As filed with the Securities
and Exchange Commission on September 6, 2024
Registration
No. 333-____
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
Form
F-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
NEWGENIVF
GROUP LIMITED
(Exact
name of registrant as specified in its charter)
British Virgin Islands | | 8090 | | Not Applicable |
(State or other jurisdiction of incorporation or organization) | | (Primary Standard Industrial Classification Code Number) | | (I.R.S. Employer Identification Number) |
Wing
Fung Alfred Siu
Chief
Executive Officer
1/F,
Pier 2, Central
Hong
Kong, 999077
Tel:
+1 (212) 537-4406
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
Cogency
Global Inc.
122 East 42nd Street,
18th Floor
New York, NY 10168
(212) 947-7200
(Name, address, including
zip code, and telephone number, including area code, of agent for service)
Copies to:
Darrin M. Ocasio, Esq.
Matthew Siracusa, Esq.
Sichenzia Ross Ference Carmel LLP
1185 Avenue of the America, 31st Fl.
New York, NY 10036
Telephone: +1-212-930-9700
Approximate date of commencement of proposed
sale to the public: As soon as practicable after the effective date hereof.
If any of the securities being registered on
this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.
☒
If this form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities
Act. ☐
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in
this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer
to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS |
SUBJECT TO COMPLETION |
DATED SEPTEMBER 6, 2024 |
5,912,281 Class A Ordinary Shares
NewGenIvf Group Limited
This prospectus relates to
the resale by the selling shareholders identified in this prospectus (“Selling Shareholders”) of up to 5,912,281 Class A Ordinary
Shares, no par value per share (“Ordinary Shares”).
The Selling Shareholders
are identified in the table commencing on page 60. No Ordinary Shares are being registered hereunder for sale by us. We will not receive
any proceeds from the sale of the Ordinary Shares by the Selling Shareholders. All net proceeds from the sale of the Ordinary Shares
covered by this prospectus will go to the Selling Shareholders (see “Use of Proceeds”). The Selling Shareholders are
offering their securities to further enhance liquidity in the public trading market for our equity securities in the United States. Unlike
an initial public offering, any sale by the Selling Shareholders of the Ordinary Shares is not being underwritten by any investment bank.
The Selling Shareholders may sell all or a portion of the Ordinary Shares from time to time in market transactions through any market
on which our Ordinary Shares are then traded, in negotiated transactions or otherwise, and at prices and on terms that will be determined
by the then prevailing market price or at negotiated prices directly or through a broker or brokers, who may act as agent or as principal
or by a combination of such methods of sale (see “Plan of Distribution”).
Our Ordinary Shares currently
trade on The Nasdaq Global Market under the symbol “NIVF.” The last reported closing price of our Ordinary Shares on August
30, 2024 was $0.86.
We are not a “controlled
company” as defined under the Listing Rules of The Nasdaq Stock Market LLC (“Nasdaq”), but we qualify as a “foreign
private issuer,” as defined in Rule 405 under the U.S. Securities Act of 1933, as amended, or the Securities Act, and are eligible
for reduced public company reporting requirements.
NewGenIvf Group Limited
(“NewGenIvf,” “Company,” “our,” “we,” or “us”) is a British Virgin Islands
holding company with our operations conducted through our subsidiaries in the Cayman Islands (our wholly-owned subsidiary, NewGenIvf
Limited) and in Asia (Hong Kong, Thailand, Kyrgyzstan, and the Kingdom of Cambodia). Under this holding company structure, investors
are purchasing equity interests in NewGenIvf, a British Virgin Islands holding company, and obtaining indirect ownership interests in
our Cayman Islands and Asian operating subsidiaries. Substantially all of NewGenIvf’s operations and assets are based in Thailand,
Cambodia and Kyrgyzstan. As a result, its businesses and operations are subject to the changing economic conditions prevailing from
time to time in such countries.
Investing in our Ordinary
Shares involves a high degree of risk, including the risk of losing your entire investment. See “Risk Factors” starting
on page 20 to read about the factors you should consider before buying the Ordinary Shares.
Neither the Securities
and Exchange Commission, or the SEC, nor any state or other foreign securities commission has approved nor disapproved these securities
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is
, 2024
TABLE OF CONTENTS
You should rely only on
the information contained in this prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred
you. Neither we nor any of the Selling Shareholders have authorized anyone to provide you with different information. Neither we nor
any of the Selling Shareholders are making an offer of these securities in any jurisdiction where the offer is not permitted. You should
not assume that the information in this prospectus or any applicable prospectus supplement is accurate as of any date other than the
date of the applicable document. Since the date of this prospectus, our business, financial condition, results of operations and prospects
may have changed.
For investors outside of
the United States: Neither we nor any of the Selling Shareholders have done anything that would permit this offering or possession or
distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are
required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.
In this prospectus, “we,”
“us,” “our” and the “Company” refer to NewGenIvf Group Limited and its wholly owned subsidiary, NewGenIvf
Limited, a Cayman Islands company.
Our reporting currency is
the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to “dollars”
or “$” are to U.S. dollars.
This prospectus includes
statistical, market and industry data and forecasts which we obtained from publicly available information and independent industry publications
and reports that we believe to be reliable sources. These publicly available industry publications and reports generally state that they
obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy or completeness of the
information. Although we believe that these sources are reliable, we have not independently verified the information contained in such
publications.
Our consolidated financial
statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or
U.S. GAAP.
The number of Ordinary Shares
currently issued and outstanding was 10,149,386 as of September 4, 2024. No new shares are being issued by the Company pursuant to this
offering.
ABOUT THIS PROSPECTUS
This prospectus describes
the general manner in which the Selling Shareholders identified in this prospectus may offer from time to time up to 5,912,281 Ordinary
Shares. If necessary, the specific manner in which the Ordinary Shares may be offered and sold will be described in a supplement to this
prospectus, which supplement may also add, update or change any of the information contained in this prospectus. To the extent there is
a conflict between the information contained in this prospectus and the prospectus supplement, you should rely on the information in the
prospectus supplement, provided that if any statement in one of these documents is inconsistent with a statement in another document having
a later date—for example, any prospectus supplement—the statement in the document having the later date modifies or supersedes
the earlier statement.
GLOSSARY OF DEFINED TERMS
In this prospectus, unless otherwise indicated
or the context otherwise requires, references to:
“ASCA” means
A SPAC I Acquisition Corp., a British Virgin Islands business company.
“A SPAC I
Mini Acquisition Corp.” means A SPAC I Mini Acquisition Corp., a British Virgin Islands business company.
“Business Combination”
means the transactions contemplated by the Merger Agreement, pursuant to which (i) ASCA reincorporated to the British Virgin Islands
by merging with and into the Company; and (ii) Merger Sub merged with and into Legacy NewGenIvf, resulting in Legacy NewGenIvf being
a wholly-owned subsidiary of the Company.
“BVI” means
British Virgin Islands.
“BVI Act”
means BVI Business Companies Act (As Revised).
“Class A Ordinary
Share” means Class A ordinary shares of the Company, no par value per share.
“Class B Ordinary
Share” means (x) the Company’s Class B ordinary shares with no par value per share, and (y) any shares into which such ordinary
shares shall have been changed or any shares resulting from a reclassification of such ordinary shares.
“Closing”
means the consummation of the Business Combination, which occurred on April 3, 2024.
“Company”
means NewGenIvf Group Limited, a British Virgin Islands business company, the surviving entity of the Business Combination.
“Legacy NewGenIvf”
means NewGenIvf Limited, a Cayman Islands exempted company, which became a wholly owned subsidiary of ASCA upon the Closing.
“Merger Agreement”
means the Merger Agreement entered into on February 15, 2023, and as amended on June 12, 2023 and December 6, 2023, between ASCA, A SPAC I
Mini Acquisition Corp., Merger Sub, Legacy NewGenIvf, and certain shareholders of Legacy NewGenIvf, pursuant to which the Reincorporation
Merger and Acquisition Merger were consummated.
“Merger Sub”
means A SPAC I Mini Sub Acquisition Corp., a Cayman Islands exempted company and former wholly-owned subsidiary of A SPAC I
Mini Acquisition Corp.
“Memorandum and Articles
of Association” means the Company’s Amended and Restated Memorandum and Articles of Association, as amended on April 3, 2024.
“NewGenIvf”
means NewGenIvf Group Limited, a British Virgin Islands business company, the surviving entity of the Business Combination, unless the
context so requires.
“Ordinary Shares”
means the Class A Ordinary Shares.
“Preferred Shares”
means preferred shares of the Company, no par value per share.
“Reincorporation
Merger” means the first step of the Business Combination which occurred pursuant to the Merger Agreement, in which ASCA reincorporated
to the British Virgin Islands by merging with and into A SPAC I Mini Acquisition Corp.
PROSPECTUS SUMMARY
This summary highlights
information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing
in our securities. Before you decide to invest in our securities, you should read the entire prospectus carefully, including the “Risk
Factors” section and the financial statements and related notes appearing at the end of this prospectus.
Unless the context otherwise
requires, all references in this Prospectus Summary to “NewGenIvf,” “we,” “our,” and “us”
refer to Legacy NewGenIvf and its subsidiaries as they existed prior to the Closing if described in relation to a date prior to April
3, 2024. Any references to “NewGenIvf,” “we,” “our,” and “us” with respect to the present
time, a future time, or a date after April 3, 2024 refers to NewGenIvf, a British Virgin Islands company, and its subsidiaries, whose
existence continued after the Closing.
Overview
We are an assisted reproductive
services (“ARS”) provider in Asia-Pacific. Since the opening of our first clinic in Thailand in 2014, we have established
ourself as a long-standing ARS provider in this region. Our strategic presence in Thailand, Cambodia, and Kyrgyzstan positions us to
take advantage of opportunities across Asia-Pacific. According to China Insights Consultancy (“CIC”), from 2014 to 2022,
there was a rising number of women in the key ARS-targeted age group (ages 15 to 49) in Asia Pacific and a growing trend towards later
maternal age. The number of married women of reproductive age in Asia Pacific has risen from 816.4 million in 2014 to 833.2 million
in 2022. Additionally, according to CIC, there was increasing social acceptance of ARS use in Asia Pacific countries such as China, India,
and Thailand during the same period. For example, the number of ARS users in China has risen from 136.8 thousand in 2017 to 184.9 thousand
in 2022 approximately and that in Japan has risen from 98.0 thousand in 2017 to 128.5 thousand in 2022.
According to CIC, the prevalence
of infertility in Asia-Pacific developing countries is substantial. For example, the infertility rate in Thailand, India and China was
about 15.4%, 13.8% and 17.8%, respectively, in 2022. In India, the infertility rate in 2020 was approximately 13.1%, representing an
annual growth of 2.6%. The infertility rate in China was around 17.6% in 2020, representing an annual growth of 0.6%. Infertility is
increasingly gaining society’s attention as individuals are more openly discussing their struggles. Despite the prevalence of infertility,
access to treatment is often limited in the Asia Pacific region. According to CIC, financial challenges, costs of treatment, and limited
availability or capacity of fertility medical care are some of the main challenges in the fertility marketplace in Asia-Pacific region.
Religious, social and cultural roadblocks can also prevent hopeful couples from realizing their dream to have children. We believe that
we can help address some of these key challenges of Asia-Pacific fertility industry.
History and Development of the Company
Prior to the Business Combination,
on April 29, 2021, A SPAC I Acquisition Corp. (“ASCA”), was incorporated as a British Virgin Islands business company,
specifically a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization,
reorganization or similar business combination with one or more target businesses.
The Business Combination
On February 15, 2023,
ASCA entered into the Merger Agreement (as amended on June 12, 2023 and December 6, 2023, the “Merger Agreement,” and the
transactions contemplated thereunder, the “Business Combination”) with A SPAC I Mini Acquisition Corp., Merger Sub,
NewGenIvf Limited, a Cayman Islands exempted company (“Legacy NewGenIvf”) and certain shareholders of Legacy NewGenIvf. Pursuant
to the Merger Agreement, the Business Combination was effected in two steps: (i) ASCA was reincorporated to the British Virgin Islands
by merging with and into A SPAC I Mini Acquisition Corp. (such transaction, the “Reincorporation Merger”); and (ii) Merger
Sub merged with and into Legacy NewGenIvf, resulting in Legacy NewGenIvf being a wholly-owned subsidiary of the Company (such second
step in isolation, the “Acquisition Merger”). The surviving entity of the Business Combination, together with its subsidiaries
is referred to in this prospectus as “NewGenIvf,” the “Company,” “we,” “our,” or “us,”
unless the context otherwise requires.
On June 12, 2023, the
parties to the Merger Agreement entered into the First Amendment to Merger Agreement (the “First Amendment”), pursuant to
which Legacy NewGenIvf agreed to provide non-interest bearing loans in an aggregate principal amount of up to $560,000 (the “Loan”)
to ASCA to fund any amount that would be required in order to further extend the period of time available for ASCA to consummate a business
combination and for ASCA’s working capital, payment of professional, administrative and operational fees and expenses, and other
purposes as mutually agreed by ASCA and Legacy NewGenIvf. Such loans were to become repayable upon the closing of the Acquisition Merger.
In addition, pursuant to the First Amendment, subject to receipt of at least $140,000 as part of the Loan from NewGenIvf, ASCA agreed
to waive its termination rights and the right to receive any break-up fee due to Legacy NewGenIvf’s failure to deliver audited
financial statements by no later than February 28, 2023.
On December 6, 2023, the
parties to the Merger Agreement entered into the Second Amendment to the Merger Agreement (the “Second Amendment”) which
amended and modified the Merger Agreement to, among other things, (i) reduce the size of NewGenIvf’s board of directors following
the consummation of the Business Combination to five (5) directors, two (2) of whom would be executive directors designated by NewGenIvf
and three (3) of whom will be designated by NewGenIvf to serve as independent directors in accordance with Nasdaq requirements, (ii)
provide for the conversion of NewGenIvf shares issued by NewGenIvf following the original date of the Merger Agreement into Class A Ordinary
Shares in connection with the Acquisition Merger, and (iii) remove the condition that ASCA have in excess of $5,000,000 in net tangible
assets immediately after the consummation of the Business Combination.
On April 3, 2024, the Business
Combination was consummated with the Company as the surviving entity.
NewGenIvf’s Business
With a focus on providing
fertility treatments to fulfil the dreams of building families, NewGenIvf mainly offers two services, namely: (i) in vitro fertilization
(“IVF”) treatment service, comprising traditional IVF and egg donation; and (ii) surrogacy and ancillary caring services.
Currently, we have three clinics: one clinic in Thailand, one clinic in Cambodia, and one clinic in Kyrgyzstan.
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IVF treatment service: For the years ended December 31,
2023 and 2022, we generated approximately 78.3% and 47.4%, of its revenue from IVF treatments services. We primarily provide our
clients with conventional IVF/intracytoplasmic sperm injection (“ICSI”) and embryo transfer services. As technology has
progressively advanced, we have been able to, through technologies and facilities provided by MicroSort technology, help fulfill
the family-balancing dreams of its clients and avoiding certain gender-related hereditary diseases. IVF treatment involves the performance
of a series of medical treatment and procedures that are not separately distinct and only brings benefits to clients when embryo
is successfully implanted, therefore revenue from IVF treatment is recognized at a point in time when it is completed in clinic.
The completion of this treatment is evidenced by a written IVF report indicating successful embryo implantation. |
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Surrogacy and ancillary caring services: We also generate revenue
from surrogacy services and related ancillary caring services in Kyrgyzstan. For the years ended December 31, 2023 and
2022, we generated approximately 21.7% and 52.6%, of our revenue from surrogacy and ancillary caring services. For surrogacy services,
NewGenIvf conducts implantation of embryos from biological parents in surrogate mothers. In addition, NewGenIvf provides a “success
guarantee” program for egg donation services in Cambodia and surrogacy services in Kyrgyzstan. Under this optional program,
patients pay additional fees of approximately 40% of the original price and can have repeated attempts of IVF cycles, egg donation
services and/or surrogacy services until the procedures are successful. The additional costs to NewGenIvf are generally limited and
amount to approximately 30% of the original costs because NewGenIvf’s clinics, together with the patients, can choose suitable
egg donors and surrogate mothers to limit the additional costs. During the pregnancy period, NewGenIvf provides ancillary caring
services including regular body check and provision of vitamins, supplements and medicines to surrogate mothers. Revenue from surrogacy
and ancillary caring services is recognized at a point in time when the surrogate mother gives birth. Surrogacy services provide
infertile couples with an alternative method of having children. |
For the years ended
December 31, 2023 and 2022, NewGenIvf’s revenue was US$5,136,153 and US$5,944,190, and its net income was US$108,418 and
US$135,847, respectively.
Market Opportunity
According to CIC, NewGenIvf’s
core market for fertility services is substantial and growing rapidly, driven by, among other things, societal and cultural shifts, such
as people starting families later in life and other health-related challenges which could impact couples’ and individuals’
ability to have children. In addition, NewGenIvf believes that continued overall de-stigmatization of infertility will help drive better
access to, and stronger demand for, fertility treatment services, thereby further enabling the expansion of NewGenIvf’s addressable
market. According to CIC, the market size of fertility treatments in Asia Pacific was increasing steadily and the potential size of the
Asia fertility market is expected to reach US$37.4 billion by 2030. NewGenIvf believes its market opportunity is substantial and
is continuing to grow as a result of the rising demand for fertility services, the lack of adequate offerings in the market and the increasing
awareness of the challenges of infertility.
