Share Ownership.”
B. Related Party Transactions
Employment Agreements
See “Item 6. Directors, Senior Management and Employees-C. Board Practices-Employment Agreements and Indemnification Agreements.”
Material Transactions with Related Parties
| Name of Related Party | Relationship to Us | |
| Solar Bina Engineering Sdn. Bhd. | An entity controlled by our Chief Executive Officer and Director Mr. Lee Seng Chi | |
| Reservoir Link Energy Bhd. | Our largest shareholder | |
| Reservoir Link Sdn. Bhd. | An entity controlled by Reservoir Link Energy Bhd. | |
| Reservoir Link Renewable Sdn. Bhd. | An entity controlled by Reservoir Link Energy Bhd. | |
| RL Sigma Engineering Sdn. Bhd. | An entity controlled by Reservoir Link Energy Bhd. | |
| Lee Seng Chi | Our Chief Executive Officer and Director | |
| RL Sunseap Energy Sdn. Bhd. | Related company with Reservoir Link Energy Bhd. | |
| Thien Chiet Chai | A director of certain of our related parties, including Reservoir Link Energy Bhd., Reservoir Link Renewable Sdn. Bhd., and RL Sunseap Energy Sdn. Bhd. |
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We carried out the following significant transactions with the related parties during the fiscal year 2023, fiscal year 2024, fiscal year 2025 and up to the date of this annual report:
| Fiscal year 2023 | Fiscal year 2024 | Fiscal year 2025 | Fiscal year 2025 | January 1, 2026 up to date of annual report | ||||||||||||||||
| RM | RM | RM | USD | RM | ||||||||||||||||
| Transactions with related companies Solar Bina Engineering Sdn. Bhd. | ||||||||||||||||||||
| Purchases | - | - | - | - | - | |||||||||||||||
| Sales of renewable energy products and services | 1,697,072 | 73,938 | - | - | - | |||||||||||||||
| Advances | - | 400,000 | 1,500,000 | 350,385 | - | |||||||||||||||
| Recharge of expenses | - | 2,356 | - | - | - | |||||||||||||||
| Reservoir Link Energy Bhd. | ||||||||||||||||||||
| Advances | - | 2,000,000 | - | - | - | |||||||||||||||
| Recharge of expenses | 93,310 | 86,864 | 185,519 | 45,683 | - | |||||||||||||||
| Interest charged | 185,515 | 177,174 | 70,229 | 17,293 | 5,130 | |||||||||||||||
| Management fee | 102,109 | 113,063 | 60,277 | 14,843 | - | |||||||||||||||
| Sales of renewable energy products and services | - | 138,170 | - | - | - | |||||||||||||||
| Reservoir Link Sdn. Bhd. | ||||||||||||||||||||
| Interest charged | 132,817 | 26,583 | - | - | - | |||||||||||||||
| Recharge of expenses | - | - | - | - | - | |||||||||||||||
| Lee Seng Chi | ||||||||||||||||||||
| Rental expense | 126,000 | 217,500 | 312,000 | 76,828 | 78,000 | |||||||||||||||
| RL Sunseap Energy Sdn. Bhd. | ||||||||||||||||||||
| Sales of renewable energy products and services | 2,033,049 | 2,629,089 | 5,700,896 | 1,403,816 | 69,349 | |||||||||||||||
| Reservoir Link Renewable Sdn Bhd. | ||||||||||||||||||||
| Sales of renewable energy products and services | 1,040,060 | 3,053,327 | 20,794,940 | 5,120,645 | 1,291,067 | |||||||||||||||
| Purchases | - | 2,667 | - | - | - | |||||||||||||||
| Recharge of expenses | - | - | - | - | - | |||||||||||||||
The related party transactions mainly derived from the sales of renewable energy products and services, recharge of expenses, interest charged for advances and management fees.
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In fiscal year 2025, recharge of expenses, interest charged and management fees are only charged by Reservoir Link Energy Bhd. In fiscal year 2023, and 2024, recharge of expenses, interest charged and management fees charged by Reservoir Link Energy Bhd. and Reservoir Link Sdn. Bhd. represent expenses paid on behalf of the Company and interest charged for funds advanced to the Company.
In fiscal year 2023, 2024 and 2025, the Company was appointed as contractor by RL Sunseap Energy Sdn. Bhd. for the sales of renewable energy products and services.
In fiscal year 2023, 2024 and 2025, the Company was appointed as contractor by Reservoir Link Renewable Sdn. Bhd. for the sales of renewable energy products and services.
C. Interests of Experts and Counsel
Not applicable.
Item 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
We have appended consolidated financial statements filed as part of this annual report. See “Item 18. Financial Statements.”
Legal Proceedings
From time to time, we may become a party to various legal or administrative proceedings arising in the ordinary course of our business, including actions with respect to intellectual property infringement, violation of third-party licenses or other rights, breach of contract, and labor and employment claims. We are currently not a party to, and we are not aware of any threat of, any legal or administrative proceedings that, in the opinion of our management, are likely to have any material and adverse effect on our business, financial condition, cash flow, or results of operations.
Dividend Policy
Since our inception, we have not declared or paid cash dividends on our Class A Ordinary Shares. Any decision to pay dividends in the future will be subject to a number of factors, including our financial condition, results of operations, the level of our retained earnings, capital demands, general business conditions, and other factors our board of directors may deem relevant. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the operation, development, and growth of our business, and, as a result, we do not expect to pay any dividends in the foreseeable future. Consequently, we cannot give any assurance that any dividends may be declared and paid in the future.
Subject to the BVI Act and our M&A, our board of directors may authorize and declare a dividend to shareholders at such time and of such an amount as they think appropriate if they are satisfied, on reasonable grounds, that immediately following the dividend payment the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due (the “Solvency Test”). There is no further BVI statutory restriction on the amount of funds which may be distributed by us by dividends.
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If, after a dividend is authorized (but before it is paid), our board of directors cease to be satisfied (on reasonable grounds) that the Company will be able to satisfy the Solvency Test after the dividend is paid, then such dividend is deemed not to have been authorized. The directors must notify each shareholder of any dividend authorized by them and no interest accrues on any dividend. If a shareholder fails to claim any dividend for three years after the date on which it was authorized by the directors, the directors may decide by a resolution of directors that the dividend is forfeited for the benefit of the Company.
If we determine to pay dividends on any of our Class A Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Malaysia subsidiary, Founder Energy (Malaysia). Under the Malaysian Companies Act 2016, dividends must be paid out of profit and no dividend shall be paid out if the payment will cause the company to be insolvent. The company, each officer and any other person or individual who contravene this provision commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding MYR3,000,000.00 or to both. For the purpose of determining whether a Malaysian company satisfies the solvency test, a company is regarded as solvent if it is able to pay its debts as and when the debts become due within 12 months immediately after the distribution is made.
Additionally, in the event that Founder Energy (Malaysia) or its subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict any such entity’s ability to pay dividends or make other distributions to us.
Cash dividends, if any, on Class A Ordinary Shares will be paid in U.S. dollars. Malaysia is under a single-tier tax system. Dividends are exempt from income tax in the hands of shareholders pursuant to Paragraph 12B, Schedule 6 of the Income Tax Act 1967. However, Malaysia has introduced a new 2% tax on dividend income derived by individual shareholders, whether resident or non-resident exceeding RM100,000, effective January 1, 2025. Our Malaysia subsidiary, Founder Energy (Malaysia), is not required to deduct tax from dividends paid to its shareholder, Founder Group, and no tax credits will be available for offsetting against the recipient’s tax liability. Further, Malaysia does not impose any withholding tax (i.e., 0%) on dividends paid by Malaysian companies to non-residents. Hence, Founder Energy (Malaysia) is not required to withhold any sum from its dividends for withholding tax purposes. See “Item 10. Additional Information-E. Taxation-Malaysian Enterprise Taxation.”
B. Significant Changes
Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.
Item 9. THE OFFER AND LISTING
A. Offer and Listing Details.
Our Class A Ordinary Shares have been listed on the Nasdaq Capital Market since October 23, 2024 under the symbol “FGL.”
B. Plan of Distribution
Not applicable.
C. Markets
Our Class A Ordinary Shares have been listed on the Nasdaq Capital Market since October 23, 2024 under the symbol “FGL.”
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
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Item 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
We incorporate by reference into this annual report our M&A, which are filed as Exhibit 99.3 to the Company’s Form 6-K filed on November 20, 2025.
The following are summaries of material provisions of our M&A and the BVI Act as they relate to the material terms of our Ordinary Shares.
Ordinary Shares
We are authorized to issue an unlimited number of no par value shares and such shares can be issued as Class A Ordinary Shares or Class B Ordinary Shares, or any combination of the above types of shares. All of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Shares are issued in registered form. There are no limitations imposed by our M&A on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our M&A governing the ownership threshold above which shareholder ownership must be disclosed. Under the BVI Act and our M&A, the Ordinary Shares are deemed to be issued when the name of the shareholder is entered in our register of members. If (a) information that is required to be entered in the register of members is omitted from the register or is inaccurately entered in the register, or (b) there is unreasonable delay in entering information in the register, a shareholder of the company, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the British Virgin Islands Courts for an order that the register be rectified, and the court may either refuse the application or order the rectification of the register, and may direct the company to pay all costs of the application and any damages the applicant may have sustained.
We are authorized to issue an unlimited number of no par value shares and such shares can be issued as Class A Ordinary Shares or Class B Ordinary Shares, or any combination of the above types of shares. Subject to the provisions of the BVI Act and our articles regarding redemption and purchase, the directors by a resolution of directors may purchase, redeem or otherwise acquire any shares at any times, from any shareholder, for any consideration (whether or not at a premium) and on any terms the directors decide by a resolution of directors or acquire for no consideration any fully paid shares from a shareholder by way of surrender of the shares. Subject to the provisions of the BVI Act and the M&A regarding the issuance of the shares, the directors have the authority to issue and allot an unlimited number of Ordinary Shares, grant options to acquire shares to any persons, at such times and on such terms and conditions as they may decide by resolution of the directors. Such authority could be exercised by the directors to issue shares which carry rights and privileges that are preferential, deferred or otherwise special to the rights attaching to Ordinary Shares. The directors may refuse to accept any application for shares, and may accept any application in whole or in part, for any reason or for no reason.
On July 8, 2025, at the 2025 extraordinary general meeting, to implement a dual class structure, our shareholders approved a resolution to amend and restate the Company’s then-effective M&A to reflect the revised authorized share structure of the Company and the terms of the Class A Ordinary Shares and Class B Ordinary Shares.
Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights and privileges except for voting and conversion rights. In respect of all matters subject to vote by way of poll at general meetings of the Company, each holder of Class A Ordinary Shares will be entitled to one (1) vote per one (1) Class A Ordinary Share and each holder of Class B Ordinary Shares will be entitled to 20 votes per one (1) Class B Ordinary Share.
Class B Ordinary Shares are automatically convertible into Class A Ordinary Shares where any Class B Ordinary Share is the subject of any sale, transfer, assignment, or disposal of a legal, beneficial or other interest in that Class B Ordinary Share to a holder that is not a holder of Class B Ordinary Shares nor is a Permitted Transferee, or a person who ceases to be a Permitted Transferee, in which each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share. The creation of any pledge, charge, encumbrance or third party right over any Class B Ordinary Share to secure contractual or legal obligations of a holder of Class B Ordinary Shares shall not be deemed as a sale transfer, assignment or disposition unless such pledge, charge, encumbrance or third party right is enforced and it results in a third party holding legal title to the Class B Ordinary Share, in which case the Class B Ordinary Share will automatically convert to a Class A Ordinary Share. Class B Ordinary Shares are convertible voluntarily at any time after issuance at the option of the holder, upon 10 business days’ prior written notice to the Company, in which each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share. Additionally, on the written request of the shareholder, the Company has the right at its discretion to automatically convert each one (1) Class A Ordinary Share into one (1) Class B Ordinary Share, in which each one (1) Class A Ordinary Share is convertible into one (1) Class B Ordinary Share and/or each one (1) Class B Ordinary Share into one (1) Class A Ordinary Share in which, each one (1) Class B Ordinary Share is convertible into one (1) Class A Ordinary Share.
Listing
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “FGL.”
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Transfer Agent and Registrar
The transfer agent and registrar for the Class A Ordinary Shares is VStock Transfer, LLC, at 18 Lafayette Place, Woodmere, New York 11598, who also maintains the original register of members for the Class B Shares.
Distributions
Shareholders holding shares in our Company are entitled to receive such dividends as may be declared by our board of directors subject to the BVI Act and the M&A.
Shareholders’ Voting Rights
Subject to any rights or restrictions attached to any Class A Ordinary Shares and Class B Ordinary Shares, except as may otherwise be required by law, in respect of all matters subject to vote on a show of hands or by way of poll at general meeting of the Company, each holder of Class A Ordinary Shares will be entitled to one (1) vote per one (1) Class A Ordinary Share and each holder of Class B Ordinary Shares will be entitled to 20 votes per one Class B Ordinary Share. At any general meeting a resolution put to the vote of the meeting shall be decided by a show of hands unless a poll is demanded by the chairman or a shareholder either before or after the declaration of the result of the show of hands. If an equal number of votes are cast for and against a resolution, the chairman of the meeting has a deciding vote. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by proxy. A proxy need not be a shareholder and must be appointed by written notice.
Election of Directors (Cumulative Voting Rights)
There is nothing under British Virgin law which specifically prohibits or restrict the creation of cumulative voting rights for the election of our directors. Our M&A do not provide for cumulative voting for elections of directors.
Meetings of Shareholders
Under our M&A, a copy of the notice of any meeting of shareholders shall be given not less than seven (7) days before the date of the proposed meeting to those persons whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting and our directors. Our board of directors may call a meeting of shareholders (or class of shareholders) if they decide to do so by a resolution of directors and must call a meeting of shareholders (or class of shareholders) upon the written request of shareholders holding at least thirty (30) per cent of voting rights in respect of the matter for which the meeting is requested. In addition, our board of directors may call a meeting of shareholders on its own motion. A meeting of shareholders may be called on short notice if shareholders holding at least ninety (90) per cent of the total voting rights on all the matters to be considered at the meeting have agreed to short notice of the meeting.
At any meeting of shareholders, a quorum will be present if there are shareholders present in person or by proxy representing at least 33.3 per cent of the voting rights of all shares then in issue. Such quorum may be represented by only a single shareholder or proxy if the Company has a sole shareholder. If shareholders representing not less than 33.3 per cent of the votes of the Ordinary Shares or each class of shares entitled to vote on the matters to be considered at the meeting are present within half an hour of the start time of the adjourned meeting, a quorum will be present. If no quorum is present within half an hour of the start time of the meeting, the meeting shall be dissolved if it was requested by shareholders. If the meeting was called by the directors, the meeting shall be adjourned to the following day, and be held at the same time and place or any other date, time and/or place the directors decide by resolution of the directors. No business may be transacted at any meeting of shareholders unless a quorum is present at the time the meeting proceeds to business. If present, the chairperson of our board of directors shall be the chairperson presiding at any meeting of the shareholders. If the chairperson of our board is not present, or there is no such chairperson, then the directors present shall choose a director among themselves to act to chairperson the meeting of the shareholders. If no director is present and willing to act as chairman of the meeting and the shareholders are unable to choose a shareholder to be chairperson for any reason, then the meeting will be dissolved.
A corporation that is a shareholder shall be deemed for the purpose of our M&A to be present in person if represented by its duly authorized representative who has been authorized to do so by resolutions of its directors or other governing body. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.
Meetings of Directors
Our business and affairs are managed by our board of directors, who will make decisions by voting on resolutions of directors. Our directors are free to meet at such times and in such manner and places within or outside the British Virgin Islands as the directors determine to be necessary or desirable. A director must be given not less than twenty four (24) hours’ notice of a meeting of directors. A meeting of directors may be called on short notice if all of the directors entitled to vote on the matters to be considered at the meeting have waived notice and presence at the meeting shall be deemed to constitute waiver for this purpose (unless that director objects in writing before or at the meeting). At any meeting of directors, a quorum will be present if not less than one-half of the total number of directors is present, unless there are only two directors in which case the quorum is two. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by a majority of the directors.
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Protection of Minority Shareholders and Shareholder Action
The enforcement of our rights will ordinarily be a matter for our directors. However, in certain limited circumstances, a shareholder may have the right to seek certain remedies against us in the event the directors are in breach of their duties under the BVI Act. Pursuant to Section 184B of the BVI Act, if a company or a director of a company engages in, proposes to engage in, or has engaged in, conduct that contravenes the provisions of the BVI Act or the M&A of the company, a BVI court may, on application of a shareholder or a director of the company, make an order directing the company or director to comply with, or restraining the company or director from engaging in conduct that contravenes, the BVI Act or the M&A. Furthermore, pursuant to Section 184I of the BVI Act, a shareholder of a company who considers that the affairs of the company have been, are being, or are likely to be, conducted in a manner that is, or any acts of the company have been, or are likely to be, oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the BVI court for an order which can, if the court considers that it is just and equitable to do so, require the company or any other person to pay compensation to the shareholders (among various other potential orders and remedies). Under Section 184G of the BVI Act, a shareholder of a company may bring an action against the company for breach of a duty owed by the company to him as a shareholder.
Under Section 184C of the BVI Act, a shareholder also may, with the permission of the BVI court, bring an action or intervene in a matter in the name of the company, in certain circumstances. Such actions are known as derivative actions. The BVI court may only grant permission to bring a derivative action where the following circumstances apply: (i) the company does not intend to bring, diligently continue or defend or discontinue proceedings; or (ii) it is in the interests of the company that the conduct of the proceedings not be left to the directors or to the determination of the shareholders as a whole.