Competitive Strengths
NewGenIvf believes that
the following competitive strengths have positioned it to meet growing opportunities in the fertility market across Asia-Pacific, and
have differentiated it from its competitors:
Broad-range ARS Provider Offering Comprehensive
Fertility Treatment Services
With almost a decade of
experience in the fertility market, NewGenIvf has built a reputation in the IVF industry in Asia-Pacific. NewGenIvf has reinforced its
long-standing position through expanding its service offerings and locations to address the evolving clients’ needs or requests.
NewGenIvf’s comprehensive
fertility treatment offerings in Thailand, Cambodia, and Kyrgyzstan, primarily including IVF, egg donation (in Cambodia) and surrogacy
services (in Kyrgyzstan), make it convenient for clients in Asia-Pacific market to have access to various fertility services but with
a relatively low cost, as compared with the US market. According to CIC, the average cost per IVF cycle in the US is around US$12,000
(excluding medication), which is 65% higher than that of Asia-Pacific market. Meanwhile, the average cost per IVF cycle by NewGenIvf
is around US$7,000 (excluding medication). Each of NewGenIvf’s clinics in Thailand, Cambodia, and Kyrgyzstan has its own specialty,
and together, NewGenIvf is able to provide more flexibility and options to its patients. For example, NewGenIvf’s Thailand clinic
focus on IVF and related ancillary services including HIV sperm washing, egg freezing, and chromosome screening. The clinic in Cambodia
specializes in providing both IVF services and egg donation services. NewGenIvf opened the clinic in Kyrgyzstan in 2019, which broadened
NewGenIvf’s services by being legally qualified/received approval letter from The Ministry of Health of Kyrgyzstan to offer surrogacy
services. As of December 31, 2023, NewGenIvf was the one of the few ARS providers in Kyrgyzstan and one of the few companies in Kyrgyzstan
that is licensed to offer surrogacy services in Kyrgyzstan.
NewGenIvf attributes its
track record of success to its experienced physicians and its ability to provide comprehensive ARS services, allowing it to meet patients’
increasing demand for advanced, high-end, and sophisticated ARS, a higher standard and a wider range of advanced services.
NewGenIvf has extensive
experience serving Asia-Pacific patients and a deep understanding of their general profiles. In particular, NewGenIvf has personnel speaking
multiple languages, including nurses, facilitators, and translators, who are familiar with the health condition and culture of Asia-Pacific
patients from different countries in the region. NewGenIvf believes that it is therefore well-positioned to benefit from market growth
driven by Asia-Pacific patients travelling to its clinics for treatment.
Attractive Market with Significant Demand
and Fast Growth
NewGenIvf operates in the
ARS market in Asia Pacific, positioning it to leverage on an attractive market with compelling underlying growth potential. According
to CIC, during the years ended December 31, 2021 and 2022, the ARS market in Asia Pacific has experienced growth underpinned
by long-term demographic and social trends. These trends include a rising demand for fertility services, the lack of adequate offerings
in the market and the increasing awareness of the challenges of infertility, according to CIC.
According to CIC, the Asia
Pacific ARS market is a large, multi-billion dollar industry growing at a strong pace of approximately 15% in 2022 as increased awareness
and acceptance of IVF and surrogacy services continue to drive demand. Additionally, according to CIC, the market is underserved as a
substantial percentage of patients in need of ARS treatments go untreated. The industry also remains constrained in capacity, thereby
creating challenges in providing access to ARS to the volume of patients in need. According to CIC, as of December 31, 2022, there
were more than 213 million infertile couples in Asia Pacific. While there have been substantial increases in the use of ARS, according
to CIC, only approximately 1.47 million ARS cycles, including IVF, and other fertility treatments, were performed in Asia Pacific
in 2022. This amounts to less than 1.1% of the infertile couples in Asia Pacific being treated and only 0.7% having a child though ARS
in 2022, indicating significant unmet demand for ARS.
Asia-Pacific fertility markets,
in particular India and China, present a vast opportunity for ARS providers in the region. China’s ARS market has been driven by
an increasing rate of infertility, the implementation of the Three-Child Policy in May 2021, a decreasing number of couples at childbearing
age and increasing affordability and awareness of ARS, according to CIC. China’s ARS market size in 2021 and 2022 was US$2,105 million
and US$2,069 million, respectively, and is expected to further grow to US$2.3 billion in 2023, according to CIC. India’s
ARS market size increased from US$1.2 billion in 2021 to US$1.5 billion in 2022, and is expected to grow further to US$1.6 billion
in 2023, according to CIC. NewGenIvf believes that its existing market presence and reputation in Thailand, Cambodia, and Kyrgyzstan
well positions it to capitalize on the fast-growing Asia-Pacific fertility market.
According to CIC, the significant
entry barriers in Asia-Pacific ARS industry are expected to continue to constrain supply in the industry. The industry is heavily regulated
and a significant number of stringent requirements must be satisfied in order to obtain relevant licenses to conduct IVF, egg donation
and surrogacy procedures in the relevant countries. NewGenIvf believes that such barriers to entry can help it maintain its market position
in Asia Pacific as the fertility market in the region continues to expand.
Built on years of experience,
NewGenIvf has established a strong reputation in its industry, which in turn attracted potential business partners to approach NewGenIvf
to negotiate cooperations and referrals. Over the years, NewGenIvf sends representatives to medical expos mostly held in the PRC to approach
potential business partners and establish new partnerships by entering into agency agreements with each agent. NewGenIvf has become a
significant partner with approximately 90 fertility service agents in China as well as in India. Normally, each agency agreement has
a maximum term of one year, which is renewable upon mutual agreement. Agents typically market and promote NewGenIvf’s services
by word-to-mouth referrals and other measures and NewGenIvf pays the agents commission at a range of 10% to 25% of the treatment fees
upon the completion of client’s treatment. Normally, agents provide potential clients’ contact information to the sales team
of NewGenIvf, who then approach potential clients and provide consultation on services. Overall, approximately 50% of NewGenIvf’s
patients are referrals from agents, among which approximately 80% are referrals from China and the remaining 20% from India, whereas
the remaining 50% of NewGenIvf’s patients are patients who contact NewGenIvf directly through its websites from social media promotions.
With its partnerships in various countries, NewGenIvf believes it is able to better benefit from the growing market opportunities.
Exclusively Licensed Technology for Family Planning and Access
to Mature Fertility Technologies
NewGenIvf believes that
its licenses and/or access to mature technologies contribute to its ability to identify and tailor ARS services to individual patient’s
needs. These technologies include:
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MicroSort Technology: NewGenIvf holds an exclusive license granted
by a division of the Genetics and IVF Institute, to use MicroSort technology in Thailand and Cambodia, which is a form of pre-conception
gender selection technology for humans. MicroSort technology aims to separate male sperm cells based on which gender chromosome they
contain, which results in separated semen samples that contain a higher percentage of sperm cells that carry the same gender chromosome.
The technology ultimately helps couples choose the gender of their future child by choosing semen samples that predominately contain
sperm with the X chromosome for a female or Y chromosome for a male. Traditionally and naturally, gender selection occurs after
conception, meaning after the eggs are fertilized. As a result, some fertilized eggs will go unused. However, with MicroSort technology,
NewGenIvf is able to increase the ratio of male or female embryos, based on the patient’s preference. Eggs are more likely
to be fertilized according to the preferences of the parents. Other improvements that MicroSort treatment could help achieve include
prevention of certain gender-related hereditary diseases. As of December 31, 2023, NewGenIvf was one of the only seven exclusive
license holders of MicroSort technology world-wide. |
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Preimplantation Genetic Screening (“PGS”): PGS is
used in parallel with an IVF treatment cycle. PGS is the practice of determining the presence of aneuploidy (either too many or too
few chromosomes) in a developing embryo. PGS improves success rates of in vitro fertilization by ensuring the transfer of euploid
embryos that have a higher chance of implantation and resulting in a live birth. PGS has improved clinical outcomes for NewGenIvf
by achieving a higher implantation rate of 70.9% and reducing miscarriage rates by 26.6%. |
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Next-Generation Sequencing (“NGS”): NGS is a high-throughput
technology for determining the sequence of deoxyribonucleic acid (“DNA”) or ribonucleic acid (“RNA”) to study
genetic variation associated with diseases or other biological phenomena. NGS determines the sequence of a sample all at once by
using parallel sequencing. Traditional Sanger sequencing determines the sequence of a sample one section at a time. Sequencing thousands
of gene fragments simultaneously with NGS reduces time and cost associated with sequencing and increases the coverage quality and
data output. |
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Preimplantation Genetic Diagnosis (“PGD”): Similar
to PGS, PGD is also used in parallel with an IVF treatment cycle. But PGD is a process more enhanced than PGS since it scans for
individual genes. PGD is the practice of evaluating embryos for specific genetic abnormalities, such as sickle cell disease or cystic
fibrosis, where carrier status has been documented in each of the parents. By using this technique, physicians are able to check
the genes or chromosomes for a specific genetic condition. PGD can decrease the risk of miscarriage and this technology can help
women better achieve a healthy pregnancy. Individuals who suspect or know they carry genes for serious medical conditions may opt
to screen for healthy embryos ahead of time. |
Well Established Brand with Reliable Reputation
The founders of NewGenIvf
entered the fertility market as agents in 2011 by introducing patients in need to a Thailand clinic for fertility treatments. The founders
of NewGenIvf started to operate their own clinic in Thailand in 2014 and subsequently added clinics in Cambodia and Kyrgyzstan. Since
then, NewGenIvf has attracted clients from countries throughout Asia-Pacific, including Mainland China, Hong Kong, India, Thailand,
Australia and Taiwan.
NewGenIvf benefits from
the favourable geographic locations of its clinics, especially its clinic in Thailand. Located in central Bangkok and situated in one
of the biggest shopping malls of the city, the clinic is located in close proximity to various transportation facilities and popular
tourist attractions, such as the Erawan Shrine. In this regard, NewGenIvf believes that its business has benefited from, and will continue
to benefit from, the convenience of its locations.
NewGenIvf has developed
a relatively replicable and scalable operating model that supports high productivity at its assisted reproductive medical facilities
in Asia. Under this model, NewGenIvf’s medical facilities have established standardized operating procedures to select the treatment
process according to each patient’s profile. NewGenIvf’s medical and operational personnel are organized into specialized
teams according to the different stages of the treatment process and different patient profiles. When patients are initially admitted
or would like to seek additional medical services later on, they are assigned to one of the optimal medical teams, which NewGenIvf believes
is better suited after taking into account the patient’s diagnosis and preferences. NewGenIvf believes that this model allows each
team to improve its efficiency and arrange suitable physicians for patients.
The physicians of NewGenIvf
have also developed and employed an operating model that seeks to increase the effectiveness of physicians by utilizing standardized
workflows and operating procedures with teams of supporting nurses and medical assistants. This helps to increase the number of IVF treatment
cycles that physicians can perform while providing treatment customized based on patient conditions.
With its established client
service history, accumulated experience as well as its continuous upgrades and development of treatment models, NewGenIvf believes that
it will be able to better monetize its brands through its business.
Experienced Management Team
The NewGenIvf management
team has considerable experience in the ARS market and the broader healthcare industry. A considerable number of NewGenIvf’s management
are physicians or laboratory technicians who possess extensive experience in the ARS industry and are experts in their respective fields.
NewGenIvf’s Chief Executive Officer, Mr. Alfred Siu, has more than 13 years of experience in the fertility service market.
Dr. Wiphawee Luangtangvarodom had over 8 years of experience as an obstetrician and gynecologist. NewGenIvf’s two lab
supervisors, Ms. Anussara Phinyong, and Ms. Araya Boonchaisitthipong, each had over eight years of experience in the embryologist
field. These individuals have extensive experience in managing assisted reproductive medical facilities. NewGenIvf is also led by other
members of the professional management team, who are intimately involved in the operational and financial management of NewGenIvf’s
Group. Leveraging their experience, NewGenIvf believes that it is well positioned to expand its network and aims to become a leader in
the Asia Pacific ARS market.
Strategies
NewGenIvf’s vision
is to provide tailored ARS solutions to fulfil patients’ dreams of becoming a parent. To realize this vision, NewGenIvf plans to
adopt the following strategies:
Offer Broad Fertility Services for Fertility
Tourists across Asia Pacific
NewGenIvf intends to provide
broad fertility services for fertility tourists seeking high quality, cost effective and comprehensive fertility solutions. According
to CIC, the demand for fertility tourism is driven by a variety of factors including the prevalence of infertility, the introduction
of the Three-Child policy in China, the improved understanding of assisted reproductive technology and increased affordability of ARS. To
address these needs, NewGenIvf plans to offer its customers a “hassle-free”, seamless and integrated ARS and hospitality
arrangement experience. To complement its fertility services, NewGenIvf intends to integrate its offerings with additional services for
traveling patients, most of whom are first-time fertility tourists, such as translation service, hotel arrangement and airport pickup
services. NewGenIvf plans to enhance its customers’ experience by entering into exclusive cooperation arrangements with local premium
hospitality providers.
Furthermore, NewGenIvf expects
the easing of COVID-19 travel restrictions to contribute to an increase in tourists seeking fertility services. According to CIC, the
COVID-19 pandemic led to a delay in many patients’ plans for fertility treatments, with travel restrictions and border closures
impacting their ability to access care. On May 5, 2023, the WHO Director-General Dr. Tedros Adhanom Ghebreyesus announced that
COVID-19 no longer constituted a public health emergency of international concern. The pent-up demand for these services is expected
to be released with the lifting of the travel restrictions, leading to a surge in patients seeking fertility treatment. NewGenIvf’s
believes that its strategy of offering a comprehensive approach to fertility treatments will help it capture a share of the growing market
for fertility tourism in Asia Pacific.
Continue to Invest in Laboratories and Facilities
NewGenIvf believes laboratories
and treatment facilities are critical to supporting its future research, development and clients experience. NewGenIvf currently operates
two laboratories that offer IVF services, one in Thailand and one in Cambodia, and plans to continue to scale up its existing laboratories.
NewGenIvf plans to continue to invest in upgrading its laboratories and facilities to complement its growth and expansion, which it believes
will help NewGenIvf maintain an edge over its competitors with regard to technology, operational efficiency, scalability, and client
experience.
NewGenIvf intends to develop
advanced facilities for its existing laboratories, which will be conducting research on ARS related basic science and experiments relating
to emerging technologies to improve ARS success rates and lower costs. NewGenIvf also plans to correlate its data on patient treatment
protocols to the embryo physiologic data and the pregnancy success rate-related data to identify better treatment protocols to increase
ARS success rates. NewGenIvf intends to continue to actively promote technological cooperation with tertiary institutions to discover
ways to improve its IVF success rates. Furthermore, NewGenIvf seeks to actively deploy the technology that it possesses to expand the
services it provides.
NewGenIvf has accumulated
experience in treating patients over 40 years old with premature ovarian failure and patients who have had recurrent ARS implementation
failure, by, for the example, injecting platelet rich plasma into the ovaries to stimulate and support growth of the follicles. NewGenIvf
is also implementing certain technological advancements relevant to the ARS industry, including microfluidics, automated sperm analysers,
time lapsed incubators, non-invasive preimplantation genetic testing (“PGT”) of cell-free DNA in spent media, automated systems
for oocyte/embryo vitrification to reduce reagent consumption and decrease labor intensity, mitochondria replacement therapy to reconstruct
oocytes by nuclear transfer of polar body genome from an MII oocyte into an enucleated donor MII cytoplasm, to increase the number of
oocytes available for the treatment of infertile women, preimplantation methylome screening. There are also breakthrough developments
in science including organ culture systems, induced pluripotent stem cells, embryonic stem cells, spermatogonial stem cells for creation
of functional gametes, but these techniques are not yet ready for human clinical trials.
NewGenIvf also intends to
develop clinically customised interior design concepts for its medical facilities, including improved service rooms, consultation rooms,
reception areas, nutrition food areas, and traditional Chinese medicine (such as acupuncture) facilities.
Increase Brand Awareness and Market Share
NewGenIvf intends to maintain
and strengthen its brand awareness and market share in Asia Pacific. In order to expand its reach and increase patient numbers, NewGenIvf
plans to collaborate with local hospitals, companies, premium hospitality providers and other key players in the ARS industry in Asia
Pacific. Additionally, NewGenIvf intends to increase brand awareness through social media promotions and marketing initiatives, and establishing
its business development team with the goal of attracting new patients and partners across Asia Pacific. Meanwhile, NewGenIvf intends
to provide innovative treatment services to attract more clients. For example, NewGenIvf plans to introduce IVF mental health services,
which allows clients who fail in IVF treatments to access online consultation for further treatment plans such as egg donation and surrogacy.
These new treatments services aim to enable NewGenIvf to attract potential clients. By adopting a comprehensive strategy to expand its
market share, NewGenIvf aims to strengthen its reputation as a long-standing ARS provider and capture additional market share of the
growingly ARS market in Asia-Pacific.
Expand Service Reach Through Acquisitions and Partnerships
Leveraging its reputation
and footprint in its current markets, NewGenIvf intends to expand its reach, services offering and client base through strategic acquisitions
and/or partnerships in Asia Pacific. Acquisitions of or by companies offering similar services could not only allow NewGenIvf to diversify
its client base, but also allow it to benefit from potential economies of scale and increasing efficiency through consolidation. NewGenIvf
could also leverage the acquired or acquiring company’s customer base, reputation and expertise to further improve its offerings
and operations. NewGenIvf intends to focus on ARS providers in Asia Pacific which possess all conventional licenses and locally recognized
brands. For the global market beyond Asia Pacific, NewGenIvf intends to expand its footprint through partnerships with other IVF clinics.
In addition, NewGenIvf plans
to explore expanding its client base by offering its fertility services as part of corporate benefit programs in Asia. NewGenIvf believes
that there is potential in Asia in offering fertility treatments as a benefit for employees, particularly in companies with a large number
of female employees of childbearing age. By partnering with corporate clients to provide fertility benefits, NewGenIvf can increase its
market reach, enhance its brand reputation, and drive client growth. NewGenIvf’s broad range of fertility services, including IVF
and egg freezing, can help corporate partners differentiate their employee benefits in the competitive employment landscape, which could
make them more attractive to potential employees. Additionally, by offering these services, companies can help address the growing concern
of delayed childbearing, which is becoming more common among women according to CIC. NewGenIvf plans to collaborate with potential
corporate clients to develop customized fertility benefit programs that cater to their specific needs, and to provide comprehensive support
and counselling throughout the process.
Meanwhile, NewGenIvf also
intends to attract more clients by establishing its “home country gynecologist partnership program”. Under the program, NewGenIvf
may, subject to its discretion and screening process, offer treatment services to clients with reduced time requirements to be spent
overseas. Depending on local laws, the potential clients may be able to complete their treatments with gynecologists NewGenIvf partners
with, in their home countries.
Business Model
With a focus on providing
fertility treatments to fulfil couples and individuals’ dreams of raising children, NewGenIvf offers mainly two services, namely:
(i) IVF treatment service, comprising traditional IVF and egg donation; and (ii) surrogacy and ancillary caring services. The
following table sets forth NewGenIvf’s revenue by service offerings and as a percentage of total revenue for the periods indicated:
| |
For the Year ended December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | | |
% | | |
US$ | | |
% | |
IVF Treatment Service | |
| 4,021,696 | | |
| 78.3 | | |
| 2,819,163 | | |
| 47.4 | |
Surrogacy and Ancillary Caring Services | |
| 1,114,457 | | |
| 21.7 | | |
| 3,125,027 | | |
| 52.6 | |
Total Revenue | |
| 5,136,153 | | |
| 100.0 | | |
| 5,944,190 | | |
| 100.0 | |
IVF Treatment Service
NewGenIvf primarily provides
its clients with conventional IVF/ICSI and embryo transfer services. NewGenIvf is also able to, through MicroSort technology, help fulfill
the family-balancing dreams of its clients and avoiding certain gender-related hereditary diseases.
IVF treatments that NewGenIvf
provides address tubal factor, ovulatory dysfunction, diminished ovarian reserve, endometriosis, uterine factor, male factor, unexplained
infertility and other causes. IVF bypasses the function of the fallopian tube by achieving fertilization within a laboratory environment.
Ovarian hyper-stimulation is common with IVF treatments to recruit numerous follicles to increase the chances for success. Follicles
are retrieved trans-vaginally using a vaginal probe and ultrasound guidance. Anaesthesia is frequently used due to the number of follicles
retrieved and the resulting discomfort experienced by the patient. The eggs are identified in the follicular fluid and combined with
sperm and culture medium in culture dishes, which are placed in an incubator with a temperature and gas environment designed to mimic
the condition of the fallopian tubes. Once the embryos develop, typically over a 3-to-5-day period, they are transferred to the uterine
cavity. According to CIC, the average clinical pregnancy success rates, using 5-day incubation, averaged approximately 64.6% (with no
PGT) for IVF, with live birth rate at approximately 28.7%.
As a long-standing IVF treatments
provider in Asia-Pacific, NewGenIvf had completed over 4,000 cycles of IVF treatments from 2014 to 2023. For the years ended December 31,
2023 and 2022, the revenue from NewGenIvf’s IVF treatments was US$4,021,696 and US$2,819,163, respectively, representing 78.3%
and 47.4% of its total revenue in the corresponding periods.
IVF Treatments Process
A typical IVF treatment
process mainly includes two stages, the pre-IVF treatment stage and the IVF treatment stage. During the IVF treatment process, NewGenIvf
also provides support services such as nutrition guidance and psychological counselling. The flow chart below shows the stages involved
in a typical IVF treatment process:
At the pre-IVF treatment
stage, clients attend an initial consultation, undergo pre-IVF tests, and undergo treatment for gynaecological and andrological diseases,
if needed. At the initial consultation, a physician reviews the clients’ detailed medical history to collect more information relating
to the potential cause of their infertility. The client then undergoes various pre-IVF tests, which may include, among other things,
blood pressure, hormone level, ultrasound, infectious disease screening, uterine evaluation and male fertility test. The physician will
then design treatment plans based on the client’s medical history and results of the tests. If the client is satisfied with treatment
plan and the test results are acceptable to the physician, the physician will prescribe medications and start stimulation treatment.
The first step of the cycle
is to boost egg production through injecting synthetic hormones. Over about one week of ovarian stimulation, clients are monitored on
a regular basis with blood test and transvaginal ultrasound. If follicles have reached at least 10 mm in size, an additional antagonist
drug will be added into the daily injection schedule. This is used to prevent ovulation before ovum pickup time. After another few days
of ovarian simulation, if follicle growth is consistent and majority of follicles are around 16 mm to 17 mm, the final injection of a
human chorionic gonadotropin will be administered. The trigger injection is the final step of the stimulation process and is for the
maturation of the eggs in the follicles before they are collected. The next major step is to retrieve the eggs with a minor surgical
procedure called Trans Vaginal Follicle Aspiration conducted under anaesthesia. At the same time the male partner collects the sperms
for fertilizing the eggs in the laboratory by a process known as intracytoplasmic sperm injection. The fertilized embryos are cultured
in the laboratory for two to six days. Embryos that grow well are biopsied and tested by PGT to detect potential genetic diseases.
The final step is to transfer
the embryos into the uterus using a catheter. Within eight days after the embryo transfer, a blood test can be conducted to detect
whether the implantation was successful.
MicroSort Technology
MicroSort technology is
a preconception process developed by the Genetics and IVF Institute, Inc. that aims to improve the chances that the baby to be conceived
will be of the desired gender and prevents certain gender-related hereditary diseases.
Semen samples usually contain
equal amounts of sperm carrying the Y chromosome (which will produce a boy), and sperm carrying the X chromosome (which will produce
a girl). During the MicroSort process, the sperm sample is washed to remove seminal liquid and nonmotile cells. After the washing, the
sample is stained with a special fluorescent material that attaches to the DNA contained in the sperm. The stained sperm cells are analyzed
one by one by a flow cytometer, in which cells pass through a laser to make the stain attach to the DNA fluoresce. The sperm containing
the X chromosome (which have more DNA and therefore more stain) will shine brighter than the sperm containing the Y chromosome.
The flow cytometer uses a special software to identify X and Y chromosome sperm based on their fluorescence signature. The
sperm carrying the chromosome that will produce the desired gender are separated from the rest of the sample -resulting in an enriched
sperm sample ready for use.
NewGenIvf holds an exclusive
license granted by a division of the Genetics and IVF Institute, MicroSort International, to use the MicroSort technology in Thailand
and Cambodia. MicroSort licenses for NewGenIvf’s operation in Thailand and Cambodia are each provided under a lease and service
agreement. In April 2019, First Fertility PGS entered into a Lease and Services Agreement with MicroSort International to use MicroSort
equipment in Thailand and in March 2019, Phnom Penh Center entered into a Lease and Services Agreement with MicroSort International to
use MicroSort equipment in Cambodia (together, the “Lease and Services Agreements”). Pursuant to the Lease and Services Agreements,
First Fertility PGS and Phnom Penh Center each has the exclusive right to utilize the MicroSort equipment and to market and sell MicroSort
sperm sorting services in Thailand and Cambodia, respectively. MicroSort International is responsible for the maintenance of MicroSort
equipment and technical and engineering support. The term of each Lease and Service Agreements is initially from 2019 to 2024, which
shall be automatically renewed for one year unless a written notice of at least 180 days prior to the intended termination date
is provided. The consideration under each of the Lease and Services Agreements is US$9,000 per month after six months from the effective
date of the agreements. MicroSort International was entitled to a down payment of US$15,000 per agreement and the aggregated amounts
received by it under the agreements was US$328,500. During the term of each lease and service agreement, MicroSort grants NewGenIvf the
exclusive right in that country to utilize the MicroSort equipment and market MicroSort services. The term of each lease and service
agreement is initially from 2019 to 2024, which shall be automatically renewed for one year unless a written notice at least 180 days
prior to the intended termination date is provided. The flow chart below shows the process involved in MicroSort:
Preimplantation Genetic Screening
PGS is used in parallel
with an IVF treatment cycle. PGS is the practice of determining the presence of aneuploidy (either too many or too few chromosomes) in
a developing embryo. PGS improves success rates of in vitro fertilization by ensuring the transfer of euploid embryos that have a higher
chance of implantation and resulting in a live birth. PGS has improved clinical outcomes for NewGenIvf by achieving a higher implantation
rate of 70.9% and reducing miscarriage rates by 26.6%.
Next-Generation Sequencing
NGS is a high-throughput
technology for determining the sequence of deoxyribonucleic acid DNA or RNA to study genetic variation associated with diseases or other
biological phenomena. NGS determines the sequence of a sample all at once by using parallel sequencing. Traditional Sanger sequencing
determines the sequence of a sample one section at a time. Sequencing thousands of gene fragments simultaneously with NGS reduces time
and cost associated with sequencing and increases the coverage quality and data output.
Preimplantation Genetic Diagnosis
Similar to PGS, PGD is also
used in parallel with an IVF treatment cycle. But PGD is a more enhanced process than PGS since it scans for individual genes. PGD is
the practice of evaluating embryos for specific genetic abnormalities, such as sickle cell disease or cystic fibrosis, where carrier
status has been documented in each of the parents. By using this technique, physicians are able to check the genes or chromosomes for
a specific genetic condition. PGD can decrease the risk of miscarriage and this technology can help women achieve a healthy pregnancy.
Individuals who suspect or know they carry genes for serious medical conditions may opt to screen for healthy embryos ahead of time.
Surrogacy and Ancillary Caring Services
NewGenIvf also generated
revenue from surrogacy services and related ancillary caring services in Kyrgyzstan. NewGenIvf conducts implantation of embryos from
biological parents in surrogate mothers. During the pregnancy period, NewGenIvf provides ancillary caring services including regular
body check and provision of vitamins, supplements and medicines to surrogate mothers. Revenue from surrogacy and ancillary caring services
is recognized when the surrogate mother gives birth. Surrogacy services provide infertile couples with an alternative method of having
children. In general, NewGenIvf provides certain discount to clients if they wish to pursue additional services such as egg donation
and surrogacy, after several cycles of IVF treatments failures due to medical reasons including, but not limited to, the poor egg quality
of aged female clients.
As compared to other countries,
Kyrgyzstan has the following features that allow NewGenIvf to operates its surrogacy services: (i) surrogacy is legal and regulated,
which means that there are less restrictions on either intended parents or surrogate mothers, and a parent-child relationship can be
requested before the child’s birth; and (ii) the costs of operation and surrogate mother is favourable, given the cost of
living in Kyrgyzstan is relatively low.
In addition to the regular
surrogacy services, NewGenIvf is also able to assist the clients with birth certificate applications and facilitate the application of
infants’ passports and visas as supplemental services.
For the years ended
December 31, 2023 and 2022, the revenue from NewGenIvf’s surrogacy and ancillary caring services was US$1,114,457 and US$3,125,027,
respectively, representing 21.7% and 52.6% of its total revenue in the corresponding periods.
The flow chart below shows
the stages involved in a typical surrogacy process:
In Kyrgyzstan, NewGenIvf
also provides ancillary fertility services when carrying out surrogacy services. These ancillary fertility services include: (i) maternity
caring service, and (ii) documentation service.
Network of Facilities
As of December 31, 2023,
NewGenIvf had one marketing and sales support office located in Hong Kong and three clinics located in Thailand, in Cambodia, and
in Kyrgyzstan, respectively. The integration of the medical facilities in Thailand help NewGenIvf provide a more seamless one-stop experience
to its clients. Set out below is an illustration of the locations of NewGenIvf’s clinics and marketing and sales office:
The following table sets
forth the approximate aggregate average gross floor area (“G.F.A.”) of each of NewGenIvf’s clinics that were
under lease and actively used for client service as of December 31, 2023:
| |
As of December 31, 2023 | |
| |
(Square Feet) | |
Thailand | |
| |
First Fertility PGS Center Co., Ltd. (“First Fertility PGS Center”) | |
| 14,750 | |
| |
| | |
Cambodia | |
| | |
First Fertility Phnom Penh Center (“Phnom Penh Center”) | |
| 18,567 | |
| |
| | |
Kyrgyzstan | |
| | |
First Fertility Bishkek Limited Liability Company (“First Fertility Bishkek”) | |
| 2,368 | |
| |
| | |
Aggregate G.F.A | |
| 35,685 | |
To increase the scale of
NewGenIvf’s operations, NewGenIvf expanded its Thailand fertility services by leasing a new property for its second clinic Erawan
Consultation Clinic in May 2023. Consisting of approximately 2,500 sq. ft., Erawan Consultation Clinic is expected to open in 2024.
Currently, IVF treatments
are performed in its Thailand and Cambodia clinics, egg donation services are provided in its Cambodia clinic, and surrogacy services
are provided in its Kyrgyzstan clinic. The following table summarises the services available at NewGenIvf’s clinics:
| |
IVF Treatments | |
Surrogacy Services |
Thailand | |
| |
|
First Fertility PGS Center | |
√ | |
× |
| |
| |
|
Cambodia | |
| |
|
Phnom Penh Center | |
√ | |
× |
| |
| |
|
Kyrgyzstan | |
| |
|
First Fertility Bishkek | |
× | |
√ |
The following table sets
forth a breakdown of revenue from services performed at NewGenIvf’s medical centers for the periods indicated:
| |
For the Year ended December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | | |
% | | |
US$ | | |
% | |
HK SAR | |
| 34,038 | | |
| 0.7 | | |
| — | | |
| — | |
Thailand | |
| 1,356,903 | | |
| 26.4 | | |
| 505,609 | | |
| 8.5 | |
Cambodia | |
| 621,619 | | |
| 12.1 | | |
| 377,608 | | |
| 6.4 | |
Kyrgyzstan | |
| 3,123,593 | | |
| 60.8 | | |
| 5,060,973 | | |
| 85.1 | |
Total Revenue | |
| 5,136,153 | | |
| 100.0 | | |
| 5,944,190 | | |
| 100.0 | |
Thailand Clinic
As of December 31, 2023,
NewGenIvf had one clinic in Thailand. At the clinic in Thailand, NewGenIvf offers its clients customized fertility treatment solutions
including IVF/ICSI, embryo culture, hormonal blood tests, infectious diseases tests, chromosome screening by PGT, hysteroscopy, sperm
analysis, sorting, washing and freezing, and egg freezing. Its medical and operational personnel are organized into specialized teams
according to the different stages of the IVF treatment process and different patient profiles. When clients are admitted, they are assigned
to a team which NewGenIvf believes is better suited the clients after taking into account the clients’ diagnosis and preferences.
Furthermore, NewGenIvf also provides related value-added services such as nutrition guidance, psychological counselling, acupuncture,
and translation interpreters to supplement the IVF treatment. NewGenIvf prides itself on providing quality and customized treatment to
its clients on a day-to-day basis.
As of December 31, 2023,
the clinic in Thailand had six nurses, 8 full time lab physicians and embryologists, 14 administrative staff, totaling 28 staff members.
Cambodia Clinic
NewGenIvf has one clinic,
Phnom Penh Center, in Cambodia. Phnom Penh Center is staffed with one Cambodian physician, three embryologists, five nurses and twelve
other staff, and offers similar IVF treatments as in Thailand and egg donation services. Phnom Penh Center operates under a license issued
by Cambodia MOH for the Cambodian physician, who has entered into an agreement with Phnom Penh Center for the exclusive use of such license.
After eight years of
development since its opening in 2015, Phnom Penh Center has become one of the long-standing ARS providers in Cambodia. According to
CIC, it was the first to use conventional IVF technology which led to a successful birth in 2016 in Cambodia. Since its establishment,
Phnom Penh Center achieved more than 1,600 IVF treatment cycles as of December 31, 2023. As of December 31, 2023, Phnom Penh Center’s
IVF philosophy concentrates on three key points in the treatment process: the mother’s wellbeing, the technology used to assist
mothers deliver a strong and healthy baby and the medical science used to ensure every chance of success for women in various age spectrums.
Clinic in Kyrgyzstan
NewGenIvf established First
Fertility Bishkek in October 2019 in Kyrgyzstan for its surrogacy services, as Kyrgyzstan has supply of surrogate candidates at
a relatively low cost and a more friendly legal environment for surrogacy services. In 2020, First Fertility Bishkek obtained the license
to provide ARS and surrogacy services, becoming one of the few facilities licensed to offer ARS and one of the facilities licensed to
offer surrogacy services in Kyrgyzstan as of December 31, 2023, according to CIC. In addition, NewGenIvf also provide related
ancillary fertility services when carrying out surrogacy services. These ancillary fertility services include: (i) maternity caring
service, and (ii) documentation service.
Physicians at First Fertility
Bishkek have expertise in sourcing surrogate mothers, techniques of embryo transfers, prenatal care, baby delivery, and postnatal care.
First Fertility Bishkek also collaborates closely with Phnom Penh Center in arranging shipment of frozen embryos. NewGenIvf hires local
physicians and local staff. NewGenIvf also provides training for newly admitted Kyrgyzstan physicians and embryologists in Thailand.