When considering whether to grant leave, the BVI court is also required to have regard to the following matters: whether the shareholder is acting in good faith; whether a derivative action is in the interests of the company, taking into account the directors’ views on commercial matters; whether the proceedings are likely to succeed; the costs of the proceedings in relation to the relief likely to be obtained; and whether an alternative remedy is available.
Any shareholder of a company may apply to BVI court under the Insolvency Act for the appointment of a liquidator to liquidate the company and the court may appoint a liquidator for the company if it is of the opinion that it is just and equitable to do so.
Generally, any other claims against a BVI company by its shareholders must be based on the general laws of contract or tort applicable in the BVI or their individual rights as shareholders as established by the BVI Act or the M&A. There are also common law rights for the protection of shareholders that may be invoked, largely derived from English common law. Under general English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to seek to have the affairs of the company conducted properly according to law and the constituent documents of the corporation. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the M&A, then the courts may grant relief. Generally, the areas in which the courts may intervene are the following: a company is acting or proposing to act illegally or beyond the scope of its authority; the act complained of, although not beyond the scope of the authority, could only be effected if duly authorized by more than the number of votes which have actually been obtained; the individual rights of the plaintiff shareholder have been infringed or are about to be infringed; or those who control the company are perpetrating a “fraud on the minority.”
Pre-Emptive Rights
There are no pre-emptive rights applicable to the issue by us of new shares under our M&A.
Transfer of Shares
Subject to the restrictions in our M&A and applicable securities laws, any of our shareholders may transfer all or any of his or her Class A Ordinary Shares without the need for a written instrument of transfer if the transfer is carried out in accordance with the laws, rules, procedures and other requirements of the Nasdaq Capital Market or by any recognized stock exchange on which our securities are listed. Where the transfer is of a Class B Ordinary Share, a share may only be transferred by a transfer form signed by the transferor, identifying the number and class of shares being transferred, stating the name and address of the transferee. Class B Ordinary Shares may not be transferred to a holder which is not a holder of Class B Ordinary Shares or a Permitted Transferee, such Class B Ordinary Share will automatically convert into a Class A Ordinary Share immediately prior to such transfer. Our board of directors may not resolve to refuse or delay the transfer of any Class A Ordinary Share unless the shareholder has failed to pay an amount due in respect of it.
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Liquidation
As permitted by the BVI Act and our M&A, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if our assets exceed our liabilities and we are able to pay our debts as they fall due. We also may be wound up in circumstances where we are insolvent in accordance with the terms of the Insolvency Act.
If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay all amounts paid to us on account of the issue of shares immediately prior to the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the amount paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the amounts paid to us on account of the issue of shares, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the amounts paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up, the liquidator appointed by us may, in accordance with the BVI Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
Calls on Shares and Forfeiture of Shares
Our board of directors may, on the terms established at the time of the issuance of such shares or as otherwise agreed, make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least fourteen (14) days prior to the specified time of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.
Redemption of Shares
Subject to the provisions of the BVI Act, we may issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such terms and in such manner as may be determined by our M&A and subject to any applicable requirements imposed from time to time by, the BVI Act, the SEC, or by any recognized stock exchange on which our securities are listed.
Variation of Rights of Shares
All or any of the rights attached to any class of shares may, subject to the provisions of the M&A, only be varied, whether the Company is a going concern or is being liquidated (i) with the consent in writing of the holders of more than 50% of the issued shares of that class, (ii) by a resolution of shareholders of that class, (iii) pursuant to the rights of automatic conversion of the Class B Ordinary Shares, (iv) pursuant to the voluntary conversion of the Class B Ordinary Shares, or (v) pursuant to the conversion of the Ordinary Shares by the Company.
Changes in the Number of Shares We Are Authorized to Issue and Those in Issue
Subject to the BVI Act and our M&A, we may from time to time by resolution of our board of directors or resolution of members (as may be appropriate):
| ● | amend our memorandum to increase or decrease the maximum number of Ordinary Shares we are authorized to issue (which is presently unlimited); |
| ● | divide our authorized and issued Ordinary Shares into a larger number of Ordinary Shares; |
| ● | combine our authorized and issued Ordinary Shares into a smaller number of Ordinary Shares; and |
| ● | create new classes of shares with preference to be determined by resolution of the board of directors to amend the M&A to create new classes of shares with such preferences at the time of authorization. |
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Inspection of Books and Records
Under the BVI Act, members of the general public, on payment of a nominal fee, can obtain copies of the public records of a company available at the office of the Registrar of Corporate Affairs which will include the company’s certificate of incorporation, its M&A (with any amendments) and records of license fees paid to date and will also disclose any articles of dissolution, articles of merger and a register of charges if the company has elected to file such a register.
Our members are also entitled, upon giving written notice to us, to inspect (i) our M&A, (ii) the register of members, (iii) the register of directors, and (iv) minutes of meetings and resolutions of members and of those classes of members of which that member is a member, and to make copies and take extracts from the documents and records referred to in (i) to (iv) above. However, our directors may, if they are satisfied that it would be contrary to the company’s interests to allow a member to inspect any document, or part of a document specified in (ii) to (iv) above, refuse to permit the member to inspect the document or limit the inspection of the document, including limiting the making of copies or the taking of extracts or records. Where a company fails or refuses to permit a member to inspect a document or permits a member to inspect a document subject to limitations, that member may apply to the British Virgin Islands court for an order that he should be permitted to inspect the document or to inspect the document without limitation.
Rights of Non-Resident or Foreign Shareholders
There are no limitations imposed by our M&A on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our M&A governing the ownership threshold above which shareholder ownership must be disclosed.
Issuance of Additional Shares
Our M&A authorizes our board of directors to issue additional shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.
Exclusive Jurisdiction of Certain Actions
Our articles provide that, to the fullest extent permitted by applicable law, unless our board of directors consents in writing to the selection of an alternative forum, the courts of the British Virgin Islands shall have exclusive jurisdiction to hear and determine:
| (i) | any dispute, suit, action, proceedings, controversy, or claim of any kind arising out of or in connection with our memorandum and/or articles, including, without limitation, claims for set-off and counterclaims and any dispute, suit, action, proceedings, controversy, or claim of any kind arising out of or in connection with: (x) the creation, validity, effect, interpretation, performance, or non-performance of, or the legal relationships established by, our memorandum and/or articles; or (y) any non-contractual obligations arising out of or in connection with our memorandum and/or articles; or |
| (ii) | any dispute, suit, action (including, without limitation, any derivative action or proceeding brought on behalf or in our name or any application for permissions to bring a derivative action), proceedings, controversy, or claim of any kind relating or connected to us, our board of directors, officers, management, or shareholders arising out of or in connection with the BVI Act, the Insolvency Act, any other statute, rule, or common law of the British Virgin Islands affecting any relationship between us, our shareholders, and/or our directors and officers (or any of them) or any rights and duties established thereby (including, without limitation, Division 3 of Part VI and Part XI of the Act and section 162(1)(b) of the Insolvency Act, and fiduciary or other duties owed by any director, officer, or shareholder of the Company to the Company or the Company’s shareholders). |
To the fullest extent permitted by applicable laws, unless our board of directors consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act.
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Notwithstanding the foregoing, we note that holders of our Class A Ordinary Shares cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a result, the exclusive jurisdiction provision will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the Securities Act or the Exchange Act, or the respective rules and regulations promulgated thereunder.
Although we believe this provision benefits us by providing increasing consistency in the application of BVI law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers or limit investors’ ability to bring claims in a judicial forum that they find favorable. See “Risk Factors — Risks Relating to our Class A Ordinary Shares — The exclusive jurisdiction provision in our articles of association may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.”
Differences in Corporate Law
The BVI Act and the laws of the British Virgin Islands affecting British Virgin Islands companies like us and our shareholders differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the laws of the British Virgin Islands applicable to us and the laws applicable to companies incorporated under the Delaware General Corporation Law in the United States and their shareholders.
Mergers and Similar Arrangements
Under the laws of the BVI, two or more BVI companies may merge or consolidate in accordance with section 170 of the BVI Act. A merger means the merging of two or more constituent companies into one of the constituent companies and a consolidation means the consolidating of two or more constituent companies into a new company. In order to merge or consolidate, then (among other things) the directors of each constituent company must approve a written plan of merger or consolidation, which must be authorized by a resolution of shareholders.
While a director may vote on the plan of merger or consolidation even if that director has an interest in the merger or consolidation, the director must disclose the interest to all other directors of the company promptly upon becoming aware of the fact that the director is interested in the merger or consolidation.
A transaction entered into by our Company in respect of which a director is interested (including a merger or consolidation) is voidable by us unless the director’s interest was (a) disclosed to the board prior to the transaction or (b) the transaction is (i) between the director and the Company and (ii) the transaction is in the ordinary course of the Company’s business and on usual terms and conditions.
Notwithstanding the above, a transaction entered into by the Company is not voidable if the material facts of the interest are known to the shareholders and they approve or ratify it or the Company received fair value for the transaction.
Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision which, if proposed as an amendment to the memorandum or articles of association, would entitle them to vote as a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote at the meeting held to approve the plan of merger or consolidation.
The shareholders of the constituent companies are not required to receive shares of the surviving or consolidated company but may receive debt obligations or other securities of the surviving or consolidated company, other assets, or a combination thereof. Further, some or all of the shares of a class or series may be converted into a kind of asset while the other shares of the same class or series may receive a different kind of asset. As such, not all the shares of a class or series must receive the same kind of consideration.
After the plan of merger or consolidation has been approved by the directors and authorized by a resolution of the shareholders, articles of merger or consolidation are executed by each company and filed with the Registrar of Corporate Affairs in the BVI.
A shareholder may dissent from a mandatory redemption of his shares, an arrangement (if permitted by the court), a merger (unless the shareholder was a shareholder of the surviving company prior to the merger and continues to hold the same or similar shares after the merger) or a consolidation. A shareholder properly exercising his dissent rights is entitled to a cash payment equal to the fair value of his shares.
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A shareholder dissenting from a merger or consolidation must object in writing to the merger or consolidation before the vote by the shareholders on the merger or consolidation, unless notice of the meeting was not given to the shareholder. If the merger or consolidation is approved by the shareholders, the company must give notice of this fact to each shareholder who gave written objection within twenty (20) days. These shareholders then have twenty (20) days to give to the company their written election in the form specified by the BVI Act to dissent from the merger or consolidation, provided that in the case of a merger, the 20 days starts when the plan of merger is delivered to the shareholder.
Upon giving notice of his election to dissent, a shareholder ceases to have any of the rights of a shareholder except the right to be paid the fair value of his shares. As such, the merger or consolidation may proceed in the ordinary course notwithstanding his dissent.
Within seven (7) days of the later of the delivery of the notice of election to dissent and the effective date of the merger or consolidation, the surviving or consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a specified price per share that the company determines to be the fair value of the shares. The company and the shareholder then have thirty (30) days to agree upon the price. If the company and a shareholder fail to agree on the price within the thirty (30) days, then the company and the shareholder shall, within twenty (20) days immediately following the expiration of the thirty (30) day period, each designate an appraiser and these two appraisers shall designate a third appraiser. These three appraisers shall fix the fair value of the shares as of the close of business on the day prior to the shareholders’ approval of the transaction without taking into account any change in value as a result of the transaction.
Under Delaware law, each corporation’s board of directors must approve a merger agreement. The merger agreement must state, among other terms, the terms of the merger and method of carrying out the merger. This agreement must then be approved by the majority vote of the outstanding shares entitled to vote at an annual or special meeting of each corporation, and no class vote is required unless provided in the certificate of incorporation. Delaware permits an agreement of merger to contain a provision allowing the agreement to be terminated by the board of directors of either corporation, notwithstanding approval of the agreement by the stockholders or shareholders of all or any of the corporations (1) at any time prior to the filing of the agreement with the Secretary of State or (2) after filing if the agreement contains a post-filing effective time and an appropriate filing is made with the Secretary of State to terminate the agreement before the effective time. In lieu of filing an agreement of merger, the surviving corporation may file a certificate of merger, executed in accordance with Section 103 of the DGCL. The surviving corporation is also permitted to amend and restate its certification of incorporation in its entirety. The agreement of merger may also provide that it may be amended by the board of directors of either corporation prior to the time that the agreement filed with the Secretary of State becomes effective, even after approval by stockholders or shareholders, so long as any amendment made after such approval does not adversely affect the rights of the stockholders or shareholders of either corporation and does not change any term in the certificate of incorporation of the surviving corporation. If the agreement is amended after filing but before becoming effective, an appropriate amendment must be filed with the Secretary of State. If the surviving corporation is not a Delaware corporation, it must consent to service of process for enforcement of any obligation of the corporation arising as a result of the merger; such obligations include any suit by a stockholder of the disappearing Delaware corporation to enforce appraisal rights under Delaware law.
If a proposed merger or consolidation for which appraisal rights are provided is to be submitted for approval at a shareholder meeting, the subject company must give notice of the availability of appraisal rights to its shareholders at least twenty (20) days prior to the meeting.
A dissenting shareholder who desires to exercise appraisal rights must (a) not vote in favor of the merger or consolidation; and (b) continuously hold the shares of record from the date of making the demand through the effective date of the applicable merger or consolidation. Further, the dissenting shareholder must deliver a written demand for appraisal to the company before the vote is taken. The Delaware Court of Chancery will determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the court will take into account “all relevant factors.” Unless the Delaware Court of Chancery in its discretion determines otherwise, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and accrue at 5% over the Federal Reserve discount rate.
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Shareholders’ Suits
There are both statutory and common law remedies available to our shareholders as a matter of British Virgin Islands Law. These are summarized below:
Prejudiced Members
A shareholder who considers that the affairs of the company have been, are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive, unfairly discriminatory or unfairly prejudicial to the shareholder in that capacity, can apply to the BVI High Court under Section 184I of the BVI Act for an order requiring the company or any other person to acquire the shareholder’s shares or pay compensation to the shareholder, regulating the future conduct of the company’s affairs, amending the memorandum or articles of the company, appointing a receiver or liquidator of the company, rectifying the records of the company, or that any decision or action of the company which contravenes the BVI Act or the company’s memorandum or articles of association be set aside.
Just and Equitable Winding Up
In addition to the statutory remedies outlined above, shareholders can also petition the British Virgin Islands Court for the winding up of a company under the Insolvency Act for the appointment of a liquidator to liquidate the company and the court may appoint a liquidator for the company if it is of the opinion that it is just and equitable for the court to so order. Save in exceptional circumstances, this remedy is generally only available where the company has been operated as a quasi-partnership and trust and confidence between the partners has broken down.
Indemnification of Directors and Executive Officers and Limitation of Liability
BVI law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any indemnification provision may be held by the BVI Courts to be contrary to public policy or in breach of the BVI Act, for example, a provision for indemnification against civil fraud or the consequences of committing a crime.
Under the Company’s articles of association, subject to the BVI Act, the Company must indemnify any person who (i) is or was a party, or is threatened to be made a party, to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director or officer of the Company or (ii) is or was, at the request of the Company, serving as a director or officer of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise, against any expenses, judgments, fines or amounts paid in settlement and reasonably incurred in connection with any legal, administrative or investigative proceedings. In relation to the above, the Company may pay on behalf of the person or lend funds to the person to enable the person to pay, any expenses incurred, or to be incurred, by the person in defending any legal, administrative or investigative proceedings.
Under the BVI Act, to be entitled to this indemnification, such person must have acted honestly and in good faith with a view to the best interests of our Company and, in the case of criminal proceedings, they must have no reasonable cause to believe their conduct with was unlawful. This standard of conduct is generally the same as permitted under the DGCL for a Delaware corporation.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Anti-Takeover Provisions in Our M&A
Some provisions of our articles of association may discourage, delay or prevent a change in control of our Company or management that shareholders may consider favorable. Under the BVI Act there are no provisions, which specifically prevent the issuance of preferred shares or any such other “poison pill” measures. Our M&A also do not contain any express prohibitions on the issuance of any preferred shares. Therefore, the directors without the approval of the holders of Ordinary Shares may issue preferred shares that have characteristics that may be deemed to be anti-takeover. Additionally, such a designation of shares may be used in connection with plans that are poison pill plans. However, under British Virgin Islands law, our directors in the exercise of their powers granted to them under our M&A and performance of their duties, are required to act honestly and in good faith in what the director believes to be in the best interests of our Company.
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Directors’ Fiduciary Duties
Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances.
Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction.
The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.
Under British Virgin Islands law, our directors owe fiduciary duties both at common law and under statute including, among others, a statutory duty to act honestly, in good faith, for a proper purpose and with a view to what the directors believe to be in the best interests of the company. Our directors are also required, when exercising powers or performing duties as a director, to exercise the care, diligence and skill that a reasonable director would exercise in comparable circumstances, taking into account without limitation, the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken. In the exercise of their powers, our directors must ensure neither they nor the company acts in a manner which contravenes the BVI Act or our M&A. A shareholder has the right to seek damages for breaches of duties owed to us by our directors.