Some personnel who had relevant experience in Kyrgyzstan had also been sent from Cambodia to Kyrgyzstan to help manage such operations
from time to time.
As of December 31, 2023,
First Fertility Bishkek had one full-time physician, one embryologist, two nurses, and ten other staff.
Professionals
Licensed Physicians
As of December 31, 2023,
NewGenIvf contracted with five licensed physicians, among which one was based in Cambodia and the other four were based in Thailand.
Most of NewGenIvf’s physicians had over 10 years of experience or above. The following table summarises the number and types
of such licensed physicians as of December 31, 2023.
Country |
|
Licensed physician |
|
Licenses and
Approvals |
|
Effective Period |
|
Issuing
Authority |
Cambodia |
|
Mr. Keut Serey |
|
Decision on permission for beauty treatment operation |
|
December 14, 2022 – December 14, 2026 |
|
The Ministry of Health of Cambodia |
Thailand |
|
Dr Patsama Vichinsartvichai |
|
Medical Facility Operating License number 288006 |
|
August 12, 2022 – December 31, 2023 |
|
The Ministry of Health of Thailand |
|
|
|
|
Number 30920 Medical Practitioner License |
|
April 1, 2004 – Indefinite |
|
The Ministry of Health of Thailand |
|
|
|
|
Number 26443/2556 Reproductive Medicine Diploma |
|
July 1, 2013 – Indefinite |
|
Medical Council of Thailand |
|
|
|
|
Certificate number obscured OB-Gyn License |
|
October 13, 2010 – Indefinite |
|
Medical Council of Thailand |
Thailand |
|
Dr Keatthisak Boonsimma |
|
Number 31801 Medical Practitioner License |
|
April 1, 2005 – Indefinite |
|
Royal Thai College of Obstetricians and Gynaecologists of Thailand |
|
|
|
|
Number 22624/2554 OB-Gyn License |
|
July 1, 2014 – Indefinite |
|
Medical Council of Thailand |
|
|
|
|
Number 40962/2563 Reproductive Medicine Diploma |
|
July 1, 2020 – Indefinite |
|
Medical Council of Thailand |
Country |
|
Licensed physician |
|
Licenses and
Approvals |
|
Effective Period |
|
Issuing
Authority |
Thailand |
|
Dr Seree Teerapong |
|
Number 15231/2564 Reproductive Medicine License |
|
July 1, 2021 – Indefinite |
|
Medical Council of Thailand |
|
|
|
|
Number 4576/2533 OB-Gyn License |
|
July 12, 1990 – Indefinite |
|
Medical Council of Thailand |
|
|
|
|
Number 11544 (replacement) Medical Practitioner License |
|
April 12, 1984 – Indefinite |
|
Medical Council of Thailand |
Thailand |
|
Dr Wiphawee Luangtangvarodom |
|
Number 38347/2562 OB-Gyn License |
|
August 1, 2019 – Indefinite |
|
Medical Council of Thailand |
|
|
|
|
Number 43217/2564 Reproductive Medicine License |
|
July 1, 2021 – Indefinite |
|
Medical Council of Thailand |
|
|
|
|
Number 48510 Medical Practitioner License |
|
April 1, 2014 – Indefinite |
|
Medical Council of Thailand |
Agreements with Physicians
NewGenIvf enters into independent
physician agreements or employment contracts with its physicians. The terms and conditions and the format of the agreements NewGenIvf
enters into with each of its physicians vary, depending on the physician’s seniority and practise nature.
Customers
For the years ended
December 31, 2023 and 2022, the majority of NewGenIvf’s clients were from China (including mainland China and Hong Kong). The
number of Thai and Cambodian local patients generally increased in 2022 and 2023 compared with earlier years due to the impact of COVID-19
on international travel. NewGenIvf enters into a service agreement with each of its customers that outline, among other things, the scope
of services, service fees, payment terms and rights, responsibilities and obligations of each party. Customers are not entitled to enjoy
the relevant services until outstanding amounts have been settled pursuant to the relevant contract. Sales to individual consumers did
not vary significantly and none of the customers contribute more than 10% of NewGenIvf’s revenue for the years ended December 31,
2023 and 2022.
The following table sets
forth a breakdown of NewGenIvf’s total customers by major countries (determined by the passports they provided to NewGenIvf for
registration) and as a percentage of the total customers for the periods indicated(1):
| |
For the Year ended December 31, | |
| |
2023 | | |
2022 | |
| |
First Fertility PGS Center | | |
Phnom Penh Center | | |
Total | | |
% | | |
First Fertility PGS Center | | |
Phnom Penh Center | | |
Total | | |
% | |
China(2) | |
| 34 | | |
| 87 | | |
| 121 | | |
| 42 | | |
| 66 | | |
| 117 | | |
| 183 | | |
| 72 | |
India | |
| 16 | | |
| — | | |
| 16 | | |
| 6 | | |
| 16 | | |
| — | | |
| 16 | | |
| 6 | |
Thailand | |
| 103 | | |
| — | | |
| 103 | | |
| 36 | | |
| 25 | | |
| 3 | | |
| 28 | | |
| 11 | |
Cambodia | |
| — | | |
| 7 | | |
| 7 | | |
| 2 | | |
| — | | |
| 22 | | |
| 22 | | |
| 9 | |
Others(3) | |
| 31 | | |
| 9 | | |
| 40 | | |
| 14 | | |
| — | | |
| 5 | | |
| 5 | | |
| 2 | |
Total | |
| 184 | | |
| 103 | | |
| 287 | | |
| 100 | | |
| 107 | | |
| 147 | | |
| 254 | | |
| 100 | |
(1) |
Customers of First Fertility Bishkek are the same customers of Phnom Penh Center. |
(2) |
Include customers from mainland China and Hong Kong. |
(3) |
Include customers from Philippines, Singapore, USA, Korea, Nigeria and UK. |
In addition to significant
customers using NewGenIvf’s IVF treatment services and surrogacy and ancillary caring services, NewGenIvf also has customers who
only use its relatively insignificant services, such as check-ups services, blood test services and other minor services (the latter category
of customers are referred to as “consultation customers”).
Sales and Marketing
For the years ended
December 31, 2023 and 2022, NewGenIvf promoted brand awareness through its sales teams and, in many cases, through cooperating with
third-party agencies and partners.
NewGenIvf’s sales teams
have broad experience in fertility services and are responsible for identifying potential clients and managing the overall sales process.
NewGenIvf’s sales team primarily relies on social media marketing, word-of-mouth referrals, recognition of its brand, printed advertisements
and marketing events. NewGenIvf spends marketing expenses on placing advertisements through popular social media platforms, maintaining
the official website of NewGenIvf and sending information through its official accounts on social media platforms.
Supply and Procurement
NewGenIvf’s procurement
is mainly for medications, laboratory media and reagents, laboratory consumables, and blood test reagents. As of December 31, 2023
and 2022, one and four suppliers individually contributed more than 10% of the Group’s trade payable, in aggregate accounting for
30.6% and 69.8% of the Group’s trade payables, respectively. For the year ended December 31, 2023 and 2022, nil and two vendors
contributed more than 10% of total purchases of the Group, in aggregate accounting for nil and 55.3% of the Group’s total purchases,
respectively. NewGenIvf’s procurement team is experienced in selecting cost-effective supplies as well as selecting reliable suppliers.
NewGenIvf’s major suppliers are pharmaceutical companies.
Competition
NewGenIvf believes that it
is a long-standing provider of ARS in Asia Pacific that competes primarily based on the following competitive factors:
| ● | the value and comprehensiveness
of the solutions; |
| ● | treatment that is effective
and achieves desired outcomes; |
| ● | clients’ experience, including
dedicated patient education, clinical guidance and emotional support; and |
| ● | access to a network of high-quality
fertility specialists. |
NewGenIvf competes primarily
with other regional fertility service providers. While NewGenIvf does not believe any single competitor offers a comparably robust and
integrated fertility solution package as NewGenIvf in the regions that it operates, NewGenIvf’s competitors may compete in a variety
of ways, including by providing better services, having established local connections, fulfilling evolving client needs, as well as conducting
brand promotions and other marketing activities.
As NewGenIvf may introduce
new ancillary services and other companies may introduce similar fertility services as NewGenIvf’s, NewGenIvf may become subject
to additional competition.
Facilities
As of December 31, 2023,
in addition to its clinics, NewGenIvf leased one property in Hong Kong with an aggregate square footage of approximately 8,000 for
its administration support offices. NewGenIvf also operates its medical facilities as described above in “— Network of
Facilities” above. NewGenIvf believes that its existing facilities are suitable and adequate to meet its current needs.
C. Organizational Structure
The following is a list of
our principal subsidiaries and consolidated affiliated entities as of the date of this prospectus:
Name |
|
Place of Formation |
|
Relationship |
|
|
|
|
|
Legacy NewGenIvf |
|
Cayman Islands |
|
Wholly-owned subsidiary |
|
|
|
|
|
FFPGS (HK) Ltd |
|
Hong Kong |
|
Indirect subsidiary, wholly owned by Legacy NewGenIvf |
|
|
|
|
|
First Fertility Bishkek LLC |
|
Kyrgyzstan |
|
Indirect subsidiary, wholly owned by Legacy NewGenIvf |
|
|
|
|
|
First Fertility PGS Center Limited |
|
Thailand |
|
Indirect subsidiary, wholly owned by Well Image Limited HK |
|
|
|
|
|
First Fertility Phnom Penh Ltd |
|
Kingdom of Cambodia |
|
Indirect subsidiary, wholly owned by Legacy NewGenIvf |
|
|
|
|
|
Med Holdings Limited |
|
Thailand |
|
Indirect subsidiary, wholly owned by Well Image Limited HK |
|
|
|
|
|
Well Image Limited HK |
|
Hong Kong |
|
Indirect subsidiary, wholly owned by Legacy NewGenIvf |
D. Property, Plants and Equipment
The Company leases the premises
for its principal executive office located at 36/39-36/40, 13th Floor, PS Tower, Sukhumvit 21 Road (Asoke) Khlong Toei Nuea Sub-district,
Watthana District, Bangkok 10110, Thailand. This property contains approximately 14,750 square feet. The Company leases one property in
Hong Kong with an aggregate square footage of approximately 8,000 for its administration support offices.
The Company also leases several
premises to operate its clinics in various countries. In Kyrgyzstan, the Company operates the First Fertility Bishkek Limited Liability
Company, which premises have an aggregate area of 2,368 square feet. In Cambodia, the Company operates the First Fertility Phnom Penh
Center, which premises have an aggregate area of 18,567 square feet. In Thailand, the Company operates a clinic named First Fertility
PGS Center Co., Ltd., which premises have an aggregate area of 14,750 square feet.
The Company also leases premises
located in Thailand for its anticipated Erawan Consultation Clinic clinic, with an aggregate area of approximately 2,500 square feet.
This property is used as the Company’s second clinic in Thailand, which is expected to open in 2024.
Implications of being a “Foreign Private
Issuer”
We are subject to the information
reporting requirements of the Exchange Act that are applicable to “foreign private issuers,” and under those requirements,
we file reports with the SEC. As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic
issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less
frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports, proxy statements
that comply with the requirements applicable to U.S. domestic reporting companies or individual executive compensation information that
is as detailed as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file
our annual report with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies.
Our officers, directors and principal shareholders are exempt from the requirements to report transactions in our equity securities and
from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we are not
subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer,
we are permitted to follow certain home country corporate governance practices instead of those otherwise required under the rules of
Nasdaq for domestic U.S. issuers and are not required to be compliant with all Nasdaq rules as of the date of our initial listing on Nasdaq
as would domestic U.S. issuers. These exemptions and leniencies will reduce the frequency and scope of information and protections available
to you in comparison to those applicable to a U.S. domestic reporting company. We intend to take advantage of the exemptions available
to us as a foreign private issuer.
Summary of Risk Factors
Investing in our Ordinary
Shares involves significant risks. You should carefully consider all of the information in this prospectus before making an investment
in our shares. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed
more fully in the section titled “Risk Factors” and in Part I, Item 3, D. Risk Factors in our most recent Annual Report
on Form 20-F.
Risks Related to NewGenIvf’s Business
and Industry
|
● |
We may not be able to continue operating as a going concern. |
|
|
|
|
● |
The fertility market in which NewGenIvf participates is competitive, and if NewGenIvf does not continue to compete effectively, its results of operations could be materially and adversely affected. |
|
|
|
|
● |
NewGenIvf has a limited operating history with its current platform of solutions, which makes it difficult to predict its future prospects, financial performance and results of operations. |
|
|
|
|
● |
NewGenIvf’s marketing efforts depend significantly on its ability to receive positive references from its existing clients. |
|
|
|
|
● |
If NewGenIvf is unable to attract new clients, its business, financial condition and results of operations would be adversely affected. |
|
|
|
|
● |
NewGenIvf’s business depends on its ability to maintain its existing client demographics. Any failure to do so would harm its business, financial condition and results of operations. |
|
● |
If NewGenIvf fails to offer high-quality support, its reputation could suffer. |
|
|
|
|
● |
NewGenIvf’s failure to effectively develop and expand its marketing and sales capabilities could harm its ability to increase its client base and achieve broader market acceptance of solutions NewGenIvf provides. |
|
|
|
|
● |
NewGenIvf may experience net losses and may not sustain profitability in the future. |
|
|
|
|
● |
NewGenIvf’s future revenue may not grow at the rates it historically has, or at all. |
|
|
|
|
● |
NewGenIvf’s quarterly and annual results may fluctuate significantly and may not fully reflect the underlying performance of NewGenIvf’s business. |
|
|
|
|
● |
If the estimates and assumptions NewGenIvf uses to determine the size of the target markets for its services are inaccurate, its future growth rate may be impacted and its business would be harmed. |
|
|
|
|
● |
NewGenIvf may not be able to successfully manage its growth, and if NewGenIvf is not able to grow efficiently, its business, financial condition and results of operations could be harmed. |
|
|
|
|
● |
If NewGenIvf’s new solutions and services are not adopted by its clients, or if it fails to innovate and develop new offerings that are adopted by its clients, its revenue and results of operations may be adversely affected. |
|
|
|
|
● |
If NewGenIvf fails to adapt and respond effectively to the changing medical landscape, changing regulations, changing client needs, requirements or preferences, its offerings may become less competitive. |
|
|
|
|
● |
If NewGenIvf fails to maintain and enhance its brand, its ability to expand its client base will be impaired and its business, financial condition and results of operations may suffer. |
|
|
|
|
● |
If NewGenIvf fails to retain and motivate members of its management team or other key employees, or fails to attract additional qualified personnel to support its operations, its business and future growth prospects could be harmed. |
|
|
|
|
● |
To successfully market and sell its services and products in Asia-Pacific markets, NewGenIvf must address many international business risks with which NewGenIvf has limited experience. |
|
|
|
|
● |
Ethical, legal and social concerns related to the use of assisted reproductive technology could reduce demand for the fertility services provided by the medical facilities in NewGenIvf’s network, and thus may adversely affect the business, financial conditions and results of operations of the medical facilities in its network. |
|
|
|
|
● |
NewGenIvf is reliant on revenue from international clients. |
|
|
|
|
● |
Fluctuations in exchange rates could have a material and adverse effect on NewGenIvf’s results of operations and the value of your investment. |
|
|
|
|
● |
Governmental control of currency conversion may limit NewGenIvf’s ability to utilize NewGenIvf’s net revenue effectively and affect the value of your investment. |
|
|
|
|
● |
Substantially all of NewGenIvf’s assets and operations are located in Thailand, Cambodia and Kyrgyzstan and they are subject to economic, legal and regulatory uncertainties in such countries. |
|
|
|
|
● |
Failure to comply with the terms of future financing arrangements could result in default, which could have an adverse effect on NewGenIvf’s cash flow and liquidity. |
|
|
|
|
● |
NewGenIvf requires a significant amount of capital to fund its operations and growth. If NewGenIvf cannot obtain sufficient capital on acceptable terms, its business, financial condition, and prospects may be materially and adversely affected. |
|
|
|
|
● |
The defects in certain leased property interests and failure to register certain lease agreements may materially and adversely affect NewGenIvf’s business, financial condition, results of operations, and prospects. |
|
|
|
|
● |
NewGenIvf currently has no insurance coverage for its operations. |
|
|
|
|
● |
NewGenIvf may not be successful in adapting to technological developments, which may affect its business and results of operations. |
|
|
|
|
● |
If its computer systems, or those of its
providers, specialty pharmacies or other downstream vendors lag, fail or suffer security breaches, NewGenIvf may incur a material disruption
of its services, which could materially impact its business and the results of operations. |
Risks Related to NewGenIvf’s Relationships with Third Parties
|
● |
NewGenIvf’s business depends on its ability to maintain its network of high-quality fertility specialists and other healthcare providers. If NewGenIvf is unable to do so, its future growth would be limited and its business, financial condition and results of operations would be harmed. |
|
|
|
|
● |
The medical facilities and professionals in NewGenIvf’s network could become the subject of litigation, allegations and other claims, and NewGenIvf is not insured against these liabilities. |
|
|
|
|
● |
The assisted reproductive medical facilities in NewGenIvf’s network have limited control over the quality of the pharmaceuticals, medical equipment, medical consumables and other supplies used in its operations, and cannot guarantee that the products in use are not defective or counterfeit. NewGenIvf also has no control over independent sub-contractors and cannot guarantee the services thereof. |
|
|
|
|
● |
If NewGenIvf loses its relationship with one or more key pharmaceutical manufacturers, its business and results of operations could be adversely affected. |
|
|
|
|
● |
NewGenIvf has engaged in transactions with related parties, and such transactions present potential conflicts of interest that could have an adverse effect on its business and results of operations. |
|
|
|
|
● |
NewGenIvf may be subject to claims and allegations relating to intellectual property and other causes. |
|
|
|
|
● |
Certain data and information in this prospectus
relied on by NewGenIvf were obtained from third-party data and polls. These metrics were not independently verified by NewGenIvf and may
not be accurate.
|
Risks Related to Government Regulation
|
● |
NewGenIvf operates in a highly regulated industry and must comply with a significant number of complex and evolving requirements. Any lack of requisite approvals, licenses, or permits applicable to NewGenIvf’s business may have a material and adverse impact on NewGenIvf’s business, financial condition, and results of operations. |
|
|
|
|
● |
Changes in NewGenIvf’s effective tax rate or tax liability may have an adverse effect on its results of operations. |
|
|
|
|
● |
NewGenIvf’s reported financial results may be adversely affected by changes in accounting principles generally accepted in relevant jurisdictions. |
|
|
|
|
● |
NewGenIvf’s reported financial results may be adversely affected by changes in accounting principles generally accepted in relevant jurisdictions. |
|
|
|
|
● |
If NewGenIvf’s estimates or judgments relating to its critical accounting policies prove to be incorrect, its results of operations could be adversely affected. |
|
|
|
|
● |
NewGenIvf is subject to anti-corruption,
anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject it to criminal or civil liability
and harm its business, financial condition and results of operations. |
THE OFFERING
This prospectus relates to
the resale by the Selling Shareholders identified in this prospectus of up to 5,912,281 Ordinary Shares. All of the Ordinary Shares,
when sold, will be sold by these Selling Shareholders. The Selling Shareholders may sell their Ordinary Shares from time to time at prevailing
market prices. We will not receive any proceeds from the sale of the Ordinary Shares by the Selling Shareholders.
Ordinary Shares currently issued and outstanding |
|
10,149,386 Class A Ordinary Shares |
|
|
|
Ordinary Shares offered by the Selling Shareholders |
|
Up to 5,912,281 Class A Ordinary Shares |
|
|
|
Use of proceeds |
|
We will not receive any proceeds from the sale of the Ordinary Shares
by the Selling Shareholders. All net proceeds from the sale of the Ordinary Shares covered by this prospectus will go to the Selling
Shareholders (see “Use of Proceeds”). |
|
|
|
Risk factors |
|
You should read the “Risk Factors” section starting
on page 20 of this prospectus for a discussion of factors to consider carefully before deciding to invest in our securities. |
|
|
|
Nasdaq symbol |
|
“NIVF” (Class A Ordinary Shares); “NIVFW” (Warrants to purchase Class A
Ordinary Shares). |
The
number of Class A Ordinary Shares issued and outstanding is 10,149,386 as of September 4,
2024. No new Class A Ordinary Shares will be issued by us under this offering.
RISK FACTORS
Investing in our Class A Ordinary
Shares involves a high degree of risk. You should carefully consider the risks described in Part I, Item 3,
D. Risk Factors in our most recent Annual Report on Form 20-F, together with the other information set forth in this prospectus, and in
the other documents that we include or incorporate by reference into this prospectus, as updated by our Current Reports on Form 6-K and
other filings we make with the SEC, the risk factors described under the caption “Risk Factors” in any applicable prospectus
supplement and any risk factors set forth in our other filings with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, before making a decision about investing in our Ordinary Shares. The risks and
uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our operations. If any risks actually occur, our business, financial condition and results of
operations may be materially and adversely affected. In such an event, the trading price of our Ordinary Shares could decline and you
could lose part or all of your investment.
Additionally, we are also
subject to the following risk factors.
Risks Related to NewGenIvf’s Business
and Industry
We may not be able to continue operating
as a going concern.
As of December 31, 2023,
the Company had bank balance of $54,104 and may have challenge to settle its obligations when payment become due. The Company is always
closely monitoring the market opportunities and is currently in the process of exercising various fundraising projects with various potential
investors to improve the Company's cash flow position for its operation and short-term payables.
One fundraising project was
completed on April 3, 2024. As of April 4, 2024, the Company settled $2 million to any payment with respect to accounts payable, but not,
directly or indirectly, for (i) except for expenses relating to the Business Combination, the satisfaction of any indebtedness of the
Company or any of its Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or
(iii) the settlement of any outstanding litigation as at December 31, 2023. The Company secured funding subsequent to year-end with total
of $2 million, and that the Company received $2 million funding to date.
The Company can make no assurance
that required financings will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one
or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there
would likely be a material adverse effect on the Company and its financial statements.
The consolidated financial
statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. If the going concern
basis was not appropriate for these consolidated financial statements, then adjustments would be necessary in the carrying value of the
assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. These adjustments could be material.
The fertility market in which NewGenIvf
participates is competitive, and if NewGenIvf does not continue to compete effectively, its results of operations could be materially
and adversely affected.
The market for NewGenIvf’s
solutions is competitive and is likely to attract increased competition, which could make it hard for it to succeed. NewGenIvf faces significant
competition from other fertility companies and other players in the fertility market. Some of NewGenIvf’s competitors are more established,
have a longer operating history and a larger client base, benefit from greater brand recognition and have substantially greater financial,
technical and marketing resources than NewGenIvf does. NewGenIvf’s competitors may compete with NewGenIvf in a variety of ways,
including seeking to develop or integrating solutions and services that may become more efficient or appealing to NewGenIvf’s existing
and potential clients, achieving superior clinical outcomes, having access to a network of more high-quality fertility specialists, establishing
more comprehensive data reporting and sharing systems, conducting brand promotions and other marketing activities, and making investments
in and acquisitions of NewGenIvf’s business partners. While NewGenIvf believes that one of its key competitive advantages is its
ability to provide a broad range of services, and NewGenIvf does not believe any competitors have developed a similar broad range services
in Asia Pacific at this time, current or future competitors may be successful in doing so in the future. If current or future competitors
are successful at developing a similar broad range of services, NewGenIvf’s financial performance may be negatively impacted.
In addition, NewGenIvf believes
that there is growing awareness of the demand for fertility services. As the fertility services field gains more attention, more competitors
may be drawn into the market. NewGenIvf also could be adversely affected if NewGenIvf fails to identify or effectively respond to changes
in market dynamics. As a result of any of these factors, NewGenIvf may not be able to continue to compete successfully against its current
or future competitors, and this competition could result in the decrease in its clients base and market share and the failure of its platform
to continue to maintain market acceptance, which would materially and adversely affect its business, financial condition and results of
operations.
NewGenIvf has a limited operating history
with its current platform of solutions, which makes it difficult to predict its future prospects, financial performance and results of
operations.
The predecessor entity of
the Company prior to the Business Combination in April of 2024, NewGenIvf Limited, a Cayman Islands exempted company, was established
in 2019, and although it launched its fertility services in 2014, has a limited operating history. As a result of its limited operating
history with its current platform of solutions, as well as a limited amount of time serving a majority of its client base, its ability
to accurately forecast its future results of operations, key operating data, net revenue, cash flows, and operating margins is limited
and subject to a number of uncertainties, including its ability to plan for and model future growth. NewGenIvf’s historical revenue
growth should not be considered indicative of its future performance. Further, in future periods, its revenue growth could slow or decline
for a number of reasons, including risks, challenges and uncertainties that NewGenIvf has encountered and may continue to encounter that
are frequently experienced by companies at an early stage, slowing demand for its solutions and fertility services in general, changes
in utilization trends by its clients, general economic slowdown, an increase in unemployment, an increase in competition, changes to health
care trends and regulations, changes to science relating to the fertility market, a decrease in the growth of the fertility market, or
its failure, for any reason, to continue to take advantage of growth opportunities. If NewGenIvf’s assumptions regarding these risks
and uncertainties and its future revenue growth are incorrect or change, or if it does not address these risks successfully, its operating
and financial results could differ materially from its expectations, and its business could suffer.
NewGenIvf’s marketing efforts depend
significantly on its ability to receive positive references from its existing clients.
NewGenIvf’s marketing
efforts depend significantly on its ability to call on its current clients to provide positive references to new, potential clients. Given
its limited number of long-term clients, the loss or dissatisfaction of any client could substantially harm its brand and reputation,
inhibit the market adoption of its offering and impair its ability to attract new clients and maintain existing clients. Any of these
consequences could have an adverse effect on its business, financial condition and results of operations.
If NewGenIvf is unable to attract new clients,
its business, financial condition and results of operations would be adversely affected.
To increase its revenue,
NewGenIvf must continue to attract new clients. NewGenIvf’s ability to do so depends in large part on the success of its sales and
marketing efforts, and the success of references through existing clients. Potential clients may seek out other options; therefore, NewGenIvf
must demonstrate that its solutions are valuable and superior to alternatives. If NewGenIvf fails to provide high-quality solutions and
convince clients of the benefits of its model and value proposition, NewGenIvf may not be able to attract new clients. If the markets
for NewGenIvf’s solutions decline or grow more slowly than it expects, or if the number of clients that contract with it for its
solutions declines or fails to increase as it expects, its financial results could be harmed. As the markets in which NewGenIvf participate
mature, fertility solutions and services evolve and competitors begin to enter into the market and introduce differentiated solutions
or services that are perceived to compete with its solutions, particularly if such competing solutions are adopted by its competitors,
its ability to sell its solutions could be impaired. As a result of these and other factors, NewGenIvf may be unable to attract new clients,
which would have an adverse effect on its business, financial condition and results of operations.
NewGenIvf’s business depends on its
ability to maintain its existing client demographics. Any failure to do so would harm its business, financial condition and results of
operations.
As part of its growth strategy,
NewGenIvf is focused on maintaining its services within its existing client demographics. NewGenIvf mainly competes with mid-level private
clinics and hospitals, which have improved and developed their services and equipment over the years. In addition to private clinics
and hospitals already existing, foreign medical companies may also enter the markets where NewGenIvf operates. Such foreign medical companies
may be well-placed to compete with NewGenIvf due to their larger network size, reputation as global players and access to more advanced
technology and financial resources. The expansion of existing competitors in the industry may erode NewGenIvf’s existing market
share or decrease its traditional client pool. There can be no assurance that NewGenIvf will be able to compete effectively and therefore
its future business growth may suffer.
A significant reduction in the utilization
of NewGenIvf’s solutions could have an adverse effect on its business, financial condition and results of operations.
A significant reduction in
the number of clients using NewGenIvf’s solutions could adversely affect its business, financial condition and results of operations.
Factors that could contribute to a reduction in the use of its solutions include: general economic downturn that results in adverse financial
conditions; regulatory changes; failure to adapt and respond effectively to changing medical landscape, changing regulations, changing
client needs, requirements or preferences; negative publicity, through social media or otherwise and news coverage.
If NewGenIvf fails to offer high-quality
support, its reputation could suffer.
NewGenIvf relies on its client
account management personnel and the patient navigators (the “PNs”) to resolve client issues and help clients realize the
full benefits that its solutions and services provide. High-quality support is also important for the renewal and expansion of its services
to existing clients. The importance of its support functions will increase as NewGenIvf expands its business and pursue new clients. If
NewGenIvf does not help its clients quickly resolve issues and provide effective ongoing supports, its ability to maintain and expand
its offerings to existing and new clients could suffer, and its reputation with existing or potential clients could suffer. Further, to
the extent that NewGenIvf is unsuccessful in hiring, training and retaining adequate PNs and client account management personnel, its
ability to provide adequate and timely support to its clients would be negatively impacted, and its clients’ satisfaction with its
solutions and services would be adversely affected.
NewGenIvf’s failure to effectively
develop and expand its marketing and sales capabilities could harm its ability to increase its client base and achieve broader market
acceptance of solutions NewGenIvf provides.
NewGenIvf’s ability
to increase its client base and achieve broader market acceptance of solutions it provides will depend to a significant extent on its
ability to expand its marketing and sales capabilities. NewGenIvf plans to continue expanding its direct sales force and to dedicate significant
resources to sales and marketing programs, including direct sales, inside sales, targeted direct marketing, advertising, digital marketing,
e-newsletter and conference sponsorships. All of these efforts will require it to invest significant financial and other resources. Its
business and results of operations could be harmed if its sales and marketing efforts do not generate significant increases in revenue.
NewGenIvf may not achieve anticipated revenue growth from expanding its sales and marketing efforts if it is unable to hire, develop,
integrate and retain talented and effective sales personnel, if its new and existing sales personnel, on the whole, are unable to achieve
desired productivity levels in a reasonable period of time, or if its sales and marketing programs are not effective.
NewGenIvf may experience net losses and
may not sustain profitability in the future.
NewGenIvf experienced significant
revenue decrease from 2019 to 2020, due to the impact of COVID-19. NewGenIvf is not certain whether it will obtain sufficient levels of
sales to sustain its growth or maintain profitability in the future. NewGenIvf also expects its costs and expenses to increase in future
periods, which could negatively affect its future results of operations if its revenue does not increase accordingly. In particular, NewGenIvf
intends to continue to incrementally expand its sales and client account management teams to educate potential clients and drive new client
adoption. NewGenIvf also expects to incur additional costs as it introduces new solutions and services to enhance its comprehensive fertility
offering. NewGenIvf will also face increased compliance costs associated with growth, the expansion of its client base and being a public
company. NewGenIvf’s efforts to grow its business may be costlier than it expects, and NewGenIvf may not be able to increase its
revenue enough to offset its increased operating expenses. NewGenIvf may incur significant losses in the future for a number of reasons,
including the other risks described herein, and unforeseen expenses, difficulties, complications and delays, and other unknown events.
If NewGenIvf is unable to sustain profitability, the value of its business and common stock may significantly decrease.
NewGenIvf’s future revenue may not
grow at the rates it historically has, or at all.
NewGenIvf has experienced
growth since its business operations started in 2014. Revenue and NewGenIvf’s client base may not grow at the same rates they historically
have, or they may decline in the future. NewGenIvf’s future growth will depend, in part, on its ability to:
| ● | continue to attract new clients
and/or maintain existing clients; |
| ● | price its solutions and services
effectively so that it is able to attract new clients, expand sales to its existing clients and maintain profitability; |
| ● | provide its clients with client
support that meets their needs, including through dedicated PNs; |
|
● |
maintain successful collection of applicable receivable balances; |
|
● |
retain and maintain relationships with high-quality and respected fertility specialists; |
|
● |
attract and retain highly qualified personnel to support all clients; and |
|
● |
increase awareness of its brand and successfully compete with other competitors. |
NewGenIvf may not successfully
accomplish all or any of these objectives, which may affect its future revenue, and which makes it difficult for it to forecast its future
results of operations. In addition, if the assumptions that NewGenIvf uses to plan its business are incorrect or change in reaction to
changes in its market, it may be difficult for it to maintain profitability. NewGenIvf’s shareholders should not rely on its revenue
for any prior quarterly or annual periods as any indication of its future revenue or revenue growth.
In addition, NewGenIvf expects
to continue to expend substantial financial and other resources on:
|
● |
technology infrastructure, including systems architecture, scalability, availability, performance and security; and |
|
● |
general administration, including increased legal and accounting expenses associated with being a public company. |
These investments may not
result in increased revenue growth in its business. If NewGenIvf is unable to increase its revenue at a rate sufficient to offset the
expected increase in its costs, its business, financial position, and results of operations will be harmed, and NewGenIvf may not be able
to maintain profitability over the long term. Additionally, NewGenIvf may encounter unforeseen operating expenses, difficulties, complications,
delays and other unknown factors that may result in losses in future periods.
If its revenue growth does
not meet its expectations in future periods, NewGenIvf may not maintain profitability in the future, its business, financial position
and results of operations may be harmed.
NewGenIvf’s quarterly and annual results
may fluctuate significantly and may not fully reflect the underlying performance of NewGenIvf’s business.
NewGenIvf’s quarterly
and annual results of operations, including the levels of NewGenIvf’s revenues, expenses, net (loss)/income and other key metrics,
may vary significantly in the future due to a variety of factors, some of which are outside of NewGenIvf’s control, and period-to-period
comparisons of NewGenIvf’s operating results may not be meaningful, especially given NewGenIvf’s limited operating history.
Accordingly, the results for any one fiscal quarter or any one fiscal year are not necessarily an indication of future performance. Fluctuations
in quarterly and/or annual financial results may adversely affect the price of NewGenIvf’s ordinary shares. Factors that may cause
fluctuations in NewGenIvf’s quarterly and annual financial results include:
| ● | NewGenIvf’s ability to
attract new customers and maintain relationships with existing customers; |
| ● | changes in NewGenIvf’s
products and services offered and introduction of new services and products; |
| ● | the amount and timing of operating
expenses related to marketing and the maintenance and expansion of NewGenIvf’s business, operations and infrastructure; |
| ● | general economic, industry and
market conditions; and |
| ● | the timing of expenses related
to the development or acquisition of technologies or businesses. |
If the estimates and assumptions NewGenIvf
uses to determine the size of the target markets for its services are inaccurate, its future growth rate may be impacted and its business
would be harmed.
Market opportunity estimates
and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
Market opportunity estimates and growth forecasts included in this prospectus, including those NewGenIvf has generated itself, are subject
to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate, including the risks described
in this prospectus. Even if the markets in which NewGenIvf competes achieve the forecasted growth, its business could fail to grow at
similar rates, if at all.