Pursuant to the BVI Act and our M&A, a director of a company who has an interest in a transaction and who has declared such interest to the other directors, may:
| ● | (a) vote on a matter relating to the transaction; |
| ● | (b) attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and; |
| ● | (c) sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction. |
In certain limited circumstances, a shareholder has the right to seek various remedies against the company in the event the directors are in breach of their duties under the BVI Act. Pursuant to Section 184B of the BVI Act, if a company or director of a company engages in, or proposes to engage in or has engaged in, conduct that contravenes the provisions of the BVI Act or the memorandum or articles of association of the company, the British Virgin Islands Court may, on application of a shareholder or director of the company, make an order directing the company or director to comply with, or restraining the company or director from engaging in conduct that contravenes the BVI Act or the memorandum or articles. Furthermore, pursuant to section 184I(1) of the BVI Act a shareholder of a company who considers that the affairs of the company have been, are being or likely to be, conducted in a manner that is, or any acts of the company have been, or are likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the British Virgin Islands Court for an order which, inter alia, can require the company or any other person to pay compensation to the shareholders.
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Shareholder Action by Written Consent
Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. British Virgin Islands law provides that, subject to the memorandum and articles of association of a company, an action that may be taken by members of the company at a meeting may also be taken by a resolution of members consented to in writing.
Shareholder Proposals
Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands law and M&A allow our shareholders holding 30% or more of the votes of the issued and outstanding voting shares to requisition a shareholders’ meeting. There is no requirement under British Virgin Islands law to hold shareholders’ annual general meetings, but our M&A do permit the directors to call such a meeting. The location of any shareholders’ meeting can be determined by the board of directors and can be held anywhere in the world.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under the British Virgin Islands law, our M&A do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our M&A, directors can be removed from office, with or without cause, by a resolution of shareholders. Directors can also be removed by a resolution of directors passed at a meeting of directors called for the purpose of removing the director or for purposes including the removal of the director.
Transactions With Interested Shareholders
The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors. British Virgin Islands law has no comparable statute and our M&A fails to expressly provide for the same protection afforded by the Delaware business combination statute.
Dissolution; Winding Up
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under the BVI Act and our M&A, we may appoint a voluntary liquidator by a resolution of the shareholders or directors, provided that the directors have made a declaration of solvency that the company is able to discharge its debts as they fall due and that the value of the company’s assets exceed its liabilities.
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Variation of Rights of Shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our M&A, if at any time our shares are divided into different classes of shares, the rights attached to any class may only be varied, whether or not our Company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by a majority of the votes cast by those entitled to vote at a meeting of the holders of the issued shares in that class. For these purposes the creation, designation or issue of preferred shares with rights and privileges ranking in priority to an existing class of shares is deemed not to be a variation of the rights of such existing class and may in accordance with our M&A be effected by resolution of directors without shareholder approval.
Amendment of Governing Documents
Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, our M&A may be amended by a resolution of shareholders and, subject to certain exceptions, by a resolution of directors. An amendment is effective from the date it is registered at the Registry of Corporate Affairs in the British Virgin Islands.
Anti-Money Laundering Laws
In order to comply with legislation or regulations aimed at the prevention of money laundering we are required to adopt and maintain anti-money laundering procedures, and may require subscribers to provide evidence to verify their identity. Where permitted, and subject to certain conditions, we also may delegate the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.
We reserve the right to request such information as is necessary to verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account from which they were originally debited.
If any person resident in the British Virgin Islands knows or suspects that another person is engaged in money laundering or terrorist financing and the information for that knowledge or suspicion came to their attention in the course of their business the person will be required to report his belief or suspicion to the Financial Investigation Agency of the British Virgin Islands, pursuant to the Proceeds of Criminal Conduct Act, 1997 (as amended). Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
C. Material Contracts
We have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 4. Information on the Company” or elsewhere in this annual report.
D. Exchange Controls
There are no exchange control regulations or currency restrictions in the BVI. The BVI Act and the Company’s M&A govern the distribution of dividends and ensure that such dividends, interest or other payment can be made to non-resident holders.
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E. Taxation
Malaysian Enterprise Taxation
The following brief description of Malaysian enterprise income taxation is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends, if any, we are ultimately able to pay to our shareholders. See “Item 8. Financial Information-A. Consolidated Statements and Other Financial Information-Dividend Policy.”
Income Tax in Malaysia
The principal legislation that governs a person’s income tax in Malaysia is the Income Tax Act 1967 (the “ITA”). The regulatory body implementing and enforcing the ITA is the Inland Revenue Board of Malaysia (“IRB”). Pursuant to Section 3 of the ITA, income tax shall be charged for each year of assessment (“YA”) upon the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia.
Pursuant to Section 8 of the ITA, a company is a tax resident in Malaysia if its management and control are exercised in Malaysia. Management and control are normally considered to be exercised at the place where the directors’ meetings concerning management and control of the company are held. The income tax rate payable by a resident company differs depending on the amount of the company’s paid-up capital, nationality of shareholder and its annual gross income in relation to the particular YA. The corporate income tax rates are as illustrated below:
| Types of Company | Chargeable income | Tax rate YA 2025 | ||||||
| Resident company (other than company described below) | 24 | % | ||||||
| Resident company: | ||||||||
| ● | with paid-up capital of 2.5 million Malaysian ringgit (MYR) or less, and gross income from business of not more than MYR 50 million | On the first RM150,000 | 15 | % | ||||
| ● | that does not control, directly or indirectly, another company that has paid-up capital of more than MYR 2.5 million | On the next RM450,000 | 17 | % | ||||
| ● | is not controlled, directly or indirectly, by another company that has paid-up capital of more than MYR 2.5 million, and | In excess of 600,000 | 24 | % | ||||
| ● | with no more than 20% of its paid-up capital being owned, directly or indirectly, by a foreign company or non-Malaysian citizen (with effect from year of assessment 2025) | |||||||
| Non-resident company | 24 | % | ||||||
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Pursuant to the ITA, a non-resident company - namely, a company whose management and control are not exercised in Malaysia and thus does not fall under the ambit of Section 8 of the ITA - is subject to the following tax rates:
| Types of Income | Rate (%) | |||
| Business income | 24 | |||
| Royalties derived from Malaysia | 10 | |||
| Rental of moveable properties | 10 | |||
| Advice, assistance, or services rendered in Malaysia | 10 | |||
| Interest | 15 | * | ||
| Dividends | Exempt | |||
| Other income | 10 | |||
Note: Where the recipient is resident in a country that has a double tax agreement with Malaysia, the tax rates for the specific sources of income (except for business income) may be reduced.
| * | Interest paid to a non-resident by a bank or a finance company in Malaysia is exempt from tax. |
Foreign-Sourced Income
Malaysia adopts a territorial principle of taxation, under which only income accruing in or derived from or received in Malaysia from outside Malaysia is subject to income tax in Malaysia pursuant to Section 3 of the ITA. Previously, “income received in Malaysia from outside Malaysia” or “foreign-sourced income” (“FSI”) received by Malaysian taxpayers is not taxable due to the availability of tax exemption under Paragraph 28, Schedule 6 of the ITA (“Para 28”). This exemption is applicable to any person other than a resident company carrying on the business of banking, insurance, or sea or air transport, in respect of income derived from sources outside Malaysia and received in Malaysia, pursuant to Para 28. On October 29, 2021, however, the Malaysian government announced via the Budget 2022 that the exemption under Para 28 will no longer be applicable to tax residents, effective from January 1, 2022. Therefore, income tax will be imposed on resident persons in Malaysia on income derived from foreign sources and received in Malaysia with effect from January 1, 2022. Such income will be treated equally vis-à-vis income accruing in or derived from Malaysia and taxable under Section 3 of the ITA.
In summary, the tax treatments for the income of a person in Malaysia are depicted as follows:
| Income Derived From | Income Received In | Prior to January 1, 2022 |
Effective from January 1, 2022 | |||
| Malaysia | Malaysia | Taxable | Taxable | |||
| Malaysia | Malaysia from outside Malaysia | Taxable | Taxable | |||
| Overseas | Malaysia from outside Malaysia | Tax Exempted | Taxable | |||
| Overseas | Overseas | Tax Exempted | Tax Exempted |
On November 16, 2021, the IRB announced the Special Income Remittance Program (“SIRP”) for Malaysian tax residents whose income is derived from foreign sources and received in Malaysia. The implementation of taxation on FSI is staggered into the following two timelines, depending on the timing of remittance of FSI into Malaysia: (i) during the period from January 1 to June 30, 2022 (six months) (the “SIRP Period”), FSI remitted shall be taxed at a fixed rate of 3% on the gross amount of income remitted. FSI remitted under the SIRP will be accepted in good faith by the IRB as the IRB will not conduct an audit or investigation on the taxpayer. In addition, the IRB will not impose any penalty on FSI remitted during the SIRP Period. On or after July 1, 2022, FSI remitted shall be taxed in accordance to the formula, at the prevailing tax rate applicable to tax residents on the statutory income, namely, gross FSI less expenses attributable to the FSI.
Notwithstanding the implementation of taxation on FSI, the Malaysian Ministry of Finance announced on December 30, 2021 that exemption from income tax would be available for a period of five years on certain categories of FSI received by Malaysian tax residents, when certain qualifying conditions are met. Specifically, (i) for individuals excluding those carrying on business in Malaysia through a partnership, all categories of FSI are exempted; and (ii) for companies and limited liability partnerships, foreign-sourced dividend income is exempted provided the global minimum tax of 15% has been levied on the dividend income paid from the source country or comply with the economic substance requirements. To legislate the above, the following Orders were gazetted on July 19, 2022 and are effective from January 1, 2022 to December 31, 2026. This exemption from income tax has been extended for another 10 years i.e. to December 31, 2036 pursuant to P.U. (A) 451/2024.
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Profit Distribution and Withholding Tax
We are a holding company incorporated as a business company in the BVI and we gain substantial income by way of dividends to be paid to us from Founder Energy (Malaysia), our direct subsidiary company in Malaysia.
Malaysia is under the single-tier tax system, under which income tax imposed on a company’s chargeable income is a final tax, and dividends distributed are exempt from tax in the hands of the shareholders pursuant to Section 108 of the ITA. As such, companies are not required to deduct tax from dividends paid to shareholders, and no tax credits will be available to offset against the recipient’s tax liability. Corporate shareholders receiving exempt single-tier dividends can, in turn, distribute such dividends to their own shareholders, who are also exempt on such receipts. However, effective January 1, 2025, Malaysia has introduced a new 2% tax on dividend income derived by individual shareholders, whether resident or non-resident exceeding RM100,000. In addition, while Malaysia imposes withholding tax on certain payments, such as interest, royalties, contract payments, and special classes of income, Malaysia does not do so on dividends in addition to tax on the profits out of which the dividends are declared. Such position aligns with the double taxation agreements (“DTAs”) concluded by Malaysia with an extensive number of countries, including the United States. Pursuant to the DTAs, no withholding tax will be imposed on dividends paid by Malaysian companies to non-residents.
In view of the above, we believe that dividends which will be paid to us from our direct subsidiary in Malaysia will not be subject to any withholding tax.
BVI Taxation
A holder of shares in a BVI company who is not a resident of the BVI is not required to pay tax in the BVI on (i) dividends paid with respect to the shares, or (ii) any gains realized during that year on sale or disposal of such shares, provided the BVI company does not have a direct or indirect interest in any land in the BVI. The laws of the BVI does not impose a withholding tax on dividends paid by a company incorporated or re-registered under the BVI Act.
There are no capital gains, gift or inheritance taxes levied by the BVI government on companies incorporated or re-registered under the BVI Act. In addition, shares of companies incorporated or re-registered under the BVI Act are not subject to transfer taxes, stamp duties or similar charges, provided the company does not have a direct or indirect interest in any land in the BVI.
Under the current laws of BVI, our Company is not subject to tax on income or capital gains.
United States Federal Income Taxation
WE URGE POTENTIAL PURCHASERS OF OUR CLASS A ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING, AND DISPOSING OF OUR CLASS A ORDINARY SHARES.
The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:
| ● | banks; |
| ● | financial institutions; |
| ● | insurance companies; |
| ● | regulated investment companies; |
| ● | real estate investment trusts; |
| ● | broker-dealers; |
| ● | persons that elect to mark their securities to market; |
| ● | U.S. expatriates or former long-term residents of the U.S.; |
| ● | governments or agencies or instrumentalities thereof; |
| ● | tax-exempt entities; |
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| ● | persons liable for alternative minimum tax; |
| ● | persons holding our Class A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction; |
| ● | persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Class A Ordinary Shares); |
| ● | persons who acquired our Class A Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation; |
| ● | persons holding our Class A Ordinary Shares through partnerships or other pass-through entities; |
| ● | beneficiaries of a Trust holding our Class A Ordinary Shares; or |
| ● | persons holding our Class A Ordinary Shares through a trust. |
The brief discussion set forth below is addressed only to U.S. Holders (as defined below) that purchase Class A Ordinary Shares of the Company. Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Class A Ordinary Shares.
Material Tax Consequences Applicable to U.S. Holders of Our Class A Ordinary Shares
The following brief summary sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Class A Ordinary Shares. It is directed to U.S. Holders of our Class A Ordinary Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This brief summary does not deal with all possible tax consequences relating to ownership and disposition of our Class A Ordinary Shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax laws.
The following brief description applies only to U.S. Holders that hold Class A Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.
The brief description below of the U.S. federal income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of Class A Ordinary Shares and you are, for U.S. federal income tax purposes,
| ● | an individual who is a citizen or resident of the United States; |
| ● | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia; |
| ● | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
| ● | a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
If a partnership (or other entities treated as a partnership for United States federal income tax purposes) is a beneficial owner of our Class A Ordinary Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our Class A Ordinary Shares are urged to consult their tax advisors regarding an investment in our Class A Ordinary Shares.
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Taxation of Dividends and Other Distributions on our Class A Ordinary Shares
Subject to the passive foreign investment company (PFIC) rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.
With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Class A Ordinary Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or any preceding taxable year, and (3) certain holding period requirements are met. Because there is not an income tax treaty between the United States and Malaysia, clause (1) above can be satisfied only if the Class A Ordinary Shares are readily tradable on an established securities market in the United States. Under U.S. Internal Revenue Service authority, Class A Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently include the Nasdaq Stock Market. Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “FGL.” You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Class A Ordinary Shares, including the effects of any change in law after the date of this annual report. For the fiscal year ended December 31, 2025, we did not declare or pay cash dividends on our Class A Ordinary Shares.
Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class A Ordinary Shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”
To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. Since our inception, we have not declared or paid cash dividends on our Class A Ordinary Shares, and we do not expect to pay any dividends in the foreseeable future.
Taxation of Dispositions of Class A Ordinary Shares
Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.
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Passive Foreign Investment Company (“PFIC”) Consequences
A non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:
| ● | at least 75% of its gross income for such taxable year is passive income; or |
| ● | at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”). |
Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in our offering will generally be considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value of our Class A Ordinary Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets on any particular quarterly testing date for purposes of the asset test.
Based on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. We must make a separate determination each year as to whether we are a PFIC. For the 2024 taxable year, we do not believe we were a PFIC. However, there can be no assurance with respect to our status as a PFIC for any future taxable years. Depending on the amount of assets held for the production of passive income, it is possible that, for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax year. In addition, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Class A Ordinary Shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Class A Ordinary Shares. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend our liquid assets. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price of our Class A Ordinary Shares from time to time) that may not be within our control. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Class A Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely “mark-to-market” election as described below, you may avoid some of the adverse effects of the PFIC regime by making a “purging election” (as described below) with respect to the Class A Ordinary Shares.
If we are a PFIC for your taxable year(s) during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Class A Ordinary Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:
| ● | the excess distribution or gain will be allocated ratably over your holding period for the Class A Ordinary Shares; |
| ● | the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and |
| ● | the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital, even if you hold the Class A Ordinary Shares as capital assets.
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A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the US Internal Revenue Code for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed to hold) Class A Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares as of the close of such taxable year over your adjusted basis in such Class A Ordinary Shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Class A Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “-Taxation of Dividends and Other Distributions on our Class A Ordinary Shares” generally would not apply.
The mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. The Class A Ordinary Shares are regularly traded on the Nasdaq Capital Market and if you are a holder of our Class A Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.
Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election under Section 1295(b) of the US Internal Revenue Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. The qualified electing fund election, however, is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Class A Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding such Class A Ordinary Shares, including regarding distributions received on the Class A Ordinary Shares and any gain realized on the disposition of the Class A Ordinary Shares.
If you do not make a timely “mark-to-market” election (as described above), and if we were a PFIC at any time during the period you hold our Class A Ordinary Shares, then such Class A Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a “purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed sale of such Class A Ordinary Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Class A Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Class A Ordinary Shares for tax purposes.
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IRC Section 1014(a) provides for a step-up in basis to the fair market value for our Class A Ordinary Shares when inherited from a decedent that was previously a holder of our Class A Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Class A Ordinary Shares, or a mark-to-market election and ownership of those Class A Ordinary Shares are inherited, a special provision in IRC Section 1291(e) provides that the new U.S. Holder’s basis should be reduced by an amount equal to the Section 1014 basis minus the decedent’s adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent’s passing, the PFIC rules will cause any new U.S. Holder that inherits our Class A Ordinary Shares from a U.S. Holder to not get a step-up in basis under Section 1014 and instead will receive a carryover basis in those Class A Ordinary Shares.
You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares and the elections discussed above.
Information Reporting and Backup Withholding
Dividend payments with respect to our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. Transactions effected through certain brokers or other intermediaries, however, may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.
Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Class A Ordinary Shares, subject to certain exceptions (including an exception for Class A Ordinary Shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Class A Ordinary Shares.
F. Dividends and Paying Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
We have previously filed with the SEC our registration statements on Form F-1 (File No. 333-281167), as amended.
We are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year. The SEC maintains a website at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing, among other things, the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
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I. Subsidiary Information
For a listing of our subsidiaries, see “Item 4. Information on the Company-A. History and Development of the Company.”
J. Annual Report to Security Holders
No applicable.
Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk (including foreign currency risk, interest rate risk, and equity price risk), credit risk, and liquidity risk in the ordinary course of business. Our overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance.
Foreign Currency Risk
We are exposed to foreign currency risk with transactions and balances that are denominated in currencies other than our functional currency. The currencies giving rise to this risk are primarily Chinese Renminbi (“RMB”) and United States Dollar (“USD”). Foreign currency risk is monitored closely on an on-going basis to ensure that the net exposure is at an acceptable level.
Our exposure to foreign currency risk based on the carrying amounts of the financial instruments at the end of the reporting period is summarized below.
| Assets | Liabilities | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| RM | RM | RM | RM | |||||||||||||
| United States Dollar | 1,136,521 | 2,117,602 | - | (918,237 | ) | |||||||||||
| Chinese Renminbi | 2,194 | 2,116 | (7,075,765 | ) | (1,432,416 | ) | ||||||||||
Foreign Currency Risk Sensitivity Analysis
The following table details the sensitivity analysis to a 10% change in the foreign currencies at the end of the reporting period, with all other variables held constant.
| For the fiscal years ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| RM | RM | |||||||
| United States Dollar | 86,376 | 91,152 | ||||||
| Chinese Renminbi | (537,591 | ) | (108,703 | ) | ||||
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Interest Rate Risk
We are exposed to interest rate risk as we have bank loans which are interest bearing. We currently do not have an interest rate hedging policy.
Interest Rate Sensitivity Analysis
The sensitivity analysis below has been determined based on the exposure to interest rate for non-derivative instruments at the end of the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.
If interest rates on loans had been 50 basis points higher/lower and all other variables were held constant, our profit for fiscal year 2025 would decrease/increase by approximately RM239,113 (2024: RM132,201).
Liquidity Risk
Liquidity risk arises mainly due to general funding and business activities. We practice prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.
Maturity Analysis
The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period.)
| The Company | Carrying Amount | Contractual Undiscounted Cash Flows | Within 1 Year | 1 - 5 Years | Over 5 Years | |||||||||||||||
| RM | RM | RM | RM | RM | ||||||||||||||||
| 2025 | ||||||||||||||||||||
| Non-derivative Financial Liabilities | ||||||||||||||||||||
| Bank borrowings | 63,340,867 | 67,741,152 | 46,998,342 | 16,109,886 | 4,632,924 | |||||||||||||||
| Lease liabilities | 708,629 | 744,000 | 462,000 | 282,000 | — | |||||||||||||||
| Trade payables | 18,315,260 | 18,315,260 | 18,315,260 | — | — | |||||||||||||||
| Other payables and accruals | 8,951,463 | 8,951,463 | 8,951,463 | — | — | |||||||||||||||
| Amount due to related parties | 3,901,595 | 4,047,143 | 4,047,143 | — | — | |||||||||||||||
| 95,217,814 | 99,799,018 | 78,774,208 | 16,391,886 | 4,632,924 | ||||||||||||||||
| 2024 | ||||||||||||||||||||
| Non-derivative Financial Liabilities | ||||||||||||||||||||
| Bank borrowings | 35,039,857 | 35,668,434 | 33,045,385 | 1,289,377 | 1,333,672 | |||||||||||||||
| Lease liabilities | 747,819 | 806,000 | 312,000 | 494,000 | — | |||||||||||||||
| Trade payables | 27,396,814 | 27,396,814 | 27,396,814 | — | — | |||||||||||||||
| Other payables and accruals | 31,816,499 | 31,816,499 | 31,816,499 | — | — | |||||||||||||||
| Amount due to related parties | 2,168,066 | 2,292,276 | 2,292,276 | — | — | |||||||||||||||
| 97,169,055 | 97,980,023 | 94,862,974 | 1,783,377 | 1,333,672 | ||||||||||||||||
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Capital Risk Management
We manage our capital to ensure that entities within our Company will be able to maintain an optimal capital structure so as to support our businesses and maximize shareholders’ value. To achieve this objective, we may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.
We manage our capital based on debt-to-equity ratio that complies with debt covenants and regulatory, if any. The debt-to-equity ratio is calculated as net debt divided by total equity. We include within net debt, loans, and borrowings from financial institutions. Capital includes equity attributable to the owners of the parent and non-controlling interest. The debt-to-equity ratio of our Company at the end of the reporting period was as follows:
| As at December 31, 2024 | As at December 31, 2025 | As at December 31, 2025 | ||||||||||
| RM | RM | USD | ||||||||||
| Total debts | 35,039,857 | 63,340,868 | 15,597,357 | |||||||||
| Total equity | 17,121,478 | 30,256,359 | 7,450,470 | |||||||||
| Debt-to-equity ratio | 2.05 | 2.09 | 2.09 | |||||||||
We complied with the capital requirements imposed by financial institutions for the financial year ended December 31, 2023, 2024, and 2025.
Our overall strategy remains unchanged from the previous year.
Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.
D. American Depositary Shares
Not applicable.
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Part II
Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
See “Item 10. Additional Information” for a description of the rights of securities holders, which remain unchanged.
Use of Proceeds
Registration Statement on Form F-1, as amended (File Number 333- 281167)
The following “Use of Proceeds” information relates to the registration statement on Form F-1, as amended (File Number 333-281167) for our IPO, which was declared effective by the SEC on September 30, 2024. In October 2024, we completed our IPO and issued and sold an aggregate of 1,218,750 Ordinary Shares, at a price of $4.00 per share for gross proceeds of $4.875 million, before deducting underwriting discounts and other related expenses. The Company received net proceeds of approximately $1.539 million. US Tiger Securities, Inc. was the representative of the underwriters of our IPO. On October 30, 2024, US Tiger Securities, Inc. partially exercised its over-allotment option to purchase an additional 2,813 Ordinary Shares at a purchase price of $4.00 per share, for net proceeds of $10,351.84, after deducting underwriting discounts and other related expenses. The closing of the sales of the over-allotment option shares took place on October 31, 2024.
We incurred approximately $3,337,379 in expenses in connection with our IPO, which included approximately $342,038 in underwriting discounts, approximately $48,862 in expenses paid to or for underwriters, and approximately $2,946,479 in other expenses. None of the transaction expenses included payments to directors or officers of our Company or their associates, persons owning more than 10% or more of our equity securities, or our affiliates. None of the net proceeds we received from the IPO were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities, or our affiliates.
We received net proceeds of approximately $1.55 million after the deduction of approximately $3,337,379 of offering costs. As of the date of this annual report, we have used $30,983 towards our expansion into other countries in Southeast Asia, with the remaining funds used for general working capital. We intend to use the remaining proceeds from our IPO in the manner disclosed in our registration statement on Form F-1, as amended (File Number 333-281167).
Item 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as of December 31, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2025 were ineffective.
Our conclusion is based on the fact that we lack accounting staff and resources with appropriate knowledge of International Financial Reporting Standards and SEC reporting and compliance requirement and deficiency of internal journal entries procedure. Our management is currently in the process of evaluating the steps necessary to remediate the ineffectiveness, such as (i) implementing regular and continuous International Financial Reporting Standards accounting and financial reporting training programs for our accounting and financial reporting personnel; and (ii) engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control.
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Management’s Annual Report on Internal Control over Financial Reporting
This annual report on Form 20-F does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm, as permitted by the transition period established by rules of the SEC for newly public companies.
Attestation Report of the Registered Public Accounting Firm
This annual report on Form 20-F does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC where domestic and foreign registrants that are non-accelerated filers, which we are, and “emerging growth companies,” which we also are, are not required to provide the auditor attestation report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 16. [RESERVED]
Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Mr. Marco Baccanello qualifies as an “audit committee financial expert” as defined in Item 16A of Form 20-F. Mr. Marco Baccanello satisfies the “independence” requirements of Section 5605(a)(2) of the NASDAQ Listing Rules as well as the independence requirements of Rule 10A-3 under the Exchange Act.
Item 16B. CODE OF ETHICS
Our board of directors has adopted a code of business conduct and ethics, which is applicable to all of our directors, officers, and employees. Our code of business conduct and ethics is publicly available on our website.
Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered and billed by JP Centurion & Partners PLT, our independent registered public accounting firm for the periods indicated.
| For the Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Audit fees(1) | $ | 141,000 | $ | 136,000 | ||||
| Audit-related fees(2) | $ | - | $ | - | ||||
| Tax fees(3) | $ | - | $ | - | ||||
| All other fees | $ | - | $ | - | ||||
| Total | $ | 141,000 | $ | 136,000 | ||||
| (1) | Audit fees include the aggregate fees billed for each of the fiscal years for professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements or for the audits of our financial statements and review of the interim financial statements. |
| (2) | Audit-related fees include the aggregate fees billed for related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under audit fees. |
| (3) | Tax fees represent the aggregated fees billed for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice, and tax planning. |
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Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
Item 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
Item 16G. CORPORATE GOVERNANCE
As a BVI company listed on Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, the Nasdaq Stock Market listing rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Other than as described in this section, our corporate governance practices do not differ from those followed by domestic companies listed on the Nasdaq Capital Market.
Nasdaq Stock Market listing rule 5635 generally provides that shareholder approval is required for U.S. domestic companies listed on the Nasdaq Capital Market prior to issuance (or potential issuance) of securities (i) issuances in connection with the acquisition of the stock or assets of another company if upon issuance the issued shares will equal to 20% or more of the number of shares or voting power outstanding prior to the issuance, or if certain specified persons have a 5% or greater interest in the assets or company to be acquired (Rule 5635(a)); (ii) issuances or potential issuances that will result in a change of control (Rule 5635(b)); (iii) issuances in connection with equity compensation arrangements (Rule 5635(c)); and (iv) 20% or greater issuances in transactions other than public offerings, as defined in the Nasdaq rules (Rule 5635(d)).
Notwithstanding this general requirement, Nasdaq Stock Market listing rule 5615(a)(3)(A) permits foreign private issuers to follow their home country practice rather than these shareholder approval requirements. The BVI does not require shareholder approval prior to any of the foregoing types of issuances. Our Company, therefore, is not required to obtain such shareholder approval prior to entering into a transaction with the potential to issue securities as described above. Our board of directors has elected to follow our home country rules as to such issuances and will not be required to seek shareholder approval prior to entering into such a transaction.
Item 16H. MINE SAFETY DISCLOSURE
Not applicable.
Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
Item 16J. INSIDER TRADING POLICIES
Our board of directors has
Item 16K. CYBERSECURITY
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Part III
Item 17. FINANCIAL STATEMENTS
We have elected to provide financial statements pursuant to Item 18.
Item 18. FINANCIAL STATEMENTS
The consolidated financial statements of Founder Group Limited, and its operating entities are included at the end of this annual report.
Item 19. EXHIBITS
EXHIBIT INDEX
| Exhibit No. | Description | |
| 1.1 | Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 99.3 to the Company’s Form 6-K filed on November 20, 2025) | |
| 2.1 | Specimen Certificate for Class A Ordinary Shares (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1 (File No. 333-293725), as amended, initially filed with the Securities and Exchange Commission on February 25, 2026) | |
| 2.2* | Description of Securities | |
| 4.1 | Form of Employment Agreement by and between executive officers and the Registrant (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No. 333-281167), as amended, initially filed with the Securities and Exchange Commission on August 1, 2024) | |
| 4.2 | Form of Indemnification Agreement with the Registrant’s directors and officers (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form F-1 (File No. 333-281167), as amended, initially filed with the Securities and Exchange Commission on August 1, 2024) | |
| 4.3 | Form of Director Offer Letter between the Registrant and its directors (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-1 (File No. 333-281167), as amended, initially filed with the Securities and Exchange Commission on August 1, 2024) | |
| 4.4 | Deed of Novation, dated June 1, 2021 among Solar Bina Engineering Sdn. Bhd., Xiamen Solar First Energy Technology Co., Ltd and Founder Energy Sdn. Bhd. (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1 (File No. 333-281167), as amended, initially filed with the Securities and Exchange Commission on August 1, 2024) | |
| 4.5 | Distributorship Agreement, dated January 1, 2020, between Xiamen Solar First Energy Technology Co., Ltd and Solar Bina Engineering Sdn. Bhd. (incorporated herein by reference to Exhibit 10.5 to the registration statement on Form F-1 (File No. 333-281167), as amended, initially filed with the Securities and Exchange Commission on August 1, 2024) | |
| 4.6 | Tenancy Agreement dated June 1, 2023, by and between Lee Seng Chi and Founder Energy Sdn. Bhd. (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form F-1 filed on August 1, 2024) | |
| 4.7 | Tenancy Agreement dated July 1, 2024, by and between Lee Seng Chi and Founder Energy Sdn. Bhd. (incorporated by reference to Exhibit 4.6 to the Company’s Annual Report on Form 20-F filed on April 25, 2025) | |
| 4.8 | Securities Purchase Agreement with Streeterville Capital, LLC dated March 13, 2025. (incorporated by reference to Exhibit 10.1 to the Company’s Form 6-K filed on March 19, 2025) | |
| 4.9 | Letter Agreement, dated April 8, 2025, by and between Founder Group Limited and Streeterville Capital, LLC. (incorporated by reference to Exhibit 10.1 to the Company’s Form 6-K filed on April 23, 2025) | |
| 4.10 | Securities Purchase Agreement with AVONDALE CAPITAL, LLC dated April 22, 2025. (incorporated by reference to Exhibit 10.1 to the Company’s Form 6-K filed on May 7, 2025) |
101
| 4.11 | Pre-Paid Purchase Agreement with AVONDALE CAPITAL, LLC dated April 22, 2025 incorporated by reference to Exhibit 10.11 to the Company’s Form F-1 filed on May 20, 2025) | |
| 4.12 | Registration Rights Agreement with AVONDALE CAPITAL, LLC dated April 22, 2025 incorporated by reference to Exhibit 10.12 to the Company’s Form F-1 filed on May 20, 2025) | |
| 4.13 | Letter Agreement with AVONDALE CAPITAL, LLC dated April 22, 2025 (incorporated by reference to Exhibit 10.13 to the Company’s Form F-1 filed on May 20, 2025) | |
| 4.14 | Securities Purchase Agreement, dated December 11, 2025, by and between Founder Group Limited and Streeterville Capital, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Form 6-K filed on December 18, 2025) | |
| 4.15 | Secured Convertible Promissory Note, dated December 11, 2025, by and between Founder Group Limited and Streeterville Capital, LLC (incorporated by reference to Exhibit 4.1 to the Company’s Form 6-K filed on December 18, 2025) | |
| 4.16 | Deposit Account Control Agreement, dated December 11, 2025, by and among Founder Capital, LLC, Lakeside Bank and Streeterville Capital, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Form 6-K filed on December 18, 2025.) | |
| 4.17 | Guaranty by Founder Capital, LLC, dated December 11, 2025 (incorporated by reference to Exhibit 10.3 to the Company’s Form 6-K filed on December 18, 2025.) | |
| 4.18 | Pledge Agreement, dated December 11, 2025, by and between Founder Group Limited and Streeterville Capital, LLC (incorporated by reference to Exhibit 10.4 to the Company’s Form 6-K filed on December 18, 2025) | |
| 8.1* | List of subsidiaries of the Registrant | |
| 11.1 | Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the registration statement on Form F-1 (File No. 333-281167), as amended, initially filed with the Securities and Exchange Commission on August 1, 2024) | |
| 11.2 | Insider Trading Compliance Manual of the Registrant (incorporated by reference to Exhibit 11.2 to the Company’s Annual Report on Form 20-F filed on April 25, 2025) | |
| 12.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 12.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 13.1** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 13.2** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 15.1* | Consent of JP Centurion & Partners PLT | |
| 97.1 | Compensation Recovery Policy of the Registrant (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 20-F filed on April 25, 2025) | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
| * | Filed with this annual report on Form 20-F |
| ** | Furnished with this annual report on Form 20-F |
102
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| Founder Group Limited | ||
| By: | /s/ Lee Seng Chi | |
| Lee Seng Chi | ||
| Chief Executive Officer, Director, and Chairman of the Board of Directors | ||
| (Principal Executive Officer) | ||
| Date: April 28, 2026 | ||
103
FOUNDER GROUP LIMITED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
| CONTENTS | PAGE(S) | |
| Report of Independent Registered Public Accounting Firm | F-2 | |
| Consolidated Statement of Financial Position as of December 31, 2024 and 2025 | F-4 | |
| Consolidated Statement of Comprehensive Income/(Loss) for the years ended December 31, 2023, 2024 and 2025 | F-5 | |
| Consolidated Statement of Changes in Equity for the years ended December 31, 2023, 2024 and 2025 | F-6 | |
| Consolidated Statement of Cash Flows for the years ended December 31, 2023, 2024 and 2025 | F-7 | |
| Notes to Consolidated Financial Statements | F-10 – F-47 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of
Founder Group Limited
No.17, Jalan Astana 1D,
Bandar Bukit Raja,
40150 Klang, Selangor Darul Ehsan,
Malaysia.
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of financial position of Founder Group Limited and its subsidiaries (collectively referred to as the “Company”) as of December 31, 2025 and 2024 and the related consolidated statement of comprehensive income/(loss), consolidated statement of changes in equity, and consolidated statement of cash flows for each of the years in the three-year period ended December 31, 2025, 2024 and 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, 2024 and 2023, in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from current year audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosure to which they relate.
F-2
Revenue and cost recognition on the service revenue
The Company engages in the business of provision and implementation of solar photovoltaic projects. The Company recognizes service revenue and cost as performance obligations satisfied over time using stage of completion method, based on reference to the Company’s progress towards completion and based on the proportion of cost incurred to date to the estimated total costs.