NewGenIvf’s estimates
of the market opportunity for its services are based on the assumption that the purpose-built, data-driven and disruptive fertility services
platform with the plan design NewGenIvf offers will be attractive to clients. Clients may pursue alternatives or may not see the value
in providing enhanced fertility-related services. In addition, NewGenIvf believes that it is expanding the size of the fertility market
as NewGenIvf enhances demand and increase awareness for fertility services. If these assumptions prove inaccurate, or if the increase
in awareness of fertility services attracts potential competitors to the market and results in greater competition, NewGenIvf’s
business, financial condition and results of operations could be adversely affected.
It is difficult to predict
the demand for NewGenIvf’s solutions, the entry of competitive solutions or the future growth rate and size of the fertility market.
The expansion of the fertility market depends on a number of factors, including, but not limited to: the continued trend of individuals
starting families later in life, increase in the number of single mothers by choice, adoption of non-traditional paths to parenthood and
continued de-stigmatization of infertility.
If there is a reduction in
demand caused by a lack of client acceptance, weakening economic conditions, data security or privacy concerns, governmental regulation,
competing offerings or otherwise, the market for its solutions and services might not continue to develop or might develop more slowly
than NewGenIvf expects, which would adversely affect its business, financial condition and results of operations.
NewGenIvf may not be able to successfully
manage its growth, and if NewGenIvf is not able to grow efficiently, its business, financial condition and results of operations could
be harmed.
As usage of its solutions
grows, NewGenIvf will need to devote additional resources to improving and maintaining its infrastructure. In addition, NewGenIvf will
need to appropriately scale its internal business systems and its client account management and services personnel to serve its growing
client base. Any failure of or delay in these efforts could result in reduced client satisfaction, resulting in decreased sales to new
clients and lower renewal and utilization rates by existing clients, which could hurt its revenue growth and its reputation. Even if NewGenIvf
is successful in these efforts, they will require the dedication of management time and attention. NewGenIvf could also face inefficiencies
or service disruptions as a result of its efforts to scale its internal infrastructure. NewGenIvf cannot be sure that the expansion and
improvements to its internal infrastructure will be effectively implemented on a timely basis, and such failures could harm its business,
financial condition and results of operations.
If NewGenIvf’s new solutions and services are not adopted
by its clients, or if it fails to innovate and develop new offerings that are adopted by its clients, its revenue and results of operations
may be adversely affected.
To date, NewGenIvf has derived
a substantial majority of its revenue from sales of its fertility services. As NewGenIvf operates in an evolving industry, its long-term
results of operations and continued growth will depend on its ability to successfully develop and market new successful solutions and
services to its clients. If its existing clients do not value and/or are not willing to make additional payments for such new solutions
or services, it could adversely affect its business, financial condition and results of operations. If NewGenIvf is unable to predict
clients’ preferences, if the markets in which NewGenIvf participates change, including in response to government regulation, or
if NewGenIvf is unable to modify its solutions and services on a timely basis, NewGenIvf may lose clients. Its results of operations would
also suffer if its innovations were not responsive to the needs of the clients, appropriately timed with market opportunity or effectively
brought to market.
If NewGenIvf fails to adapt and respond
effectively to the changing medical landscape, changing regulations, changing client needs, requirements or preferences, its offerings
may become less competitive.
The market in which NewGenIvf
competes is subject to a changing medical landscape and changing regulations, as well as changing client needs, requirements and preferences.
The success of its business will depend, in part, on its ability to adapt and respond effectively to these changes on a timely basis.
NewGenIvf’s business strategy may not effectively respond to these changes, and NewGenIvf may fail to recognize and position itself
to capitalize upon market opportunities. NewGenIvf may not have sufficient advance notice and resources to develop and effectively implement
an alternative strategy. There may be scientific or clinical changes that require it to change its solutions or that make its solutions
less competitive in the marketplace. If there are sensitivities to its model or its existing competitors and new entrants create new disruptive
business models and/or develop new solutions that clients prefer to its solutions, NewGenIvf may lose clients, and its results of operations,
cash flows and/or prospects may be adversely affected. The future performance of NewGenIvf’s business will depend in large part
on its ability to design and implement market appropriate strategic initiatives, some of which will occur over several years in a
dynamic industry. If these initiatives of NewGenIvf do not result in met objectives, NewGenIvf’s results of operations could be
adversely affected.
If NewGenIvf fails to maintain and enhance
its brand, its ability to expand its client base will be impaired and its business, financial condition and results of operations may
suffer.
The growth of NewGenIvf’s
business partially depends on the recognition of NewGenIvf’s brand and reputation. NewGenIvf believes that maintaining and enhancing
its brand is important to support the marketing and sale of its existing and future solutions to new clients and expand sales of its solutions
to existing clients. NewGenIvf also believes that the importance of brand recognition will increase as competition in its market increases.
Successfully maintaining and enhancing its brand will depend largely on the effectiveness of its marketing efforts, its ability to provide
reliable services that continue to meet the needs of its clients at competitive prices, its ability to maintain its clients’ trust,
its ability to continue to develop new solutions, and its ability to successfully differentiate its platform from competitive solutions
and services. NewGenIvf’s brand promotion activities may not generate client awareness or yield increased revenue, and even if they
do, any increased revenue may not offset the expenses NewGenIvf incurs in building its brand. If NewGenIvf fails to successfully promote
and maintain its brand, its business, financial condition and results of operations may suffer.
If NewGenIvf fails to retain and motivate
members of its management team or other key employees, or fails to attract additional qualified personnel to support its operations, its
business and future growth prospects could be harmed.
NewGenIvf’s success
and future growth depend largely upon the continued services of its management team and its other key employees. From time to time, there
may be changes in its executive management team or other key employees resulting from the hiring or departure of these personnel. Its
executive officers and other key employees are employed on an at-will basis, which means that these personnel could terminate their employment
with it at any time. The loss of one or more of its executive officers, or the failure by its executive team to effectively work with
its employees and lead its company, could harm its business.
In addition, to execute its
growth plan, NewGenIvf must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for
experienced medical officers and scientific staffs and sales and client account management personnel. There is no guarantee NewGenIvf
will be able to attract such personnel or that competition among potential employers will not result in increased salaries or other benefits.
From time to time, NewGenIvf has experienced, and NewGenIvf expects to continue to experience, difficulty in hiring and retaining employees
with appropriate qualifications. Many of the companies with which NewGenIvf competes for experienced personnel have greater resources
than NewGenIvf has. If NewGenIvf hires employees from competitors or other companies, their former employers may attempt to assert that
these employees or NewGenIvf has breached their legal obligations, resulting in a diversion of its time and resources. In addition, prospective
and existing employees often consider the value of the equity awards they receive in connection with their contribution to the company.
If the perceived value of its equity awards declines, experiences significant volatility, or increases such that prospective employees
believe there is limited upside to the value of its equity awards, it may adversely affect its ability to recruit and retain key employees.
If NewGenIvf fails to attract new personnel or fails to retain and motivate its current personnel, its business and future growth prospects
could be harmed.
Furthermore, in order to
attract and retain key personnel and employees, the compensation amounts for NewGenIvf’s executive officers may change significantly
after consummation of the Business Combination, although there are currently no agreements in place relating to any such post Business
Combination compensation arrangements. As a result, NewGenIvf’s expenses associated with the compensation may increase, which may
also have an adverse effect on its results of operations.
To successfully market and sell its services
and products in Asia-Pacific markets, NewGenIvf must address many international business risks with which NewGenIvf has limited experience.
NewGenIvf’s business
is subject to risks in connection with changes in international, national and local economic and market conditions, including the effects
of global financial crises, effects of terrorist acts and war and global pandemics. Such economic changes could negatively impact infertile
couples’ abilities to pay for fertility treatments around the world.
NewGenIvf’s strategy
is to increase its international presence in Asia-Pacific countries and its international sales are subject to a number of risks, including:
|
● |
increased competition as a result of more products and procedures receiving regulatory approval or otherwise free to market in international markets; |
| ● |
longer accounts receivable payment cycles and difficulties in collecting accounts receivable; |
| ● |
reduced or varied protection for intellectual property rights in some countries; |
| ● |
export restrictions, trade regulations, and foreign tax laws; |
| ● |
fluctuations in currency exchange rates; |
| ● |
foreign certification and regulatory clearance or approval requirements; |
| ● |
customs clearance and shipping delays; |
|
● |
political, social, and economic instability abroad, terrorist attacks, and security concerns in general; |
|
● |
preference for locally provided services; |
|
● |
potentially adverse tax consequences, including the complexities of foreign value-added tax systems; |
|
● |
the burdens of complying with a wide variety of foreign laws and different legal standards; and |
|
● |
increased financial accounting and reporting burdens and complexities. |
If one or more of these risks
are realized, its business, financial condition and results of operations could be adversely affected.
Ethical, legal and social concerns related
to the use of assisted reproductive technology could reduce demand for the fertility services provided by the medical facilities in NewGenIvf’s
network, and thus may adversely affect the business, financial conditions and results of operations of the medical facilities in its network.
Patient sentiment and distrust
of the use of assisted reproductive technology may lead to less demand for fertility services. Assisted reproductive technologies, including
genetic testing, technologies used for surrogacy and egg donation and gender selection, have raised ethical, legal and social issues regarding
privacy and the appropriate uses of the resulting information. Government authorities could, for social or other purposes, limit or regulate
the use of assisted reproductive technology to certain conditions. Similarly, these concerns may lead patients to refuse to use, or physicians
to be reluctant to order, assisted reproductive services even if permissible. These and other ethical, legal and social concerns may limit
market acceptance of fertility services or reduce patient demand for such services, either of which could have a material adverse effect
on the business, financial condition and results of operations of the medical facilities in NewGenIvf’s network, and NewGenIvf itself.
NewGenIvf is reliant on revenue from international
clients.
Fertility services revenue
from international clients are an important part of NewGenIvf’s revenue, though NewGenIvf is expanding rapidly into the local markets.
The number of international clients travelling to Thailand, Cambodia and Kyrgyzstan to seek fertility services may, however, be affected
by a number of factors, including the economic status of the foreign client’s country of origin, the relative exchange rate of the
client’s home currency to the relevant authorities, which may affect the cost of treatment, natural disasters, pandemics like COVID-19,
and political tension or acts of terrorism in such countries and the region. For example, the COVID-19 has had resulted in a number of
countries declaring a state of emergency and a number of countries, including the countries in Asian Pacific, imposing extensive travel
restrictions, which in turn caused a decrease in the numbers of internal clients traveling to Thailand, Cambodia or Kyrgyzstan for treatments.
These events could cause
a postponement or a reduction in the number of clients traveling to Thailand, Cambodia or Kyrgyzstan, and could in turn affect revenues
from international clients, which is the significant contributor in terms of volume. A decline in the medical tourism industry may have
a material adverse effect on NewGenIvf’s financial condition and results of operations.
Fluctuations in exchange rates could have
a material and adverse effect on NewGenIvf’s results of operations and the value of your investment.
NewGenIvf’s reporting
currency is U.S. dollars. The functional currency of NewGenIvf and its subsidiaries include Hong Kong dollar (“HK$”),
Thai baht (“THB”), Cambodian riel (“KHR”) and United States dollar (“USD”). Accordingly, fluctuations
in the value of HK$, THB and KHR relative to the USD could affect its results of operations due to translational remeasurements. As its
international operations expand, an increasing portion of its revenue and operating expenses may be denominated in non- HK$, THB or KHR
currencies. Accordingly, NewGenIvf’s revenue and operating expenses will become increasingly subject to fluctuations due to changes
in foreign currency exchange rates. If NewGenIvf is not able to successfully hedge against the risks associated with currency fluctuations,
NewGenIvf’s business, financial condition and results of operations could be materially adversely affected.
Governmental control of currency conversion
may limit NewGenIvf’s ability to utilize NewGenIvf’s net revenue effectively and affect the value of your investment.
NewGenIvf’s revenue
and expenses for its businesses are substantially denominated in THB, which are currently not freely convertible currencies. A portion
of such revenue must be converted into other currencies in order to meet its foreign currency obligations. For example, NewGenIvf’s
subsidiaries will need to obtain foreign currency to make payments of declared dividends, if any, on its shares.
Under the existing foreign
exchange regulations in Thailand, NewGenIvf will be able to make current account foreign exchange transactions. However, in the future,
governments may take measures, at its discretion, to restrict access to foreign currencies for capital account and current account transactions
under certain circumstances. If such measures are implemented, NewGenIvf may not be able to pay dividends in foreign currencies to holders
of its shares. Foreign exchange transactions under its capital account are subject to significant foreign exchange controls and require
certain approvals. These limitations could affect our ability to obtain foreign exchange through offshore financing.
The value of the THB against
the U.S. dollar and other currencies fluctuates, and is subject to changes resulting from policies of the Thailand and other governments,
and depends to a large extent on domestic and international economic and political developments as well as supply and demand in the local
market. For example, the Bank of Thailand, which is the central bank of Thailand, is responsible for formulating and implementing monetary
policies in the country to maintain the price stability and promote economic stability and sustainable growth. The Bank of Thailand imposes
(four) measures in preventing THB fluctuation. Those are measures to limit THB liquidity, to curb capital inflows, to limit the flows
on Non-resident Bank Account and Non-resident Baht for Securities, and to limit the flows on Non-Deliverable Forward transactions. With
an increased floating range of the THB’s value against foreign currencies and a more market-oriented mechanism for determining the
mid-point exchange rates, the THB may further appreciate or depreciate significantly in value against the U.S. dollar or other foreign
currencies in the long-term, depending on the fluctuation of the basket of currencies against which it is currently valued, or it may
be permitted to enter into a full float, which may also result in a significant appreciation or depreciation of the THB against the U.S. dollar
or other foreign currencies. It cannot be assured that THB will not experience significant appreciation or depreciation against the U.S. dollar
or other foreign currencies in the future.
Furthermore, NewGenIvf is
also currently required to obtain approvals before converting significant sums of foreign currencies into THB. All of these factors could
materially and adversely affect its business, results of operations, financial condition and prospects, and could reduce the value of,
and dividends payable on, its shares in foreign currency terms.
Substantially all of NewGenIvf’s assets
and operations are located in Thailand, Cambodia and Kyrgyzstan and they are subject to economic, legal and regulatory uncertainties in
such countries.
Substantially all of NewGenIvf’s
operations and assets are based in Thailand, Cambodia and Kyrgyzstan. As a result, its businesses and operations are subject to the
changing economic conditions prevailing from time to time in such countries. Since 2020, Thailand’s economy has been experiencing
a slowdown. According to the National Economic and Social Development Board of Thailand (the “NESDB”) the GDP growth rate
of Thailand declined to minus 6.1% in 2020 and slightly recovered to 1.6% in 2021 and 2.6% in 2022. Under such conditions, the NESDB projected
that Thailand’s economy will only grow by 3.0% to 4.0% in 2023, lower than the previously growth in historical years.
Meanwhile, Cambodia’s post-pandemic economic recovery has gained momentum, but remains uneven. Traditional growth drivers, especially
manufacturing and agricultural commodities exports, have fully recovered. However, while travel and tourism have improved, the sector
remains well below pre-COVID-19 levels. The subsequent impact also caused the vendors and customers preference change, lower the willingness
travelling to Kyrgyzstan for surrogacy services. The economy is projected to grow, underpinned by merchandise exports and domestic economic
activity. Foreign direct investment, while diversified, remains affected by China’s related COVID-19 policies.
NewGenIvf also derives a
substantial portion of its revenue from Chinese clients and as such, its maintenance of PRC-sourced revenues and access to new and existing
clients from the PRC are also subject to the economic conditions of China. However, the near-term growth prospects of the PRC economy
are unclear due to the uncertain effects of ongoing economic stress caused by policies to contain the COVID-19 pandemic, trade and national
security policies, and the elevated levels of private and public indebtedness, among others. According to the National Statistics Bureau
of the PRC, growth rate of China’s GDP for the year 2022 slowed down to 3.0% on a year-on-year basis compared to the growth rate
of approximately 8.4% for the year 2021. In the second quarter of 2023, China’s GDP grew only 0.8% on a quarter basis, a significant
slowdown from the 2.2% quarter growth registered in the first quarter of 2023. A prolonged downturn in the PRC economy generally could
materially and adversely affect NewGenIvf’s results of operations.
Factors that may adversely
affect the economy and conditions in such countries include:
|
● |
political instability (e.g., Thailand’s national election in May 2023); |
|
● |
global economic conditions; |
|
● |
exchange rate fluctuations and the exchange control policy of the banks; |
|
● |
a prolonged period of inflation or increase in regional interest rates; |
|
● |
changes in government policies affecting import and export volumes; |
|
● |
natural disasters, including tsunamis, earthquakes, fires, floods, drought and similar events; |
|
● |
a potential recurrence or outbreak of avian influenza, severe acute respiratory syndrome or other infectious or contagious diseases like COVID-19 in Asian countries, and governmental policies to address such outbreak; |
|
● |
scarcity of credit or other financing, resulting in lower demand for products and services provided by companies in the region; |
|
● |
increases in oil prices and other commodity prices; |
|
● |
decreased consumer confidence; |
|
● |
other external recessions or potential economic downturns in the United States, Asia or other parts of the world; and |
|
● |
other regulatory, political or economic developments in or affecting the countries. |
The economic conditions in
Thailand, Cambodia, Kyrgyzstan and China are also affected by global economic conditions. The global credit markets have experienced,
and may continue to experience, volatility and liquidity disruptions, which have resulted in the consolidation, failure or near failure
of a number of institutions in the banking and insurance industries. There remains a concern that a return of the debt crisis in Europe,
the political unrest in the Middle East and Eastern Europe as well as rumors or threats or actual terrorist attacks or conflicts in the
Middle East, Southeast Asia, Eastern Europe or other regions will impinge upon the health of the global financial system. These or other
such events could adversely affect NewGenIvf’s business, financial condition, results of operations and prospects.
There is no assurance that
the economies and social conditions of Thailand, Cambodia, Kyrgyzstan and China will meet current projections or improve in the future.
Any instability or economic downturn could have a material adverse effect on NewGenIvf’s business, financial condition, results
of operations and prospects.
Failure to comply with the terms of future
financing arrangements could result in default, which could have an adverse effect on NewGenIvf’s cash flow and liquidity.
NewGenIvf may from time to
time enter into credit facilities and debt financing arrangements containing financial and other covenants that could, among other things,
restrict NewGenIvf’s business and operations. If NewGenIvf breaches any of these covenants, including the failure to maintain certain
financial ratios, NewGenIvf’s lenders may be entitled to accelerate NewGenIvf’s debt obligations. Any default under the credit
facility could result in the repayment of these loans prior to maturity as well as the inability to obtain additional financing, which
in turn may have a material adverse effect on NewGenIvf’s cash flow and liquidity.
NewGenIvf requires a significant amount
of capital to fund its operations and growth. If NewGenIvf cannot obtain sufficient capital on acceptable terms, its business, financial
condition, and prospects may be materially and adversely affected.
NewGenIvf requires a significant
amount of capital and resources for its operations and continued growth. NewGenIvf expects to make significant investments to fund operations,
laboratory upgrades, among other things, which may significantly increase NewGenIvf’s net cash used in operating activities. In
addition, NewGenIvf will continue to invest in laboratory and facilities which are fundamental to NewGenIvf’s business operation
and future growth. However, NewGenIvf cannot assure you that these investments will generate the optimal returns, if at all. To date,
NewGenIvf has historically funded its cash requirements primarily through operational, capital contributions from its shareholders and
short-term or long-term borrowings. If these resources are insufficient to satisfy NewGenIvf’s cash requirements, NewGenIvf may
seek to raise funds through additional equity offering or debt financing or additional bank facilities. NewGenIvf’s ability to obtain
additional capital in the future, however, is subject to a number of uncertainties, including those relating to its future business development,
financial condition, and results of operations, general market conditions for financing activities by companies in its industry, and macro-economic
and other conditions in Thailand, Cambodia, Kyrgyzstan and globally. If NewGenIvf cannot obtain sufficient capital on acceptable terms
to meet its capital needs, NewGenIvf may not be able to execute its growth strategies, and NewGenIvf’s business, financial condition,
and prospects may be materially and adversely affected.
The defects in certain leased property interests
and failure to register certain lease agreements may materially and adversely affect NewGenIvf’s business, financial condition,
results of operations, and prospects.
NewGenIvf leases premises
in Thailand, Cambodia and Kyrgyzstan in various locations. With respect to property leased by First Fertility PGS Center in Thailand,
the lessors did not have or provide NewGenIvf with property ownership certificates or other documents evidencing their rights to lease
such premises to First Fertility PGS Center. Therefore, NewGenIvf cannot assure that it will not be subject to any challenges, lawsuits,
or other actions taken against First Fertility PGS Center with respect to its leased premises for which the relevant lessors do not have
valid title or right to lease. If First Fertility PGS Center’s lessors’ right to lease premises is successfully challenged
by any third party, First Fertility PGS Center’s lease agreements may not be enforceable and NewGenIvf may be forced to vacate the
premises and relocate to a different location. Under such circumstances, NewGenIvf expects to incur relocation costs of up to THB3 million
and expects that there would not be material business interruption costs, if any.
In addition, the failure
of the lessor to provide sufficient legal evidence of its right to lease the premises has prevented First Fertility PGS Center from registering
the clinic with the Bangkok Metropolitan Authority (“BMA”) as required under the Public Health Act B.E. 2535 (1992) (the “PHA”).
Under Section 71 of the PHA, First Fertility PGS Center and its directors are subject to imprisonment of up to 6 (six) months and a fine
of up to THB50,000, or both. The BMA could also order First Fertility PGS Center to stop operating the clinic which would require relocation
of the clinic if First Fertility PGS Center could not make the necessary registration. Under such circumstances, First Fertility PGS Center
expects to incur relocation costs of up to THB3 million and expects that there would not be material business interruption costs, if any.
Only one of NewGenIvf’s
directors or officers, namely Ms. Fong, Hei Yue Tina, is also a director of First Fertility PGS Center. NewGenIvf believes that if First
Fertility PGS Center’s directors, including Ms. Fong, are found guilty of the above offence and subject to imprisonment, the
resulting impact on NewGenIvf’s business, results of operations and financial conditions would be limited, as Ms. Fong has limited
involvement in the day-to-day management of First Fertility PGS Center’s operations and Mr. Siu, Wing Fung Alfred and the other
directors and officers of NewGenIvf and its subsidiaries would be able to keep operating the group’s and First Fertility PGS Center’s
activities with limited disruptions.
In addition, NewGenIvf has
not registered the lease agreements of First Fertility Bishkek in Kyrgyzstan with the relevant government authorities. The enforceability
of the lease of property may therefore be subject to restrictions under relevant laws and regulations and NewGenIvf may be forced to vacate
the premises and relocate to a different premise. Under such circumstances, NewGenIvf expects to incur relocation costs of up to USD150,000
and expects that there would not be material business interruption costs, if any. Meanwhile, First Fertility Bishkek may be required to
pay a penalty for the late registration of the lease agreement with a lease term of 3 or more years, the maximum amount of which is KGS3060
($35).
NewGenIvf currently has no insurance coverage
for its operations.
The assisted reproductive
medical facilities in NewGenIvf’s network are exposed to potential liabilities that are inherent to the provision of services. Medical
and other liabilities may not be fully covered by insurance and the medical facilities may face claims in excess of the insurance coverage
or claims which are not covered by insurance due to other policy limitations or exclusions or where the medical facilities in NewGenIvf’s
network have failed to comply with the terms of the policy. Any uninsured risks may result in substantial costs and the diversion of resources,
which could adversely affect its results of operations and financial condition.
The insurance industries
in Thailand, Cambodia and Kyrgyzstan are still at early stages of development, and insurance companies in Thailand, Cambodia and Kyrgyzstan
currently offer limited business-related insurance products. NewGenIvf does not currently maintain insurance. NewGenIvf cannot assure
you that the medical facilities in its network will be able to obtain and/or maintain medical liability insurance on acceptable terms
or without substantial premium increases or at all in the future.
In addition, as NewGenIvf’s
business expands, the cost for each medical facility in its network and NewGenIvf to maintain an adequate level of insurance may become
increasingly high. NewGenIvf cannot ensure that the medical facilities in its network will be able to locate or purchase appropriate insurance
to cover the expanding operations in time, on commercially reasonable terms or at all. Any significant uninsured loss could have material
and adverse effects on the financial condition and results of operations of the medical facilities in NewGenIvf’s network, and thus
may affect its business, results of operations and financial condition.
Moreover, NewGenIvf does
not currently maintain professional malpractice liability insurance for its physicians and nurses. As a result, NewGenIvf may be subject
to medical disputes and claims arising under relevant laws from time to time, which could cause substantial damage to NewGenIvf if not
covered by professional malpractice liability insurance. Any dispute with clients, or any legal proceeding involving the physicians of
the medical facilities or medical professionals, regardless of its merit or eventual outcome, could result in significant legal costs
and financial and/or reputational damages to the medical facilities and NewGenIvf and materially and adversely affect the business, financial
condition and results of operations of the medical facilities in NewGenIvf’s network, and further affect its business, financial
condition, results of operations and prospects.
NewGenIvf may not be successful in adapting
to technological developments, which may affect its business and results of operations.
It is possible that new technologies
could be developed or scientific advances made by NewGenIvf’s competitors, or elsewhere and licensed to NewGenIvf’s competitors,
which cannot be replicated by NewGenIvf without significant capital expenditure or at all, or that replace or reduce the requirement for
assisted reproductive services, ultrasound or specialized diagnostics. The consequences for NewGenIvf of the development of new technologies
could include lower or loss of revenues, loss of market position and reduced prospects of NewGenIvf.
If its computer systems, or those of its
providers, specialty pharmacies or other downstream vendors lag, fail or suffer security breaches, NewGenIvf may incur a material disruption
of its services, which could materially impact its business and the results of operations.
NewGenIvf’s businesses
in Thailand, Cambodia and Kyrgyzstan are increasingly dependent on critical, complex and interdependent information technology systems
to support business processes as well as internal and external communications. NewGenIvf’s success is therefore dependent in part
on its ability to secure, integrate, develop, redesign and enhance its (or contract with vendors to provide) technology systems that support
its business strategy initiatives and processes in a compliant, secure, and cost and resource efficient manner. If NewGenIvf or its providers,
specialty pharmacies or other downstream vendors have an issue with its or their respective technology systems, it may result in a disruption
to its operations or downstream disruption to its relationships with its clients or its selective network of high-quality fertility specialists.
Additionally, if NewGenIvf chooses to insource any of the services currently handled by a third party, it may result in technological
or operational disruptions.
In addition, despite the
implementation of security measures, its internal computer systems, and those of its provider clinics, specialty pharmacies or other downstream
vendors, are potentially vulnerable to damage from malicious intrusion, malware, computer viruses, unauthorized access, natural disasters,
terrorism, war and telecommunication and electrical failures. While NewGenIvf is not aware that it has experienced any such system failure,
accident or security breach to date, if such an event were to occur and cause interruptions in its operations, it could result in a material
disruption to its ability to operate and deliver its solutions. In addition, to the extent that any disruption or security breach were
to result in a loss or inappropriate disclosure of confidential information, NewGenIvf could incur liability. See “— Risks
Related to Government Regulation — NewGenIvf operates in a highly regulated industry and must comply with a significant
number of complex and evolving requirements. Any lack of requisite approvals, licenses, or permits applicable to NewGenIvf’s business
may have a material and adverse impact on NewGenIvf’s business, financial condition, and results of operations — Data
Protection and Breaches.”
Risks Related to NewGenIvf’s Relationships with Third Parties
NewGenIvf’s business depends on its
ability to maintain its network of high-quality fertility specialists and other healthcare providers. If NewGenIvf is unable to do so,
its future growth would be limited and its business, financial condition and results of operations would be harmed.
NewGenIvf’s performance
and success is dependent upon its continued ability to maintain a credentialed network of high-quality fertility specialists, including
its senior management team, other key employees, as well as research and development and operation maintenance personnel, many of whom
are difficult to replace. Fertility specialists could refuse to contract, demand higher payments or take other actions that could result
in higher medical costs, less attractive service for its clients or difficulty meeting regulatory or accreditation requirements. Identifying
high-quality fertility specialists, credentialing and negotiating contracts with them and evaluating, monitoring and maintaining its network,
requires significant time and resources. Competition in the healthcare industry for qualified employees is intense. NewGenIvf may need
to offer higher compensation and other benefits in order to attract and retain key personnel in the future, which could increase NewGenIvf’s
compensation expenses, including stock-based compensation. NewGenIvf’s continued ability to compete effectively depends on NewGenIvf’s
ability to attract new employees and to retain and motivate NewGenIvf’s existing employees. If NewGenIvf is not successful in maintaining
its relationships with top fertility specialists, these fertility specialists may refuse to renew their contracts with it, and potential
competitors may be effective in onboarding these or other high-quality fertility specialists to create a similarly high-quality network.
There may be additional shifts in the fertility specialty provider space as the fertility market matures, and high-quality fertility specialists
may become more demanding in re-negotiating to remain in its network. Its ability to develop and maintain satisfactory relationships with
high-quality fertility specialists also may be negatively impacted by other factors not associated with it, such as regulatory changes
impacting providers or consolidation activity among hospitals, physician groups and healthcare providers. In addition, certain organizations
of physicians, such as practice management companies (which group together physician practices for administrative efficiency), may change
the way in which healthcare providers do business with it and may compete directly with it, which could adversely affect its business,
financial condition and results of operations. NewGenIvf intends to grant, and may continue to grant, options and other types of awards,
which may result in increased share-based compensation expenses.
NewGenIvf’s Share Incentive
Award will allow NewGenIvf to enhance its ability to attract and retain exceptionally qualified individuals and agents and to encourage
them to acquire a proprietary interest in the company’s growth and performance. Competition for highly skilled personnel and agents
is often intense and NewGenIvf may incur significant costs or may not be successful in attracting, integrating, or retaining qualified
personnel and agents to fulfill NewGenIvf’s current or future needs. NewGenIvf believes that the granting of share-based awards
is of significant importance to NewGenIvf’s ability to attract and retain agents, key personnel and employees, and NewGenIvf will
continue to grant share-based awards in the future. As a result, NewGenIvf’s expenses associated with share-based compensation may
increase, which may have an adverse effect on NewGenIvf’s results of operations.
Meanwhile, the retirement
or loss of certain specialists, scientific staff or other key personnel, the activities of competitors, the introduction of a competing
service that is perceived to be superior to the services provided by NewGenIvf, or other events which impact NewGenIvf’s reputation
could adversely affect NewGenIvf’s relationships with fertility specialists. For example, one specialist who was previously engaged
by NewGenIvf brought a lawsuit against NewGenIvf regarding disputed remuneration, which resulted in a settlement for NewGenIvf to compensate
the specialist with a sum of approximately US$98,000. Also, fertility specialists’ relationship with NewGenIvf could affect their
behaviors in recommending NewGenIvf’s services or referring patients to NewGenIvf, which could in turn adversely impact the number
of patients treated by NewGenIvf and adversely impact on its financial performance, market position and prospects.
In addition, the perceived
value of NewGenIvf’s solutions and its reputation may be negatively impacted if the services provided by fertility specialists or
other healthcare providers are not satisfactory to NewGenIvf’s clients, including as a result of error that could result in litigation.
For example, if fertility specialist or other healthcare provider releases sensitive information of its clients, it could incur additional
expenses and give rise to litigation against NewGenIvf. Any such issue with one of its providers may expose it to public scrutiny, adversely
affect its brand and reputation, expose it to litigation or regulatory action, and otherwise make its operations vulnerable. Further,
if its services result in less than favorable outcomes, this could cause it to fail to meet its contractually guaranteed specified service
metrics, and NewGenIvf could be obligated to provide the client with a fee reduction or a second chance for free, depending on their contract
terms. The failure to maintain its selective network of high-quality fertility specialists or the failure of those specialists to meet
and exceed its clients’ expectation, may result in a loss of or inability to grow or maintain its client base, which could adversely
affect its business, financial condition and results of operations.
The medical facilities and professionals
in NewGenIvf’s network could become the subject of litigation, allegations and other claims, and NewGenIvf is not insured against
these liabilities.
NewGenIvf relies on the physicians
and other medical professionals of the assisted reproductive medical facilities in its network to make proper clinical decisions regarding
the diagnosis and treatment of clients. However, NewGenIvf does not have full and direct control over every step of clinical activities
undertaken at each of the medical facilities. In addition, physicians and medical professionals outside NewGenIvf’s network may
introduce patients to NewGenIvf and conduct medical treatments and/or procedures for such patients in NewGenIvf’s facilities. NewGenIvf
enters into independent contractor agreements with such physicians and medical professionals and treats such patients as NewGenIvf’s
own patients. As such, NewGenIvf will have to bear any liabilities arising from their medical treatments and/or procedures conducted in
NewGenIvf’s facilities. Any incorrect clinical decision or malpractice on the part of physicians and other medical professionals
(including those from outside of its network), or any failure by the medical facilities in its network to properly manage their clinical
activities may result in unsatisfactory treatment outcomes, patient injury or even death, which could lead to disputes with patients and/or
their families or the medical professionals, including those from outside its network. In its experience, moreover, clients of fertility
treatments tend to be more demanding on the medical services received. In addition, the relevant laws governing medical disputes and claims
grant claimants liberal rights in bringing claims against physicians and other medical professionals practicing in the jurisdiction. As
a result, the medical facilities in its network may be subject to medical disputes and claims arising under relevant laws, from time to
time, which could generate substantial damages imposed on such facilities if not covered by professional liability insurance. Any dispute
with its patients and/or their families or the medical professionals, including those from outside its network, or any legal proceeding
involving the physicians of the medical facilities or medical professionals, including those from outside its network, regardless of its
merit or eventual outcome, could result in significant legal costs and reputational damage to the medical facilities and materially and
adversely affect the business, financial condition and results of operations of the medical facilities in its network, and further affect
its business, financial condition and results of operations.
The assisted reproductive medical facilities
in NewGenIvf’s network have limited control over the quality of the pharmaceuticals, medical equipment, medical consumables and
other supplies used in its operations, and cannot guarantee that the products in use are not defective or counterfeit. NewGenIvf also
has no control over independent sub-contractors and cannot guarantee the services thereof.
The assisted reproductive
medical facilities in NewGenIvf’s network procure a variety of pharmaceuticals, medical equipment, consumables and other supplies
in NewGenIvf’s operations from third-party suppliers. As the medical facilities in NewGenIvf’s network do not engage in the
direct manufacture of such supplies, NewGenIvf cannot assure you that such supplies are free of defects and meet relevant quality standards
or, in the case of imported supplies, verify the origin of such products. In addition, there may be counterfeit pharmaceutical products
manufactured without proper licenses or approvals or fraudulently mislabeled with respect to their content or manufacturer in the pharmaceutical
markets. In some cases these products are very similar in appearance to the authentic products. The quality control checks and processes
may not be able to identify all counterfeit pharmaceutical products in the inventory. Any sale of such products by the medical facilities
in NewGenIvf’s network, regardless of its knowledge as to their authenticity, may subject the medical facilities to administrative
sanctions, civil claims, negative publicity or reputational damage. NewGenIvf cannot assure you that the medical facilities in our network
will be able to successfully claim full indemnity from such manufacturers of counterfeit pharmaceutical products.