The recognition of revenue and cost relating to the service revenue is therefore dependent on the Company’s estimate and judgement exercised to determine the estimated total costs. There is a risk that the actual costs are different to those estimated, resulting in percentage of completion computed not reflecting the actual progress of the project.
Therefore, revenue and cost recognition of the service revenue is identified as critical audit matter due to the judgement involved to determine the stage of completion. A change in the estimates will affect the amount of revenue and cost recognized by the Company.
Our audit procedures in this area among others to test the revenue and cost recognition included the following:
| a) | Obtained an understanding of the processes and internal controls over the accuracy and timing of revenue recognized in the financial statements; |
| b) | Identified the performance obligations within in contractual agreements; |
| c) | Evaluated the assumptions applied in estimating the total project costs for each project phase by examining documentary evidence such as letters of award issued to contractors to support the budgeted gross project; |
| d) | Vouched samples of project costs incurred during the year to suppliers’ invoices or claims; and |
| e) | Recomputed the percentage of completion, the project revenue and cost recognized during the year. |
Recoverability and impairment of financial assets
The Company’s trade receivables amounted to USD4,762,484 and USD3,618,606 as at December 31, 2025 and 2024, respectively.
We focus and assess the recoverability of the financial assets involved judgements and estimation uncertainty in analyzing historical trend of payment, indicators of expected credit losses (ECL) and customer payment terms. Auditing financial assets is an essential component of the financial audit process.
Our audit procedures in this area among others to test the valuation of financial assets included the following:
| a) | Obtained debtor confirmation requests to the Company’s customers to confirm the balances of their outstanding receivables; |
| b) | Reviewed ageing analysis of receivables and testing the reliability thereof; |
| c) | Reviewed subsequent collections for major trade receivables and overdue amount; |
| d) | Assessed the appropriateness of the basis of default rate Management used in providing ECL; and |
| e) | Inquired management regarding the action plans to recover overdue amounts. |
 | ||
| We have served as the Company’s auditor since 2023. | ||
| April 28, 2026 |
PCAOB ID:
F-3
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2024 AND 2025
| Note | 2024 | 2025 | 2025 | |||||||||||
| RM | RM | USD | ||||||||||||
| ASSETS | ||||||||||||||
| Non-current assets | ||||||||||||||
| Plant and equipment | 4 | |||||||||||||
| Right-of-use assets | 5 | |||||||||||||
| Investment in an associate | 6 | |||||||||||||
| Trade receivables | 7 | |||||||||||||
| Deferred tax asset | 8 | |||||||||||||
| Total non-current assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and bank balances | ||||||||||||||
| Inventories | 9 | |||||||||||||
| Trade receivables | 7 | |||||||||||||
| Contract assets | 10 | |||||||||||||
| Other receivables and prepayment (Including RM | 11 | |||||||||||||
| Amount due from related parties | 12 | |||||||||||||
| Income tax receivable | 8 | |||||||||||||
| Total current assets | ||||||||||||||
| Total assets | ||||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current liabilities | ||||||||||||||
| Trade payables | 7 | |||||||||||||
| Other payables and accrued liabilities | 11 | |||||||||||||
| Convertible securities payable | 13 | |||||||||||||
| Bank and other borrowings | 14 | |||||||||||||
| Lease liabilities | 5 | |||||||||||||
| Amount due to related parties | 12 | |||||||||||||
| Income tax payable | 8 | |||||||||||||
| Total current liabilities | ||||||||||||||
| Non-current liabilities | ||||||||||||||
| Lease liabilities | 5 | |||||||||||||
| Bank and other borrowings | 14 | |||||||||||||
| Total non-current labilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Capital and reserves | ||||||||||||||
| Share capital | 15 | |||||||||||||
| Reserves | 16 | |||||||||||||
| Retained earnings | ||||||||||||||
| Other comprehensive income/(loss) | ( | ) | ( | ) | ||||||||||
| Attributable to equity owners of the Company | ||||||||||||||
| Non-controlling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025
| Note | 2023 | 2024 | 2025 | 2025 | ||||||||||||||
| RM | RM | RM | USD | |||||||||||||||
| Revenue from contract services | ||||||||||||||||||
| Revenue from sales of goods | ||||||||||||||||||
| Revenue from contract services – related parties | ||||||||||||||||||
| Revenue from sales of goods – related parties | ||||||||||||||||||
| Total revenue | 17 | |||||||||||||||||
| Cost of sales from contract services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Cost of sales from sales of goods | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Cost of sales for contract services – related parties | ( | ) | ( | ) | ( | ) | ||||||||||||
| Cost of sales from sales of goods – related parties | ||||||||||||||||||
| Total cost of sales | 18 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Gross profit | ||||||||||||||||||
| Selling and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Selling and administrative to related parties | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Income/(loss) from operation before income tax | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income | ||||||||||||||||||
| Other income from related parties | ||||||||||||||||||
| Finance cost | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Finance cost – related party | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Share of results of associate, net of tax | ||||||||||||||||||
| Profit/(loss) before income tax | ( | ) | ( | ) | ( | ) | ||||||||||||
| Income tax (expense)/benefit | 8 | ( | ) | ( | ) | ( | ) | |||||||||||
| Net profit/(loss) for the year | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other comprehensive income/(loss): | ||||||||||||||||||
| Currency translation arising from consolidation | ( | ) | ( | ) | ||||||||||||||
| Total comprehensive income/(loss) for the year | ( | ) | ( | ) | ( | ) | ||||||||||||
| Profit/(loss) attributable to: | ||||||||||||||||||
| Equity owners of the Company | ( | ) | ( | ) | ( | ) | ||||||||||||
| Non-controlling interests | ||||||||||||||||||
| Total | ( | ) | ( | ) | ( | ) | ||||||||||||
| Basic and diluted net income/(loss) per share: | ||||||||||||||||||
| Basic | ( | ) | ( | ) | ( | ) | ||||||||||||
| Diluted | ( | ) | ( | ) | ( | ) | ||||||||||||
| Weighted average number of common shares outstanding – Basic and diluted: | ||||||||||||||||||
| Basic | ||||||||||||||||||
| Diluted | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025
| Class A and Class B Shares | Share capital | Reserves | Retained earnings | Other comprehensive income/(loss) | Non- controlling interests | Total shareholders’ equity | ||||||||||||||||||||||
| RM | RM | RM | RM | RM | RM | |||||||||||||||||||||||
| Balance at January 1, 2023 | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | |||||||||||||||||||||||||||
| Foreign exchange reserve | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net profit for the year | — | |||||||||||||||||||||||||||
| Balance at December 31, 2023 | ||||||||||||||||||||||||||||
| Issuance of share capital | ||||||||||||||||||||||||||||
| Transaction costs of share issue | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation adjustment | — | |||||||||||||||||||||||||||
| Net loss for the year | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at December 31, 2024 | ||||||||||||||||||||||||||||
| Transaction costs of share issue | — | |||||||||||||||||||||||||||
| Convertible securities | ||||||||||||||||||||||||||||
| Non-controlling interests arising from a new subsidiary | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss for the year | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at December 31, 2025 | ( | ) | ||||||||||||||||||||||||||
| Share capital | Reserves | Retained earnings | Other comprehensive income | Non- controlling interests | Total shareholders’ equity | |||||||||||||||||||
| USD | USD | USD | USD | USD | USD | |||||||||||||||||||
| Balance at December 31, 2023 | ( | ) | ||||||||||||||||||||||
| Balance at December 31, 2024 | ||||||||||||||||||||||||
| Balance at December 31, 2025 | ( | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025
| 2023 | 2024 | 2025 | 2025 | |||||||||||||
| RM | RM | RM | USD | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
| Net profit/(loss) before income tax | ( | ) | ( | ) | ( | ) | ||||||||||
| Adjustments for: | ||||||||||||||||
| Depreciation of plant and equipment | ||||||||||||||||
| Plant and equipment written off | ||||||||||||||||
| Amortization of right-of-use assets | ||||||||||||||||
| Extinguishment of right-of-use asset and lease liabilities | ( | ) | ( | ) | ||||||||||||
| Imputed interest of lease liabilities | ||||||||||||||||
| Allowance for expected credit losses on trade receivables | ||||||||||||||||
| Reversal of allowance for expected credit losses on trade receivables | ( | ) | ( | ) | ||||||||||||
| Impairment loss on contract asset | ||||||||||||||||
| Reversal of impairment loss on contract asset | ( | ) | ( | ) | ||||||||||||
| Discount on convertible securities | ||||||||||||||||
| Interest income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Finance cost | ||||||||||||||||
| Unrealized foreign exchange (gains)/losses | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating profit/(loss) before changes in working capital | ( | ) | ||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Contract assets | ( | ) | ( | ) | ( | ) | ||||||||||
| Trade receivables | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Inventories | ( | ) | ( | ) | ||||||||||||
| Other receivables and prepayment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Contract liabilities | ( | ) | ||||||||||||||
| Trade payables | ( | ) | ( | ) | ( | ) | ||||||||||
| Other payables and accrued liabilities | ( | ) | ( | ) | ||||||||||||
| Cash flows used in operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax paid | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Investing activities | ||||||||||||||||
| Interest income | ||||||||||||||||
| Purchase of plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Subscription of shares in an associate | ( | ) | ( | ) | ||||||||||||
| Deposit pledged with licensed banks | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Financing activities | ||||||||||||||||
| Proceeds from issuance of shares | ||||||||||||||||
| Proceeds from issuance of convertible securities | ||||||||||||||||
| Interest paid | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Repayment of lease liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Amount due (to)/from related parties | ( | ) | ||||||||||||||
| Proceeds from bank borrowings | ||||||||||||||||
| Net cash provided by financing activities | ||||||||||||||||
| Net (decrease)/increase in cash and cash equivalents | ( | ) | ||||||||||||||
| Cash and cash equivalents at beginning of year | ||||||||||||||||
| Effect of exchange rate changes | ||||||||||||||||
| Cash and cash equivalents at end of year | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following as at the end of each reporting period:
| 2023 | 2024 | 2025 | 2025 | |||||||||||||
| RM | RM | RM | USD | |||||||||||||
| Cash and bank balances | ||||||||||||||||
| Deposits with licensed banks | ||||||||||||||||
| As per statement of financial position | ||||||||||||||||
| Less: | ||||||||||||||||
| Bank overdraft (Note 14) | ( | ) | ( | ) | ( | ) | ||||||||||
| Deposit pledged with licensed banks | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| As per statement of cash flows | ||||||||||||||||
Liabilities arising from financing activities
Reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities of the Company is as follows:
| At beginning of year | Cash flows | Non cash flows | At end of year | |||||||||||||
| RM | RM | RM | RM | |||||||||||||
| As of December 31, 2025 | ||||||||||||||||
| Convertible securities payable | ( | ) | ||||||||||||||
| Hire purchase payables | ( | ) | ||||||||||||||
| Term loan | ||||||||||||||||
| Trade financing | ||||||||||||||||
| Lease liabilities | ( | ) | ||||||||||||||
| ( | ) | |||||||||||||||
| At beginning of year | Cash flows | Non cash flows | At end of year | |||||||||||||
| USD | USD | USD | USD | |||||||||||||
| As of December 31, 2025 | ||||||||||||||||
| Convertible securities payable | ( | ) | ||||||||||||||
| Hire purchase payables | ( | ) | ||||||||||||||
| Term loan | ||||||||||||||||
| Trade financing | ||||||||||||||||
| Lease liabilities | ( | ) | ||||||||||||||
| ( | ) | |||||||||||||||
F-8
| At beginning of year | Cash flows | Non cash flows | At end of year | |||||||||||||
| RM | RM | RM | RM | |||||||||||||
| As of December 31, 2024 | ||||||||||||||||
| Hire purchase payables | ||||||||||||||||
| Term loan | ||||||||||||||||
| Trade financing | ||||||||||||||||
| Lease liabilities | ( | ) | ||||||||||||||
| At beginning of year | Cash flows | Non cash flows | At end of year | |||||||||||||
| RM | RM | RM | RM | |||||||||||||
| As of December 31, 2023 | ||||||||||||||||
| Term loan | ||||||||||||||||
| Trade financing | ||||||||||||||||
| Lease liabilities | ( | ) | ||||||||||||||
Cash outflows for leases as a lessee of the Company are as follows:
| 2023 | 2024 | 2025 | 2025 | |||||||||||||
| RM | RM | RM | USD | |||||||||||||
| Included in net cash used in operating activities: | ||||||||||||||||
| Expenses relating to short-term leases and leases for of low-value assets | ||||||||||||||||
| Included in net cash provided by financing activities: | ||||||||||||||||
| Repayment of lease liabilities | ||||||||||||||||
| Imputed interest of lease liabilities | ||||||||||||||||
F-9
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 1 | ORGANIZATION AND PRINCIPAL ACTIVITIES |
Founder Group Limited (the “Company”) was incorporated in the British Virgin Islands on May 18, 2023 with registered office at Trinity Chambers, P.O Box 4301, Road Town, Tortola, British Virgin Islands while principal place of business of the Company at No. 17, Jalan Astana 1D, Bandar Bukit Raja 41050 Klang, Selangor, Malaysia.
The group structure which represents the operating subsidiaries and dormant companies as of the reporting date is as follows:
Details of the Company and its subsidiaries (collectively, the “Group”) are shown in the table below:
| Percentage of effective ownership | ||||||||||||
| December 31, | ||||||||||||
| Name | Date of incorporation | 2025 | 2024 | Place of incorporation | Principal activities | |||||||
| % | % | |||||||||||
| Founder Group Limited | ||||||||||||
| Founder Energy Sdn. Bhd. | ||||||||||||
| Founder Energy (Singapore) Pte Ltd | ||||||||||||
| Founder Assets Sdn. Bhd. | ||||||||||||
| Founder Assets (Thailand) Company Limited | ||||||||||||
| Founder Solar Solution Sdn. Bhd. | ||||||||||||
| Founder Capital, LLC | ||||||||||||
On April 13, 2021, Mr. Lee Seng Chi
incorporate Founder Energy Sdn. Bhd. with
On August 25, 2021, Reservoir Energy
Link Bhd acquired
The Company provides engineering, procurement, construction and commissioning (“EPCC”) services for solar photovoltaic (“PV”) facilities in Malaysia primarily through Founder Energy Sdn. Bhd and Founder Solar Solution Sdn. Bhd.
F-10
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 1 | ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.) |
Founder Energy (Singapore) Pte Ltd was incorporated and domiciled in Singapore for future business expansion purpose in Singapore.
Founder Assets Sdn. Bhd. and Founder Assets (Thailand) Company Limited were incorporated and domiciled in Malaysia and Thailand respectively to carry out business in the investment of renewable energy project.
Founder Capital, LLC was incorporated and domiciled in State of Utah for the purpose of a private placement.
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION |
BASIS OF PREPARATION
The audited consolidated financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”).
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
ADOPTION OF NEW AND REVISED STANDARDS
At the date of authorization of those financial statements, our Group has not adopted the new and revised IFRS Accounting Standards and amendments to IFRS Accounting Standards that have been issued but are not yet effective to them. We do not anticipate that the adoption of these new and revised IFRS Accounting Standards pronouncements in future periods will have a material impact on our financial statements in the period of their initial adoption.
NEW AND REVISED IFRS IN ISSUE BUT NOT YET EFFECTIVE
The Group has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the International Accounting Standards Board (IASB) but are not yet effective for the current financial year:
| IFRSs and/or IC Interpretations (Including The Consequential Amendments) | Effective Date | |
F-11
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
IFRS Accounting Standards, interpretations and amendments effective for annual period beginning on or after a date yet to be confirmed:
| IFRSs and/or IC Interpretations (Including The Consequential Amendments) | Effective Date | |
| Amendments to IFRS 10, Consolidated Financial Statements | Deferred | |
| IAS 28, Investments in Associated and Joint Ventures – Sales or Contribution of Assets between an Investor and its Associate or Joint Venture | Deferred |
BASIS OF CONSOLIDATION
The acquisition of entities, businesses or assets under common control are accounted for in accordance with merger accounting.
The combined financial statements incorporate the financial statements of the combined entities or businesses in which the common control combination occurs as if they had been combined from the date when the combining entities or businesses first came under the control of the controlling party.
The combined financial statements have prepared using uniform accounting policies for like transactions and other events in similar circumstances.
All intra-group balances, transactions, income and expenses are eliminated in full on combination and the combined financial statements reflect external transactions only.
The net assets of the combined entities or businesses are combined using the existing carrying amounts from the controlling party’s perspective. No amount is recognized in respect of goodwill or excess of the acquirer’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over the acquisition cost at the time of common control combination. All differences between the cost of acquisition (fair value of consideration paid) and the amounts at which the assets and liabilities are recorded, arising from common control combination, have been recognized directly in equity as part of the capital reserve.
The combined statements of other comprehensive income include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combined entities or businesses first came under the common control, where this is a shorter period, regardless of the date of the common control combination.
Non-controlling interests comprise the portion of a subsidiary corporation’s net results of operations and its net assets, which is attributable to the interests that are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the unaudited interim condensed consolidated statement of comprehensive income, statement of changes in equity, and statement of financial position. Total comprehensive income is attributed to the non-controlling interests based on the irrespective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.
Investment in associates is accounted for in the consolidated financial statements of the Group using the equity method.
CONVENIENCE TRANSLATION
Translations of amounts in the audited consolidated statement of financial position, audited consolidated statement of comprehensive income and audited consolidated statement of cash flows from RM into USD as of and for the year ended December 31, 2025 are solely for the convenience of the reader. Unless otherwise noted, all translations from RM into USD for the year ended December 31, 2025 were calculated at the evening middle rate of = , as published by Bank Negara Malaysia, or an average rate of = .
F-12
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
FINANCIAL ASSETS
Classification and measurement
The Group classifies its financial assets at fair value through other comprehensive income, fair value through profit and loss and amortized cost.
The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial assets.
| 1. | Financial assets at FVTPL are initially recorded at fair value and transaction costs are expensed in the statement of income and comprehensive income. Realized and unrealized gains and income arising from changes in the fair value of the financial asset held at FVTPL are included in the statement of income and comprehensive income in the period in which they arise. The Company has classified cash as FVTPL. |
| 2. | Financial assets at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. There are no financial assets classified as FVTOCI. |
| 3. | Financial assets at amortized cost are initially recognized at fair value, net of transaction costs, and subsequently carried at amortized cost less any impairment. They are classified as current assets or non- current assets based on their maturity date. The Company has classified trade receivables, contract assets, other receivables and amounts due from related parties at amortized cost. |
Impairment
The Company assesses at end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired.
The Company recognizes expected credit losses (“ECL”) for accounts receivable based on the simplified approach. The simplified approach to the recognition of expected losses does not require the Company to track the changes in credit risk; rather, the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date from the date of the account receivable.
The Company measures expected credit loss by considering the risk of default over the contract period and incorporates forward-looking information into its measurement. ECLs are a probability-weighted estimate of credit losses.
ECLs are measured as the difference in the present value of the contractual cash flows that are due to the Company under the contract, and the cash flows that the Company expects to receive. The Company assesses all information available, including past due status, and forward looking macro-economic factors in the measurement of the ECLs associated with its assets carried at amortized cost.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
F-13
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS
Classification as debt or equity
Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Financial liabilities
Except for derivative financial instruments which are stated at fair value through profit or loss (“FVTPL”), all other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
Financial liabilities are classified as either financial liabilities at FVTPL or at amortized cost. The Company determines the classification of its financial liabilities at initial recognition.
Financial liabilities are classified as measured at amortized cost, net of transaction costs unless classified as FVTPL. The Company’s trade payables, other payables and accrued liabilities, amounts due to related parties, lease liabilities and bank loans are classified as measured at amortized cost.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
F-14
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
PLANT AND EQUIPMENT
Plant and equipment is recognized and
subsequently measured at cost less accumulated depreciation and any accumulated impairment losses, if any. When components of property
and equipment have different useful lives they are accounted for separately.
| Computer and Software | ||
| Motor Vehicles | ||
| Office Equipment | ||
| Equipment and Tools | ||
| Solar Asset Plants | ||
| Office Renovation | ||
| Plant and Machinery | ||
| Forklift | ||
| Right-Of-Use Assets |
Assets under construction are not depreciated as these assets are not available for use.
Plant or equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset, being the difference between the net disposal proceeds and the carrying amount, is recognized in profit or loss. The revaluation reserve included in equity is transferred directly to retained profits on retirement or disposal of the asset.
INVENTORIES
Inventories are stated at the lower of cost and net realizable value. Cost is determined based on weighted average method and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition.
Net realizable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Impairment of assets are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognized. The recoverable amount of an asset is the higher of the asset’s fair value less costs to sell and its value in use, which is measured by reference to discounted future cash flows using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognized in profit or loss.
When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognized to the extent of the carrying amount of the asset that would have been determined (net of amortization and depreciation) had no impairment loss been recognized. The reversal is recognized in profit or loss immediately.
CONTRACT ASSETS AND LIABILITIES
Contract assets includes unbilled amounts resulting from performance obligation satisfied measured under input method. Contract assets are subsequently transferred to trade receivable upon satisfaction of billing milestone base on contract and entitlement to pay becomes unconditional. A contract asset is subject to impairment requirement of IFRS 9.
Contract liabilities include advance payments from customers that performance obligation yet to satisfied. A contract liabilities is stated at cost and represents the obligation of the Group to transfer goods or services to a customer for which consideration has been received (or the amount is due) from the customers.
F-15
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
LEASES
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognizes a right-of-use asset and corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for low-value assets and short-term leases with 12 months or less. For these leases, the Group recognizes the lease payments as an operating expense on a straight-line method over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use assets and the associated lease liabilities are presented as a separate line item in the statement of financial position.
The right-of-use asset is initially measured at cost. Cost includes the initial amount of the corresponding lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, less any incentives received.
The right-of-use asset is subsequently measured at cost less accumulated depreciation and any impairment losses, and adjustment for any remeasurement of the lease liability. The depreciation starts from the commencement date of the lease. If the lease transfers ownership of the underlying asset to the Group or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of the right-of-use assets are determined on the same basis as those property, plant and equipment.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when there is a change in the future lease payments (other than lease modification that is not accounted for as a separate lease) with the corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recognized in profit or loss if the carrying amount has been reduced to zero.
PROVISIONS
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The discount rate shall be a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as interest expense in profit or loss.
REVENUE RECOGNITION
The Group accounts for its revenue under IFRS 15 Revenue from Contracts with Customers. (“IFRS 15”) The five-step model defined by IFRS 15 requires the Company to:
| (1) | identify its contracts with customers; |
| (2) | identify its performance obligations under those contracts; |
| (3) | determine the transaction prices of those contracts; |
| (4) | allocate the transaction prices to its performance obligations in those contracts; and |
| (5) | recognise revenue when each performance obligation under those contracts is satisfied. Revenue recognized when promised goods and services are transferred to the client in an amount that reflects the consideration expected in exchange for those services. |
F-16
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
REVENUE RECOGNITION (cont.)
Revenues are recognized when persuasive evidence of an arrangement exists, service has occurred, and all performance obligations have been performed pursuant to the terms of the agreement, the sales price is fixed on determinable and collectability is reasonably assured. Our revenue agreements generally do not include a right of return in relation to the delivered goods or services. Depending on the terms of the agreement and the laws that apply to the agreement, control of the services may be transferred over time or at a point in time. Control of the services is transferred over time if our performance:
| - | provides all of the benefits received and consumed simultaneously by the client; |
| - | creates and enhances an asset that the client controls as the Group performs; or |
| - | does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance complete to date. |
The Group recognises revenue from the following major sources:
| (i) | Large-scale solar projects (“LSS”) |
LSS are utility scale solar PV power plants with installed generating capacity of 1 MWac or more. Large-scale solar projects are ground mounted and are designed to supply power to the power grid. For the majority of our large-scale solar projects, we usually act as the contractor to the project awarder, who is the main contractor for a solar project. As an EPCC provider, we assume most of the responsibility for the entire project lifecycle, from design and engineering to material procurement, construction, installation, integration, and commissioning.
| (ii) | Commercial and industrial (“C&I”) solar projects |
C&I projects are smaller scale solar projects where the solar PV systems are installed on rooftops and are designed to generate electricity for commercial and industrial properties for their own consumption, such as factories, warehouses and commercial stores. For C&I projects, we usually sign a service contract with the project owner and act as the main contractor. As the main contractor, we engage in comprehensive services encompassing project design, engineering, equipment procurement, construction, and commissioning.
Rendering of Services
Revenue from providing product and services related to renewable energy services industry is recognized over time in the year in which the services are rendered using input method, determined based on the proportion of costs incurred for work performed to date over the estimated total costs. Transaction price is computed based on the price specified in the contract and adjusted for any variable consideration such as incentives and penalties.
A receivable is recognized when the services are rendered as this is the point over time that the consideration is unconditional because only the passage of time is required before the payment is due. If the services rendered exceed the payment received, a contract asset is recognized. If the payments exceed the services rendered, a contract liability is recognized.
Billings are made with a credit term
of
Defect liability period and performance warranty are usually 24 months from the date of Certificate of Practical Completion as provided in the contracts with customers.
F-17
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
REVENUE RECOGNITION (cont.)
Sale of Goods
Revenue is recognized at a point in time when the goods have been delivered to the customer and upon its acceptance, and it is probable that the Group will collect the considerations to which it would be entitled to in exchange for the goods sold. Billings are made with a credit term of 30 days to 90 days, which is consistent with market practice, therefore, no element of financing is deemed present.
The Company generally provides standard warranties to its customers, from date of delivery cost or satisfactory completion of the project. There is no warranty claim historically.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand, bank balances, fixed deposits, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.
SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.
INCOME TAX
Current tax assets and liabilities are the expected amount of income tax recoverable or payable to the taxation authorities, measured using tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period and are recognized in profit or loss except to the extent that the tax relates to items recognized outside profit or loss (either in other comprehensive income or directly in equity).
Deferred taxes are recognized using the liability method for temporary differences other than those that arise from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on the period.
Deferred tax assets are recognized for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that the related tax benefits will be realized.
Current and deferred tax items are recognized in correlation to the underlying transactions either in profit or loss, other comprehensive income or directly in equity.
Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity (or on different tax entities but they intend to settle current tax assets and liabilities on a net basis) and the same taxation authority.
F-18
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 2 | MATERIAL ACCOUNTING POLICIES INFORMATION (cont.) |
FOREIGN CURRENCY TRANSACTIONS
The functional currency used by the Company is the Malaysia Ringgit. Consequently, operations in currencies other than the Malaysia Ringgit are considered to be denominated in foreign currency and are recorded at the exchange rates in force on the dates of the operations.
At year-end, monetary assets and liabilities denominated in foreign currency are converted by applying the exchange rate on the balance sheet date. The profits or losses revealed are charged directly to the profit and loss account for the year in which they occur. Non-monetary items in foreign currency measured in terms of historical cost are converted at the exchange rate on the date of the transaction.
The exchange differences of the monetary items that arise both when liquidating them and when converting them at the closing exchange rate, are recognized in the results of the year, except those that are part of the investment of a business abroad, which are recognized directly in equity net of taxes until the time of its disposal.
EARNINGS PER SHARE
Basic income per share is calculated by dividing the income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding in the period. For all periods presented, the income attributable to ordinary shareholders equals the reported income attributable to owners of the Company.
Diluted income per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of ordinary shares outstanding for the calculation of diluted income per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase ordinary shares at the average market price during the period.
The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding, as of December 31, 2025 and 2024.
| 3 | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year other than as disclosed below:-
Impairment of Trade Receivables and Contract Assets
The Group uses the simplified approach to estimate a lifetime expected credit loss allowance for all trade receivables and contract assets. The contract assets are grouped with trade receivables for impairment assessment because they have substantially the same risk characteristics as the trade receivables for the same types of contracts. The Group develops the expected loss rates based on the payment profiles of past sales and the corresponding historical credit losses, and adjusts for qualitative and quantitative reasonable and supportable forward-looking information. If the expectation is different from the estimation, such difference will impact the carrying value of trade receivables and contract assets.
Contract Revenue Recognition
Revenue from providing product and services related to renewable energy services industry is recognized over time measure via input method, determined based on the proportion of costs incurred for work performed to date over the estimated total costs. Transaction price is computed based on the price specified in the contract and adjusted for any variable consideration such as incentives and penalties. The Group applied judgement and assumptions significantly affects the determination of the amount and the timing of revenue recognized from contract with customers for commercial& industrial and large scale solar. The Group measures the performance of service work done by comparing the actual costs incurred with the estimated total costs required to complete the services. Significant judgements are required to estimate the total contract costs to complete. In making these estimate, management relied on estimates and also on past experience of completed projects. A change in estimate will directly affect the revenue to be recognized.
F-19
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 4 | PLANT AND EQUIPMENT |
| As of January 1, 2025 | Addition | Adjustment | As of December 31, 2025 | |||||||||||||
| At cost | RM | RM | RM | RM | ||||||||||||
| Computer and Software | ||||||||||||||||
| Motor Vehicle | ||||||||||||||||
| Office Equipment | ||||||||||||||||
| Equipment and Tools | ||||||||||||||||
| Office Renovation | ||||||||||||||||
| Solar Asset Under Construction | ( | ) | ||||||||||||||
| Plant and Machinery & Solar Asset Plant | ( | ) | ||||||||||||||
| Forklift | ||||||||||||||||
| Capital Work-in-progress | ||||||||||||||||
| ( | ) | |||||||||||||||
| As of January 1, 2025 | Depreciation charge during the year | Adjustment | As
of | |||||||||||||
| Accumulated depreciation | RM | RM | RM | RM | ||||||||||||
| Computer and Software | ||||||||||||||||
| Motor Vehicle | ||||||||||||||||
| Office Equipment | ||||||||||||||||
| Equipment and Tools | ||||||||||||||||
| Office Renovation | ||||||||||||||||
| Plant and Machinery & Solar Asset Plant | ||||||||||||||||
| Forklift | ||||||||||||||||
| As of January 1, 2024 | Addition | Written off | As
of | |||||||||||||
| At cost | RM | RM | RM | RM | ||||||||||||
| Computer and Software | ||||||||||||||||
| Motor Vehicle | ||||||||||||||||
| Office Equipment | ( | ) | ||||||||||||||
| Equipment and Tools | ||||||||||||||||
| Signboard | ( | ) | ||||||||||||||
| Office Renovation | ( | ) | ||||||||||||||
| Solar Asset Under Construction | ||||||||||||||||
| Plant and Machinery & Solar Asset Plant | ||||||||||||||||
| Forklift | ||||||||||||||||
| Capital Work-in-progress | ||||||||||||||||
| ( | ) | |||||||||||||||
F-20
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 4 | PLANT AND EQUIPMENT (cont.) |
| As of January 1, 2024 |
Depreciation charge during the year | Written off | As of December 31, 2024 |
|||||||||||||
| Accumulated depreciation | RM | RM | RM | RM | ||||||||||||
| Computer and Software | ||||||||||||||||
| Motor Vehicle | ||||||||||||||||
| Office Equipment | ( |
) | ||||||||||||||
| Equipment and Tools | ||||||||||||||||
| Signboard | ( |
) | ||||||||||||||
| Office Renovation | ( |
) | ||||||||||||||
| Plant and Machinery & Solar Asset Plant | ||||||||||||||||
| Forklift | ||||||||||||||||
| ( |
) | |||||||||||||||
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| Carrying amounts | RM | RM | Convenience Translation USD | |||||||||
| Computer and Software | ||||||||||||
| Motor Vehicle | ||||||||||||
| Office Equipment | ||||||||||||
| Equipment and Tools | ||||||||||||
Signboard | ||||||||||||
| Office Renovation | ||||||||||||
| Solar Asset Under Construction | ||||||||||||
| Plant and Machinery & Solar Asset Plant | ||||||||||||
| Forklift | ||||||||||||
| Capital Work-in-progress | ||||||||||||
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Depreciation expenses, class under cost of sale | ||||||||||||
| Depreciation expenses, class separately from cost of sale | ||||||||||||
| Total depreciation expenses | ||||||||||||
F-21
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 4 | PLANT AND EQUIPMENT (cont.) |
During the financial year, the Group made the following cash payments to purchase plant and equipment.
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Purchase of plant and equipment | ||||||||||||
| Financed by way of hire purchase arrangements | ( | ) | ( | ) | ( | ) | ||||||
| Other payables | ( | ) | ||||||||||
| Cash payments on purchase of plant and equipment | ||||||||||||
The carrying amount of the plant and equipment of the Group under hire purchase arrangements at the end of the reporting period are as follows:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Motor vehicles | ||||||||||||
F-22
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 5 | RIGHT-OF-USE ASSETS AND LEASE LIABILITIES |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Right-of-use assets | ||||||||||||
| Balance brought forward | ||||||||||||
| Less: Amortization | ( | ) | ( | ) | ( | ) | ||||||
| Termination of right-of-use asset | ( | ) | ||||||||||
| Add: New lease recognized | ||||||||||||
| Balance carried forward | ||||||||||||
| Lease liabilities | ||||||||||||
| Balance brought forward | ||||||||||||
| Add: Imputed interest | ||||||||||||
| Less: Principal repayment | ( | ) | ( | ) | ( | ) | ||||||
| Termination of lease liability | ( | ) | ||||||||||
| Add: New lease recognized | ||||||||||||
| Balance carried forward | ||||||||||||
Future minimum lease payments together with the present value of net minimum lease payments are as follows:
| Minimum lease payment: | ||||||||||||
| Not later than one (1) year | ||||||||||||
| Later than one (1) year and not later than five (5) years | ||||||||||||
| Less: Future interest charges | ( | ) | ( | ) | ( | ) | ||||||
| Present value of lease payment | ||||||||||||
| Repayment as follows: | ||||||||||||
| Lease liabilities current portion | ||||||||||||
| Lease liabilities non-current portion | ||||||||||||
| The followings are the amounts recognized in profit or loss: | ||||||||||||
| Depreciation charges of right-of-use assets | ||||||||||||
| Interest expense on lease liabilities | ||||||||||||
| Extinguishment of right-of-use assets and liabilities | ( | ) | ||||||||||
| Expense relating to short-term leases and leases of low-value assets | ||||||||||||
| Total |
On July 1, 2024, Founder Energy Sdn. Bhd. had entered into
a Tenancy Agreement with Mr. Lee Seng Chi for the rental of our principal office for a period of two years with an option to renew for
an additional year with monthly rental amounted RM
On August 13, 2025, Founder Energy
Sdn. Bhd. had entered into Tenancy Agreements for the rental of our two satellite offices for a period of two years with an option to
renew for an additional two years with monthly rental total amounted RM
Extension options
The Group’s office leases include extension options of between one (1) and two (2) years, which are subject to mutual agreement between the Group and the respective lessors. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The Group assesses at lease commencement and reassessed when relevant, to determine whether it is reasonably certain that they will be exercised.
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Lease liabilities recognised (discounted) | ||||||||||||
| Potential future lease payments not included in lease liabilities (discounted) | ||||||||||||
F-23
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 6 | INVESTMENT IN AN ASSOCIATE |
| As of December 31, 2025 | As of December 31, 2025 | |||||||
| RM | Convenience Translation USD | |||||||
| Shares at cost | ||||||||
| Share of post-acquisition reserves | ||||||||
Details of associate is as follows:
| Percentage of effective ownership | ||||||||||||
| December 31, | ||||||||||||
| Name | 2025 | 2024 | Place of incorporation | Principal activities | ||||||||
| % | % | |||||||||||
| RL Solar Assets Sdn. Bhd. (Formerly known as RL Sunseap Energy Sdn. Bhd.) | ||||||||||||
The summarised financial information of the associate is as follows:
| As of December 31, 2025 | As of December 31, 2025 | |||||||
| RM | Convenience Translation USD | |||||||
| Carrying amount | ||||||||
| Share of results: | ||||||||
| Group’s share of profit from continuing operations | ||||||||
| Group’s share of total comprehensive income | ||||||||
On September 15, 2025, Founder
Assets Sdn. Bhd. acquired
F-24
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 7 | TRADE RECEIVABLES AND TRADE PAYABLES |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Trade receivables | ||||||||||||
| Non-current | ||||||||||||
| Project retention receivables | ||||||||||||
| Current | ||||||||||||
| Trade receivables | ||||||||||||
| Project retention receivables | ||||||||||||
| Accrued liquidated ascertained damages to sub-contractors | ||||||||||||
| Less: Provision for expected credit loss | ( | ) | ( | ) | ( | ) | ||||||
| Total current trade receivables | ||||||||||||
| Total trade receivables | ||||||||||||
| Increase/(Decrease) in provision for expected credit loss | ||||||||||||
| Increase in total trade receivables | ( | ) | ( | ) | ||||||||
Trade receivables are non-interest bearing
and generally have
The aging of the Group’s net trade receivables is as follows:
| Gross | Impaired | Total | ||||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| As of December 31, 2025 | ||||||||||||||||
| Current | ( | ) | ||||||||||||||
| Past due | ||||||||||||||||
| 1 – 30 days | ( | ) | ||||||||||||||
| 31 – 60 days | ( | ) | ||||||||||||||
| 61 – 90 days | ( | ) | ||||||||||||||
| More than 90 days | ( | ) | ||||||||||||||
| ( | ) | |||||||||||||||
| ( | ) | |||||||||||||||
| Gross | Impaired | Total | ||||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| As of December 31, 2024 | ||||||||||||||||
| Current | ( | ) | ||||||||||||||
| Past due | ||||||||||||||||
| 1 – 30 days | ( | ) | ||||||||||||||
| 31 – 60 days | ( | ) | ||||||||||||||
| 61 – 90 days | ( | ) | ||||||||||||||
| More than 90 days | ( | ) | ||||||||||||||
| ( | ) | |||||||||||||||
| ( | ) | |||||||||||||||
F-25
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 7 | TRADE RECEIVABLES AND TRADE PAYABLES (cont.) |
The movements in the Group’s allowance for expected credit losses are as follows:
| ECL – not credit impaired | ECL – credit impaired | Total | ||||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Trade receivables | ||||||||||||||||
| As of January 1, 2024 | ||||||||||||||||
| Charge for the year | ||||||||||||||||
| Reversal during the year | ( | ) | ( | ) | ( | ) | ||||||||||
| As of December 31, 2024 | ||||||||||||||||
| As of January 1, 2025 | ||||||||||||||||
| Charge for the year | ||||||||||||||||
| Reversal during the year | ( | ) | ( | ) | ( | ) | ||||||||||
| As of December 31, 2025 | ||||||||||||||||
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Trade payables | ||||||||||||
| Trade payables | ||||||||||||
| Project retention payables | ||||||||||||
| Total trade payables | ||||||||||||
Included in trade payables is related
party balance amounting to (December 31, 2024: RM
Trade payables are non-interest bearing
and generally on cash basis or credit terms of
F-26
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 8 | DEFERRED TAX ASSET AND INCOME TAX (EXPENSE)/BENEFIT |
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Income tax (expense)/benefit | ||||||||||||||||
| Tax (expense)/benefit recognized in profit or loss | ||||||||||||||||
| Current income tax | ||||||||||||||||
| Current financial year | ( | ) | ( | ) | ( | ) | ||||||||||
| Prior financial year | ||||||||||||||||
| Deferred taxation | ||||||||||||||||
| Current financial year | ||||||||||||||||
| Prior financial year | ( | ) | ( | ) | ||||||||||||
| Total income tax (expense)/benefit recognized in profit or loss | ( | ) | ( | ) | ( | ) | ||||||||||
British Virgin Islands
The Company is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law.
Malaysia
Founder Energy Sdn. Bhd., Founder Assets
Sdn. Bhd. and Founder Solar Solution Sdn. Bhd. are subject to Malaysia Corporate Tax on the taxable income as reported in its statutory
financial statements adjusted in accordance with relevant Malaysia tax laws. The standard corporate income tax rate in Malaysia is calculated
at
The unutilized tax losses can be carried forward for a maximum period of consecutive years to offset future taxable income.
Singapore
Founder Energy (Singapore) Pte Ltd is
subject to Singapore Corporate Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with
relevant Singapore tax laws. The standard corporate income tax rate in Singapore is
Thailand
Founder Assets (Thailand) Company Limited
is subject to Thailand Corporate Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with
relevant Thailand tax laws. The standard corporate income tax rate in Thailand is
Utah
Founder Capital, LLC has not elected to be treated as a corporation for U.S. tax purposes and is therefore classified as a disregarded entity. As such, it is not a separate taxable entity, and its income is treated as that of its foreign parent, Founder Group Limited. Accordingly, no Utah corporate income tax should apply, assuming no U.S. trade or business is conducted.
F-27
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 8 | DEFERRED TAX ASSET AND INCOME TAX (EXPENSE)/BENEFIT (cont.) |
The numerical reconciliations between the tax expense and the product of accounting loss multiplied by the applicable tax rates of the Group are as follows:
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Net income/(loss) before taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Tax at the Malaysian statutory income tax rate of | ( | ) | ( | ) | ( | ) | ||||||||||
| Tax effects in respect of: | ||||||||||||||||
| Different tax rates in other countries | ||||||||||||||||
| Deferred tax not recognized on previously unrecognized origination and reversal of temporary differences | ||||||||||||||||
| Adjustment in respect of current income tax of prior years | ( | ) | ( | ) | ||||||||||||
| Adjustment in respect of deferred tax of prior years | ||||||||||||||||
| Non-deductible expenses | ||||||||||||||||
| Non-taxable income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Tax expense/(benefit) | ( | ) | ||||||||||||||
The deferred tax assets are made up of the following:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| At beginning of year | ||||||||||||
| Recognised in profit or loss | ||||||||||||
| At end of year | ||||||||||||
F-28
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 8 | DEFERRED TAX ASSET AND INCOME TAX (EXPENSE)/BENEFIT (cont.) |
Presented after appropriate offsetting as follows:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Deferred tax asset | ||||||||||||
| Deferred tax liability | ||||||||||||
The deferred tax asset as at the end of the reporting period are made up of the temporary differences arising from:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Deferred tax asset | ||||||||||||
| Plant and equipment | ||||||||||||
| Provisions and others | ||||||||||||
| Unabsorbed capital allowances | ||||||||||||
| Deferred tax liability | ||||||||||||
| Plant and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Other temporary differences | ( | ) | ||||||||||
| Presented after appropriate offsetting | ||||||||||||
| At 24% | ||||||||||||
F-29
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 9 | INVENTORIES |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Inventories | ||||||||||||
The amount of inventories recognized
as an expense in cost of sales of the Group was RM
| 10 | CONTRACT ASSETS AND CONTRACT LIABILITIES |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Contract Assets | ||||||||||||
| Contract cost | ||||||||||||
| Contract margin | ||||||||||||
| Contract revenue recognized | ||||||||||||
| Less: Bill to trade receivables | ( | ) | ( | ) | ( | ) | ||||||
| Contract assets carried forward | ||||||||||||
| Contract cost assets | ||||||||||||
| Less: Provision for impairment loss | ( | ) | ||||||||||
| Add: Accrued revenue | ||||||||||||
| Balance carried forward | ||||||||||||
| Decrease/(Increase) in contract assets | ( | ) | ( | ) | ||||||||
| (Increase)/Decrease in provision for impairment loss | ( | ) | ||||||||||
Significant increase in contract assets for the year ended December 31, 2025 primarily attributable to higher revenue recognised for unbilled services transferred to customers, where performance obligations have been satisfied in advance of billing to customers.
F-30
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 11 | OTHER RECEIVABLES AND PREPAYMENT AND OTHER PAYABLES AND ACCRUED LIABILITIES |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Other Receivables | ||||||||||||
| Project deposits | ||||||||||||
| Prepayment to suppliers | ||||||||||||
| Other receivables | ||||||||||||
| Other deposits | ||||||||||||
| Other prepayments | ||||||||||||
| Other current assets | ||||||||||||
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Other Payables | ||||||||||||
| Accrued staff cost | ||||||||||||
| Other payables and accrued expenses | ||||||||||||
| Prepayment from customer | ||||||||||||
Included in prepayment to suppliers is related
party balance amounting to RM1,
| 12 | AMOUNT DUE FROM/(TO) RELATED PARTIES |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Trade | ||||||||||||
| Amount due from Solar Bina Engineering Sdn. Bhd. | ||||||||||||
| Amount due from RL Sunseap Energy Sdn. Bhd. | ||||||||||||
| Amount due from Reservoir Link Renewable Sdn. Bhd. | ||||||||||||
| Amount due from RL Sigma Engineering Sdn. Bhd. | ||||||||||||
| Non-trade | ||||||||||||
| Amount due from Solar Bina Engineering Sdn. Bhd. | ||||||||||||
| Amount due from Reservoir Link Energy Bhd | ||||||||||||
| Amount due from RL Sunseap Energy Sdn. Bhd. | ||||||||||||
| Amount due from related parties | ||||||||||||
| Non-trade | ||||||||||||
| Amount due to Reservoir Link Energy Bhd | ||||||||||||
| Amount due to Reservoir Link Sdn. Bhd. | ||||||||||||
| Amount due to Solar Bina Engineering Sdn. Bhd. | ||||||||||||
| Amount due to Mr. Lee Seng Chi | ||||||||||||
| Amount due to related parties | ||||||||||||
Both amount due to and from related
parties on an on-demand basis. Other than amount due to and from related parties that is trade nature, amount due to and from related
parties subject to interest rate of BLR +
F-31
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 12 | AMOUNT DUE FROM/(TO) RELATED PARTIES (cont.) |
Material Transactions with Related Parties
| Name of Related Party | Relationship to Us | |
| Solar Bina Engineering Sdn. Bhd. | ||
| Reservoir Link Energy Bhd | ||
| Reservoir Link Holdings Sdn. Bhd. | ||
| Reservoir Link Sdn. Bhd. | ||
| Reservoir Link Renewable Sdn. Bhd. | ||
| RL Sigma Engineering Sdn. Bhd. | ||
| Lee Seng Chi | ||
| RL Solar Assets Sdn. Bhd. (Formerly known as RL Sunseap Energy Sdn. Bhd.) |
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Revenue from Solar Bina Engineering Sdn. Bhd. | ||||||||||||||||
| Revenue from Reservoir Link Energy Bhd | ||||||||||||||||
| Revenue from RL Sunseap Energy Sdn. Bhd. | ||||||||||||||||
| Revenue from Reservoir Link Renewable Sdn. Bhd. | ||||||||||||||||
| Revenue from RL Sigma Engineering Sdn. Bhd. | ||||||||||||||||
| Revenue from SRM Utama Selambau Sdn. Bhd. | ||||||||||||||||
| Total revenue from related parties | ||||||||||||||||
| Purchases from Reservoir Link Renewable Sdn. Bhd. | ||||||||||||||||
| Expenses charged to Reservoir Link Energy Bhd | ||||||||||||||||
| Expenses charged by Reservoir Link Energy Bhd | ||||||||||||||||
| Expenses charged by Solar Bina Engineering Sdn. Bhd. | ||||||||||||||||
| 102,109 | 115,419 | 245,796 | 60,526 | |||||||||||||
| Rental payment to Mr. Lee Seng Chi | ||||||||||||||||
| Finance cost charged by Reservoir Link Energy Bhd | ||||||||||||||||
| Finance cost charged by Reservoir Link Sdn. Bhd. | ( | ) | ||||||||||||||
| 318,332 | 150,591 | 70,229 | 17,293 | |||||||||||||
| Advances to Reservoir Link Energy Bhd | ||||||||||||||||
| Advances to Solar Bina Engineering Sdn. Bhd. | ||||||||||||||||
The related party transactions mainly derived from the sales of renewable energy services, recharge of expenses, rental expenses, interest expenses on advances and management fees.
The interest expenses and management fees charged by Reservoir Link Energy Bhd are costs incurred or shared on behalf of the Group and interest expense on funds advanced to the Group.
The significant related party transactions with RL Sunseap Energy Sdn. Bhd., Reservoir Link Renewable Sdn. Bhd. and RL Sigma Engineering Sdn. Bhd. were attributable to several contracts secured through these entities as solar assets investors. The Group was appointed as the contractor to provide engineering, procurement, construction and commissioning works for rooftop solar photovoltaic facilities.
F-32
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 13 | CONVERTIBLE SECURITIES PAYABLE |
The amount of convertible securities payable consists of the followings:
| As of December 31, 2025 |
As of December 31, 2025 |
|||||||||||
| RM | Convenience Translation USD |
|||||||||||
| At beginning of year | ||||||||||||
| Addition | ||||||||||||
| Conversion | ( |
) | ( |
) | ||||||||
| At end of year | ||||||||||||
Securities Purchase Agreement with Avondale Capital, LLC
On April 22, 2025,
the Company entered into a Securities Purchase Agreement with Avondale Capital, LLC, a Utah limited liability company (“Avondale”),
pursuant to which the Company issue and sell to the Avondale an aggregate amount of up to USD
On April 24, 2025,
the Company received net proceeds of USD
During the year
ended December 31, 2025, the Company received net proceeds of USD
On May 30, 2025,
the Company delivered
During the year
ended December 31, 2025, Avondale purchased
Purchase Agreement with Streeterville Capital, LLC
On December 11,
2025, the Company entered into a Purchase Agreement with Streeterville Capital, LLC (“Streeterville”), pursuant to which the
Company issue and sell to the Streeterville convertible promissory note (the “Note”), in the original principal amount of
USD
On December 16,
2025, Streeterville paid USD
F-33
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 14 | BORROWINGS |
| Note | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||
| RM | RM | Convenience Translation USD | ||||||||||||
| Non-current liabilities | ||||||||||||||
| Hire purchase payables | ||||||||||||||
| Term loan | ||||||||||||||
| Current liabilities | ||||||||||||||
| Bank overdraft | ||||||||||||||
| Hire purchase payables | ||||||||||||||
| Term loan | ||||||||||||||
| Trade financing | ||||||||||||||
| Total borrowings | ||||||||||||||
| Bank overdraft | (a) | |||||||||||||
| Hire purchase payables | (b) | |||||||||||||
| Term loan | (a) | |||||||||||||
| Trade financing | (a) | |||||||||||||
(a)
| Capacity | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Line of Credit | ||||||||||||||||
| AmBank Islamic Bank – Domestic Recourse Factoring, at Base Financing Rate – 1% | ||||||||||||||||
| AmBank Islamic Bank – Invoice Financing, at Base Financing Rate | ||||||||||||||||
| AmBank Islamic Bank – Accepted Bills, at Islamic Interbank Discounting Rate + 1.50% | ||||||||||||||||
| AmBank Islamic Bank – Overdraft, Base Financing Rate +1.0% | ||||||||||||||||
| CIMB Islamic Bank – Invoice Financing, at Cost of Funds + 1.5% | ||||||||||||||||
| CIMB Islamic Bank – Overdraft, at Base Financing Rate +0.5% | ||||||||||||||||
| Maybank Islamic Bank – Invoice Financing, at Cost of Funds + 1.5% | ||||||||||||||||
| Maybank Islamic Bank – Overdraft, at Base Financing Rate +1.0% | ||||||||||||||||
| AmBank Islamic Bank – Term Financing, at Base Financing Rate – 1% | ||||||||||||||||
| AmBank Islamic Bank – Term Financing, at Base Financing Rate – 1.75% | ||||||||||||||||
| AmBank Islamic Bank – Term Financing, at Base Financing Rate – 0.75% | ||||||||||||||||
F-34
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 14 | BORROWINGS (cont.) |
The Group entered into banking facilities with AmBank Islamic Bank and is secured by:
| i) | Corporate guarantee from the Group; | |
| ii) | Fixed deposits pledged by Founder Energy Sdn. Bhd.; |
| iii) | First legal charge over the escrow account, debt reserve account and sinking fund account; and |
| iv) | Insurance policy for the Directors of the Group. |
The Group entered into a banking facility with Maybank Islamic Bank and is secured by:
| i) | Corporate guarantee from the Group; |
| ii) | Fixed deposits pledged by Founder Energy Sdn. Bhd. and |
| iii) | Sinking fund pledged by Founder Energy Sdn. Bhd. |
The Group entered into a banking facility with CIMB Islamic Bank and is secured by:
| i) | Corporate guarantee from the Group; |
| ii) | Fixed deposits pledged by Founder Energy Sdn. Bhd.; and |
| iii) | Sinking fund account. |
| (b) | Hire purchase payable |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Minimum hire purchase payment | ||||||||||||
| Not later than one (1) year | ||||||||||||
| Later than one (1) year and not later than five (5) years | ||||||||||||
| Less: Future interest charges | ( | ( | ) | ( | ) | |||||||
| Present value of hire purchase payment | ||||||||||||
| Repayable as follows: | ||||||||||||
| Non-current liabilities | ||||||||||||
| Current liabilities | ||||||||||||
The hire purchase payables of the Group
bears interest ranging from
F-35
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 14 | BORROWINGS (cont.) |
| (c) |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Maturities | ||||||||||||
| Within 1 year | ||||||||||||
| 1 - 5 years | ||||||||||||
| More than 5 years | ||||||||||||
| Total | ||||||||||||
The interest rate profile of the Group’s interest-bearing financial instruments based on their carrying amount as at the end of the reporting period are as follows based on their carrying amount as at the end of the reporting period are as follows:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Fixed rate instrument | ||||||||||||
| Hire purchase payables | ||||||||||||
| Floating rate instrument | ||||||||||||
| Bank borrowings | ||||||||||||
| Total | ||||||||||||
Sensitivity analysis for variable rate instruments
Sensitivity analysis of interest rate for the floating rate instruments at the end of each reporting period, assuming all other variables remain constant, is as follows:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| Effects of 50 basis point changes | RM | RM | Convenience Translation USD | |||||||||
| Floating rate instrument | ||||||||||||
| Bank borrowings | ||||||||||||
Sensitivity analysis for fixed rate instruments at the end of each reporting period is not presented as fixed rate instruments are not affected by changes in interest rates.
F-36
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 15 | SHARE CAPITAL |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||||||||
| Paid up capital: | Number of ordinary shares – Class A and Class B Shares (6) | RM | RM | Convenience Translation USD | ||||||||||||||||
| At beginning of year | ||||||||||||||||||||
| Issuance of share capital (1) | ||||||||||||||||||||
| Issuance of share capital (2) | ||||||||||||||||||||
| Transaction costs of share issue | ( | ) | ||||||||||||||||||
| Issuance of share capital (3) | ||||||||||||||||||||
| Issuance of share capital (4) | ||||||||||||||||||||
| Issuance of share capital (5) | ||||||||||||||||||||
| At end of year | ||||||||||||||||||||
As
of December 31, 2023, the Company has authorized
| (1) |
| (2) |
| (3) | ||
| (4) | ||
| (5) | ||
| (6) |
F-37
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 16 | RESERVES |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Bargain purchases from acquisition of Founder Energy Sdn. Bhd. under common control accounted as merger reserve | ||||||||||||
| Bargain purchase from acquisition of plant, equipment and inventory from Solar Bina Engineering Sdn. Bhd. under common control accounted as other reserve | ||||||||||||
| Bargain purchase from acquisition of business from Solar Bina Engineering Sdn. Bhd. under common control accounted as other reserve | ||||||||||||
| 17 | REVENUE |
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Revenue from contract services | ||||||||||||||||
| Revenue from sales of goods | ||||||||||||||||
| Revenue from contract services – related parties | ||||||||||||||||
| Revenue from sales of goods – related party | — | |||||||||||||||
| Timing of revenue recognition: | ||||||||||||||||
| Point in time | ||||||||||||||||
| Over time | ||||||||||||||||
| Unsatisfied performance obligation | ||||||||||||||||
Revenue from contract services primarily involved in project execution, including construction, installation and integration works, testing and commissioning of our solar projects. Revenue from sales of goods involved in supply and selling of solar mounting structure and its accessories.
Unsatisfied performance obligation was duly satisfied and recognized as revenue within 12 months after the reporting year end, respectively. Revenue from contract services primarily involved in project execution, including construction, installation and integration works, testing and commissioning of our solar projects. Revenue from sales of goods involved in supply and selling of parts and accessories.
All of the Group’s revenue is derived exclusively from customers located in Malaysia.
F-38
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 18 | COST OF SALE |
| As of December 31, 2023 |
As of December 31, 2024 |
As of December 31, 2025 |
As of December 31, 2025 |
|||||||||||||
| RM | RM | RM | Convenience Translation USD |
|||||||||||||
| Material cost | |
|
||||||||||||||
| Construction cost | |
|
||||||||||||||
| Staff cost | |
|
||||||||||||||
| Logistic cost | |
|
||||||||||||||
| Tools & machinery | |
|
||||||||||||||
| Miscellaneous | |
|
||||||||||||||
| Depreciation | |
|
||||||||||||||
| Total cost of sale | ||||||||||||||||
The cost of sale incurred pertaining
to revenue derived from related party is amounting to RM
Included in Cost of Sale of the Group
is liquidated ascertained damages charged to subcontractors amounting to RM (December 31, 2024: RM
| 19 | EMPLOYEES SALARY AND RELATED COSTS |
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| RM | RM | RM | Convenience Translation USD | |||||||||||||
| Director fees | ||||||||||||||||
| Director salaries | ||||||||||||||||
| Admin salaries | ||||||||||||||||
| Technical staff salaries | ||||||||||||||||
| Total | ||||||||||||||||
| Director related expenses | ||||||||||||||||
| Admin related expenses | ||||||||||||||||
| Technical staff related expenses | ||||||||||||||||
| Total | ||||||||||||||||
F-39
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 20 | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT |
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Financial assets at amortized cost | ||||||||||||
| Trade receivables | ||||||||||||
| Other receivables | ||||||||||||
| Amount due from related parties | ||||||||||||
| Cash and bank balances | ||||||||||||
| Financial liabilities at amortized cost | ||||||||||||
| Trade payables | ( | ) | ( | ) | ( | ) | ||||||
| Other payables and accrued liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Bank and other borrowings | ( | ) | ( | ) | ( | ) | ||||||
| Amount due to related parties | ( | ) | ( | ) | ( | ) | ||||||
| ( | ) | ( | ) | ( | ) | |||||||
Foreign Currency Risk
We are exposed to foreign currency risk with transactions and balances that are denominated in currencies other than our functional currency. The currencies giving rise to this risk are primarily Chinese Yuan Renminbi (“CNY”) and United States Dollar (“USD”). Foreign currency risk is monitored closely on an on-going basis to ensure that the net exposure is at an acceptable level.
Sensitivity analysis for foreign currency risk
We are exposed to foreign currency risk with transactions and balances that are denominated in currencies other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily Chinese Yuan Renminbi (“CNY”) and United States Dollar (“USD”). Foreign currency risk is monitored closely on an on-going basis to ensure that the net exposure is at an acceptable level.
Our exposure to foreign currency risk based on the carrying amounts of the financial instruments at the end of the reporting period is summarized below.
| CNY | USD | |||||||
| As of December 31, 2025 | RM | RM | ||||||
| Financial assets in foreign currencies | ||||||||
| Cash and bank balances | ||||||||
| Financial liabilities in foreign currencies | ||||||||
| Trade payables | ( | ) | ( | ) | ||||
| Other payables | ( | ) | ||||||
| ( | ) | ( | ) | |||||
| CNY | USD | |||||||
| As of December 31, 2024 | RM | RM | ||||||
| Financial assets in foreign currencies | ||||||||
| Cash and bank balances | ||||||||
| Financial liabilities in foreign currencies | ||||||||
| Trade payables | ( | ) | ||||||
F-40
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 20 | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont.) |
The following table details the sensitivity
analysis to a
| As of December 31, 2024 | As of December 31, 2025 | |||||||
| RM | RM | |||||||
| United States Dollar | ||||||||
| Chinese Yuan Renminbi | ( | ) | ( | ) | ||||
Interest Rate Risk
We are exposed to interest rate risk as we have bank loans which are interest bearing. The interest rates and terms of repayment of the loans are disclosed in Note 14 to the financial statements. We currently do not have an interest rate hedging policy.
Liquidity Risk
Liquidity risk arises mainly due to general funding and business activities. We practice prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.
The table below summarises the maturity profile of the Company’s financial liabilities as at the end of the reporting period and are based on undiscounted contractual payments:
| Carrying amount | Contractual cash flows | Within 1 year | More than 1 year and less than 2 years | More than 5 years | ||||||||||||||||
| RM | RM | RM | RM | RM | ||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||
| Trade payables | ||||||||||||||||||||
| Other payables and accrued liabilities | ||||||||||||||||||||
| Bank and other borrowings | ||||||||||||||||||||
| Lease liabilities | ||||||||||||||||||||
| Amount due to related parties | ||||||||||||||||||||
| Carrying amount | Contractual cash flows | Within 1 year | More than 1 year and less than 2 years | More than 5 years | ||||||||||||||||
| USD | USD | USD | USD | USD | ||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||
| Trade payables | ||||||||||||||||||||
| Other payables and accrued liabilities | ||||||||||||||||||||
| Bank and other borrowings | ||||||||||||||||||||
| Lease liabilities | ||||||||||||||||||||
| Amount due to related parties | ||||||||||||||||||||
F-41
FOUNDER GROUP LIMITED
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 20 | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont.) |
| Carrying amount | Contractual cash flows | Within 1 year | More than 1 year and less than 2 years | More than 5 years | ||||||||||||||||
| RM | RM | RM | RM | RM | ||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||
| Trade payables | ||||||||||||||||||||
| Other payables and accrued liabilities | ||||||||||||||||||||
| Bank and other borrowings | ||||||||||||||||||||
| Lease liabilities | ||||||||||||||||||||
| Amount due to related parties | ||||||||||||||||||||
Capital Risk Management
We manage our capital to ensure that entities within our Company will be able to maintain an optimal capital structure so as to support our businesses and maximize shareholders value. To achieve this objective, we may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.
We manage our capital based on debt-to-equity ratio that complies with debt covenants and regulatory, if any. The debt-to-equity ratio is calculated as net debt divided by total equity. We include within net debt, loans, and borrowings from financial institutions. Capital includes equity attributable to the owners of the parent and non-controlling interest.
| 21 | CONCENTRATION OF RISK |
Customer Concentration
For the year ended December 31, 2025,
the Company generated total revenue of RM
For the year ended December 31, 2024,
the Company generated total revenue of RM
For the year ended December 31, 2023,
the Company generated total revenue of RM
F-42
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 21 | CONCENTRATION OF RISK (cont.) |
| For the years ended December 31, | ||||||||||||||||||||||||||||
| 2023 | 2024 | 2025 | 2023 | 2024 | 2025 | |||||||||||||||||||||||
| Revenues | Percentage of revenues | |||||||||||||||||||||||||||
| RM | RM | RM | USD | % | % | % | ||||||||||||||||||||||
| Customer A | * | * | * | * | * | |||||||||||||||||||||||
| Customer B | * | * | * | |||||||||||||||||||||||||
| Customer C | * | * | * | * | * | |||||||||||||||||||||||
| Customer D | * | * | * | * | * | |||||||||||||||||||||||
| Customer E | * | * | * | * | ||||||||||||||||||||||||
| Customer F | * | * | * | * | ||||||||||||||||||||||||
| Customer G | * | * | * | * | ||||||||||||||||||||||||
| Others | ||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||
The following table sets forth a summary of customers who represent 10% or more of the Group’s total accounts receivable:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2024 | As of December 31, 2025 | |||||||||||||||||
| Receivables | Percentage of receivables | |||||||||||||||||||
| RM | RM | USD | % | % | ||||||||||||||||
| Customer A | ||||||||||||||||||||
| Customer B | ||||||||||||||||||||
| Others | ||||||||||||||||||||
| Total | ||||||||||||||||||||
| * |
| ^ |
F-43
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 21 | CONCENTRATION OF RISK (cont.) |
Vendor Concentration
For the year ended December 31, 2025,
the Company incurred cost of sale of RM
For the year ended December 31, 2024,
the Company incurred cost of sale of RM
For the year ended December 31, 2023,
the Company incurred cost of sale of RM
| For the years ended December 31 | ||||||||||||||||||||||||||||
| 2023 | 2024 | 2025 | 2023 | 2024 | 2025 | |||||||||||||||||||||||
| Cost of sale | Percentage of cost of sale | |||||||||||||||||||||||||||
| RM | RM | RM | USD | % | % | % | ||||||||||||||||||||||
| Vendor A | * | * | * | |||||||||||||||||||||||||
| Vendor B | * | * | ||||||||||||||||||||||||||
| Others | ||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||
The following table sets forth a summary of vendors who represent 10% or more of the Group’s total accounts payable:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2024 | As of December 31, 2025 | |||||||||||||||||
| Payables | Percentage of payables | |||||||||||||||||||
| RM | RM | USD | % | % | ||||||||||||||||
| Vendor A | ||||||||||||||||||||
| Vendor C | ||||||||||||||||||||
| Others | ||||||||||||||||||||
| Total | ||||||||||||||||||||
| * |
| ^ |
| 22 | SEGMENT REPORTING |
The Group prepared the following segment information based on the internal reports of the Group’s strategic business units which are regularly reviewed by the Group’s Chief Executive Officer (“CEO”) for the purpose of making decisions about resource allocation and performance assessment.
The group reporting is organized and
managed in
F-44
FOUNDER GROUP LIMITED
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 22 | SEGMENT REPORTING (cont.) |
The reportable segments are summarized as follows:
| i) | Large-scale solar — Large-scale solar projects are utility scale solar PV power plants with installed generating capacity of 1 MWac or more. Large-scale solar projects are ground mounted and floating and are designed to supply power to the power grid. For the majority of our large-scale solar projects, we usually act as the contractor to the project awarder, who is the main contractor for a solar project. |
| ii) | Commercial & Industrial — C&I projects are smaller scale solar projects where the solar PV systems are installed on rooftops and are designed to generate electricity for commercial and industrial properties for their own consumption, such as factories, warehouses and commercial stores. For C&I projects, we usually sign a service contract with the project owner and act as the main contractor. |
Revenue from contract services primarily involved project execution, including construction, installation and integration works, testing and commissioning of our solar projects. Revenue from sales of goods involved supply and selling of solar mounting structures and accessories. Consequently, both segments contribute to revenue from contract services and sales of goods, as reflected in our disclosed financial reports.
The Group did not generate any inter-segment revenues.
Segment profit
Segment performance is used to performance as Group’s CEO believes that such information is the most relevant in evaluating the results of certain segment relative to other entities that operate within these industries. Performance is evaluated based on operating profit and loss which is measured differently from operating profit or loss in the consolidated financial statements.
Segment assets
The total of segment asset is measured on all assets of a segment as included in the internal management reports that are reviewed by the Group’s CEO. Segment total assets are used to measure the return of assets of each segment.
Segment liabilities
The total of segment liability is measured on all liabilities of a segment as included in the internal management reports that are reviewed by the Group’s CEO. Segment total liabilities are used to measure the financial position of each segment.
F-45
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 22 | SEGMENT REPORTING (cont.) |
| As of December 31, 2023 | As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | |||||||||||||
| By Business Unit | RM | RM | RM | Convenience Translation USD | ||||||||||||
| Revenue | ||||||||||||||||
| Large Scale Solar Contract Services | ||||||||||||||||
| Commercial & Industrial Contract Services | ||||||||||||||||
| Large Scale Solar Sales of Goods | ||||||||||||||||
| Commercial & Industrial Sales of Goods | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of Sales | ||||||||||||||||
| Large Scale Solar Contract Services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Commercial & Industrial Contract Services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Large Scale Solar Sales of Goods | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Commercial & Industrial Sales of Goods | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Large Scale Solar Gross profit | ||||||||||||||||
| Commercial & Industrial Gross profit | ||||||||||||||||
| Total gross profit | ||||||||||||||||
| Selling and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Selling and administrative expenses to related parties | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income/(Loss) from operations before income tax | ( | ) | ( | ) | ( | ) | ||||||||||
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| Total assets | RM | RM | Convenience Translation USD | |||||||||
| Large Scale Solar segment | ||||||||||||
| Commercial & Industrial segment | ||||||||||||
| Total of reportable segments | ||||||||||||
| Corporate and other | ||||||||||||
| Consolidated total assets | ||||||||||||
| Total liabilities | RM | RM | Convenience Translation USD | |||||||||
| Large Scale Solar segment | ||||||||||||
| Commercial & Industrial segment | ||||||||||||
| Total of reportable segments | ||||||||||||
| Corporate and other | ||||||||||||
| Consolidated total liabilities | ||||||||||||
F-46
FOUNDER GROUP LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 23 | COMMITMENTS AND CONTINGENCIES |
Operating lease commitments
For the details on future minimum lease payments under the non-cancelable operating leases as of December 31, 2025, please refer to Note 5 to the Consolidated Financial Statements.
Capital commitments
Capital expenditure as at the end of the reporting period is as follows:
| As of December 31, 2024 | As of December 31, 2025 | As of December 31, 2025 | ||||||||||
| RM | RM | Convenience Translation USD | ||||||||||
| Not later than one year | ||||||||||||
| Capital expenditure: | ||||||||||||
| Plant and equipment | ||||||||||||
| 24 | SUBSEQUENT EVENTS |
The Group evaluated all events and transactions that occurred after December 31, 2025 up through the date of report, which is the date that these consolidated financial statements are available for distribution. Other than the event disclosed below:
| (a) | On January 22, 2026, Founder Assets (Thailand) Co Ltd, our subsidiary in Thailand, increases its share capital from THB | |
| (b) | On February 10, 2026, the authorised, issued, and outstanding shares of the Founder Group Limited were combined on a 100 for 1 ratio (the “Share Combination”) with the marketplace. As a result of the Share Combination, each |
F-47