NewGenIvf also cannot assure
you that the medical facilities in our network will not encounter incidents relating to defective products, or that such incidents will
not materially and adversely affect our network of medical facilities. If the products provided by NewGenIvf’s suppliers are defective,
of poor quality or are otherwise unsafe or ineffective, the medical facilities in NewGenIvf’s network could be subject to liability
claims, complaints or adverse publicity, any of which would materially and adversely affect its results of operations and reputation.
NewGenIvf cannot assure you that the medical facilities in NewGenIvf’s network will find suitable replacement suppliers on commercially
acceptable terms or at all.
The suppliers are also subject
to extensive laws, rules and regulations. If any suppliers violate applicable laws, rules and regulations, NewGenIvf’s reputation
or procurement may be materially and adversely affected. In addition, the medical facilities in NewGenIvf’s network may be exposed
to reputational damages or even liabilities for defective goods provided by the suppliers or negative publicity associated with any suppliers,
and the business and results of operations of the medical facilities in NewGenIvf’s network and NewGenIvf could suffer as a result.
Independent sub-contractors
and/or agents that work with NewGenIvf are also subject to extensive laws, rules, and regulations. If any sub-contractor and/or agent
violates any applicable laws, rules, regulations or breaches any agreements, NewGenIvf’s reputation may be materially and adversely
affected and NewGenIvf may be penalized by regulatory or other parties. In addition, NewgenIvf’s clients may engage Newgen’s
sub-contractors and/or agents for ongoing services or additional services following the termination of contracts with NewGenIvf. NewGenIvf
has no control over the services provided by sub-contractors and cannot assure the quality of such services or ensure compliance with
applicable laws, rules and regulations. In addition, the services provided by independent sub-contractors may expose NewGenIvf to public
scrutiny, adversely affect its brand and reputation, expose it to litigation or regulatory action, and otherwise make its operations vulnerable
if such independent sub-contractors fail to meet their contractual obligations or to comply with applicable laws or regulations.
If NewGenIvf loses its relationship with
one or more key pharmaceutical manufacturers, its business and results of operations could be adversely affected.
NewGenIvf maintains contractual
relationships with select pharmaceutical manufacturers in Thailand, Cambodia and Kyrgyzstan. The consolidation of pharmaceutical manufacturers,
the shortages of drugs provided by such manufacturers, the termination or material alteration of its contractual relationships, or its
failure to renew such contracts could have a material adverse effect on its business and results of operations. Adoption of new laws,
rules or regulations or changes in, or new interpretations of, existing laws, rules or regulations, relating to any of these programs
could materially adversely affect its business and results of operations.
NewGenIvf has engaged in transactions with
related parties, and such transactions present potential conflicts of interest that could have an adverse effect on its business and results
of operations.
NewGenIvf has entered into
a number of transactions with related parties. NewGenIvf may in the future enter into additional transactions with its related parties.
Interests of these related parties may not necessarily be aligned with NewGenIvf’s or The Company’s interests and the interests
of its other shareholders. For example, conflicts of interest may arise in connection with decisions regarding the transaction arrangements
which may be less favorable to NewGenIvf than similar arrangements negotiated with unaffiliated third parties. Conflicts of interest may
also arise in connection with the exercise of contractual remedies, such as the treatment of events of default. As a result, those related
party transactions, individually or in the aggregate, may have an adverse effect on NewGenIvf’s business and results of operations.
NewGenIvf may be subject to claims and allegations
relating to intellectual property and other causes.
NewGenIvf may from time to
time receive claims that NewGenIvf infringes on the intellectual property rights of others. Moreover, NewGenIvf may be subject to claims
by third parties who maintain that NewGenIvf’s service providers’ technology infringes third-party’s intellectual property
rights. If NewGenIvf fails to successfully defend against such claim or does not prevail in such litigation, it could be required to modify,
redesign or cease operating, pay monetary amounts as damages or enter into royalty or licensing arrangements with the valid intellectual
property holders. Any royalty or licensing arrangements that NewGenIvf may seek in such circumstances may not be available to it on commercially
reasonable terms or at all. Also, if NewGenIvf acquires technology licenses from third parties, NewGenIvf’s exposure to infringement
actions may increase because NewGenIvf must rely upon these third parties to verify the origin and ownership of such technology. This
exposure to liability could result in disruptions in NewGenIvf’s business that could materially and adversely affect NewGenIvf’s
results of operations.
Some of NewGenIvf’s
employees may previously employed at other companies, including NewGenIvf’s competitors. NewGenIvf may hire additional personnel
to expand its development team and technical support team as its business grows. To the extent these employees were involved in the development
of content or technology similar to NewGenIvf’s at their former employers, NewGenIvf may become subject to claims that these employees
or NewGenIvf has appropriated these employees’ former employers’ proprietary information or intellectual properties. If NewGenIvf
fails to successfully defend such claims against itself, NewGenIvf may be exposed to liabilities which could have a material adverse effect
on its business.
NewGenIvf is currently not
a party to any material legal or administrative proceedings but may subject to legal or administrative actions for defamation, negligence,
copyright and trademark infringement, unfair competition, breach of service terms, or other purported injuries resulting from the content
NewGenIvf provides or the nature of NewGenIvf’s services. Such legal and administrative actions, with or without merits, may be
expensive and time-consuming and may result in significant diversion of resources and management attention from NewGenIvf’s business
operations. Furthermore, such legal or administrative actions may adversely affect NewGenIvf’s brand image and reputation.
Certain data and information in this prospectus
relied on by NewGenIvf were obtained from third-party data and polls. These metrics were not independently verified by NewGenIvf and may
not be accurate.
Certain numbers and information
in this prospectus were obtained and provided from numerous sources including management data, third-party data or numbers generally estimated
by calculating infertile couples, fertility tourism number, etc. to generally assess potential customer numbers in Asia-Pacific countries.
These metrics were not independently
verified. Such databases, third-party information, and calculations may not accurately reflect actual statistics or numbers and NewGenIvf
does not have access to specific rating numbers. Similarly, any statistical data in any third-party publications also include projections
based on a number of assumptions. If any one or more of the assumptions underlying the market data is later found to be incorrect, actual
results may differ from the projections based on these assumptions.
Risks Related to Government Regulation
NewGenIvf operates in a highly regulated
industry and must comply with a significant number of complex and evolving requirements. Any lack of requisite approvals, licenses, or
permits applicable to NewGenIvf’s business may have a material and adverse impact on NewGenIvf’s business, financial condition,
and results of operations.
The operations of NewGenIvf
are subject to various laws, rules and regulations at the national, regional and local levels in Thailand, Cambodia, Kyrgyzstan and other
applicable jurisdictions. Such laws and regulations mainly relate to (i) the licensing of local and foreign medical professionals,
nursing professionals, medical technology professionals, pharmaceutical professions and other applicable licensing; (ii) the licensing,
registration, and accreditation of medical facilities, laboratories, including but not limited to the licensing, registration, and accreditation
of persons performing related activities; (iii) the privacy and security of confidential patient medical records; (iv) the corporate
practice of medicine; (v) healthcare fraud and abuse laws; (vi) the donation and transplantation of human cells, tissues and
organs; (vii) potential prohibition on surrogacy or providing intermediary assistance in surrogacy; and (viii) licensing and
approval of the accommodation provided as parts of the services.
NewGenIvf has attempted to
structure its operations to comply with laws, regulations and other requirements applicable to it directly and to its clients and vendors,
but there can be no assurance that its operations will not be challenged or impacted by regulatory authorities or enforcement initiatives,
or that the relevant authorities in each jurisdiction could impose higher standards or requirements, which NewGenIvf may have difficulty
to adhere to, e.g. Medical Facilities Act B.E. 2541 (1998) and Protection of a Child Born by Medically Assisted Reproductive Technology
Act B.E. 2558 (2015) for Thailand jurisdiction, Law on Reproduction Rights and on Guarantees of Their Realization of July 4,
2015 No. 148, Law on status of medical worker of May 28, 2013 No. 81 and Temporary Regulation on Procedure of Licensing Private Medical
Activity approved by the resolution of government of April 4, 2017 No. 203 for Kyrgyz Republic. NewGenIvf in the future may become
involved in governmental investigations, audits, reviews and assessments. Any determination by a court or agency that NewGenIvf’s
solutions or services violate, or cause its clients to violate, applicable laws, regulations or other requirements could subject it or
its clients to civil, criminal, or administrative penalties. Such a determination also could require it to change or terminate portions
of its business, disqualify it from serving clients that do business with government entities, or cause it to refund some or all of its
service fees or otherwise compensate its clients. In addition, failure to satisfy laws, regulations or other requirements could adversely
affect demand for its solutions and could force it to expend significant capital, research and development and other resources to address
the failure. Even an unsuccessful challenge by regulatory and other authorities or parties could be expensive and time-consuming, could
result in loss of business, exposure to adverse publicity, and injury to its reputation and could adversely affect its ability to retain
and attract clients. If NewGenIvf fails to comply with applicable laws, regulations and other requirements, its business, financial condition
and results of operations could be adversely affected. Such non-compliance could also require significant investment to address and may
prove costly. There are several additional state statutes, regulations, guidance and contractual provisions related to or impacting the
healthcare industry that may apply to its business activities directly or indirectly, including, but not limited to:
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Licensing and Licensed Personnel. Many countries have licensure or registration requirements for entities acting as a medical services provider. The scope of these laws differs from country to country, and the application of such laws to the activities of fertility treatment is often unclear. Given the nature and scope of the solutions and services that NewGenIvf provides, it is required to maintain the License to Operate Medical Facility Business (Sor.Por.7), the License to Manage Medical Facility Business (Sor.Por.19), License to Certify the Standard of Service relating to Medically Assisted Reproductive Technology (KorThorPhor.9), and personnel licenses, i.e., license of medical professionals, nursing professionals, medical technology professionals, pharmaceutical professions and other applicable licenses in Thailand, Approval on Opening of Medical Clinic, Approval on Opening of Pharmacy and relevant approvals to conduct IVF, embryo implant and/or transfer activities issued by the Ministry of Health of Cambodia (“Cambodia MOH”) in Cambodia and licenses to carry out private medical activities (including diagnostics and treatment gynecological diseases, supervision of pregnant women before childbirth, IVF in outpatient and day hospital conditions (for four (4) beds)) in Kyrgyzstan, respectively, and to ensure that such licenses and registrations are in good standing on an annual basis. NewGenIvf is licensed, has licensure applications pending before appropriate regulatory bodies, is exempt from licensure or registration, or is otherwise authorized under such laws in those countries in which it provides its services. These licenses require it to comply with the rules and regulations of the governmental bodies that issued such licenses. NewGenIvf’s failure to comply with such rules and regulations could result in criminal and/ or administrative penalties, the suspension of a license, or the loss of a license, all of which could negatively impact its business. First Fertility PGS had provided arrangements of accommodation without additional charges for its patients without a tourism license in Thailand, all of which was subsequently ceased in early 2023. Pursuant to the Tourism Business and Guide Act 2551 (2008) of Thailand, a maximum fine of THB500,000 may be imposed on First Fertility PGS as a result of the above activity without a tourism license in Thailand. NewGenIvf is unable to predict, however, how its services may be viewed by regulators over time, how these laws and regulations will be interpreted, or the full extent of their applicable. If a regulatory authority in any country determines that the nature of its business requires that NewGenIvf be licensed under applicable laws, it may need to restructure its business or it may need to comply with any related requirements, such as obtaining relevant license, paying additional regulatory fees and/or penalties for previous non-compliance with relevant licensing requirements, which could adversely affect its results of operation. Additionally, in extreme case, NewGenIvf may need to cease operations until it is able to obtain appropriate licensure, which may adversely affect its revenue for a period of time that it cannot estimate. |
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Patients’ Right Protection. There has been an increased awareness of patients’ rights in Thailand, Cambodia and Kyrgyzstan, especially with the issuance of the Constitution of the Kingdom of Thailand, the Act on Court Proceedings for Consumer Cases B.E. 2551 (2008) (as amended), National Health Act B.E. 2550 (2007), and other applicable laws in Thailand, the Civil Code dated December 8, 2017 as amended by the Law on Implementation of the Civil Code dated May 31, 2011, Law on Management of Donation and Transplantation of Human Cells, Tissues, and Organs (2016) and Sub-Decree No. 61 on the Code of Medical Ethics (2003) in Cambodia and Constitution of Kyrgyzstan of May 5, 2021, Civil Code, Part I of May 8, 1996 No. 15, Law on Health Protection of Civilians of Kyrgyzstan of January 9, 2005 No. 6, Law on Reproduction Rights and on Guarantees of their Realization of July 4, 2015 No. 148, Law on status of medical worker of May 28, 2013 No. 81 and other relevant applicable laws in Kyrgyzstan, which enables consumers and patients to file suits more easily against healthcare service providers. Furthermore, treatment of more complex medical conditions has no guaranteed positive outcome, which subjects it to an increased likelihood of medical malpractice suits. Such lawsuits could result in hefty compensation payments or damage to NewGenIvf’s reputation, which may have a material adverse effect on its business, financial condition, results of operations and prospects. |
Meanwhile, Thailand is considering enacting
a Patient Protection Bill (the “Bill”). The Bill, if issued, is intended to alleviate disputes between patients and
healthcare providers, which have an impact on the healthcare system in Thailand as a whole. The compensation outlined in the Bill will
assist patients in claiming damages, thereby fostering a positive relationship between patients and healthcare providers. Consequently,
the rate of disputes is expected to decrease. The provisions under the Bill would require healthcare providers to compensate patients
in a timely manner, sometimes without requiring proof of wrongdoing. The Bill also contemplates setting up a patient protection fund for
damages to patients pursuant to which healthcare providers have to make mandatory contributions according to the rules determined by a
patient protection committee. Failure by it to comply with applicable rules and regulations could result in penalties, the loss of regulatory
permits and damage to NewGenIvf’s business reputation, each of which could have a material adverse effect on its financial condition
and results of operations.
Furthermore, the Protection of A Child
Born By Medically Assisted Reproductive Technology Act B.E. 2558 (2015) of Thailand was promulgated with the intention to appropriately
designate the legitimate parenthood status of a child born using medically assisted reproductive technology and regulate any medical scientific
research on embryology and medically assisted reproductive technologies to prevent the misuse of medically assisted reproductive technologies.
NewGenIvf is therefore under the supervision of a Committee of the Protection for Children Born through Medically Assisted Reproductive
Technology, which is a committee established to control, inspect, supervise and formulate various policies relating to such acts. In Cambodia
and Kyrgyzstan, all health establishments, including private medical clinics, are under the supervision of the Cambodia MOH and the Ministry
of Health of Kyrgyzstan, respectively, which each governs and regulates the operation of medical clinics and activities of medical practitioners
in respective countries. In particular, the Medical Council of Cambodia, Cambodian Council of Nurses, Cambodian Midwives Council and the
Pharmaceutical Council of Cambodia, all assist the Cambodia MOH to supervise and monitor the practice of health professionals in Cambodia.
IVF/embryo implant/transfer activities are subject to an approval by the Cambodia MOH.
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Privacy and Security Requirements. There are numerous laws and regulations related to the privacy and security of health information in each country. In particular, regulations promulgated pursuant to the Personal Data Protection Act B.E. 2562 (2019) of Thailand (“PDPA”), Law on Data of Personal Character of April 14, 2008 No. 58 of Kyrgyzstan (“Data Protection Law”), as well as Regulation of Registration of Personal Data Holders (Owners) approved by the Resolution of the Cabinet of Ministers of KR of November 18, 2022, Offences Code No. 128 of October 28, 2021 of Kyrgyzstan establish privacy and security standards in each country that limit the collection, use, and/ or disclosure of certain individually identifiable health information, whether directly or indirectly (excluding the information of the deceased person) and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information. The privacy regulations established under the PDPA and Data Protection Law also provide patients with rights related to understanding and controlling how their protected health information is collected, used and/ or disclosed. As a provider of services to entities subject to the PDPA and Data Protection Law, NewGenIvf is directly subject to certain provisions of the regulations. To the extent permitted by applicable privacy regulations and contracts with its clients, NewGenIvf is permitted to use and disclose protected health information to perform its services and for other limited purposes, but other uses and disclosures, such as marketing communications, require written authorization from the patient or must meet an exception specified under the privacy regulations. |
NewGenIvf also has downstream entities
which provide it with services and are also subject to applicable regulations. If NewGenIvf or any of its downstream entities are unable
to properly protect the privacy and security of protected health information entrusted to it, it could be found to have breached its contracts
with its clients and be subject to investigation by the relevant supervision institution, i.e., the Office of the Personal Data Protection
Committee of Thailand (the Government Authority under the PDPA), the Cambodia MOH and the State Data Protection Agency under the Cabinet
of Ministers of Kyrgyzstan (the “Agency”). In the event the Office of the Personal Data Protection Committee or the Agency
finds that NewGenIvf has failed to comply with applicable privacy and security standards, it could face civil, criminal, and/ or administrative
penalties. In addition, the Office of the Personal Data Protection Committee performs compliance audits in order to proactively enforce
the privacy and security standards. The Office of the Personal Data Protection Committee has become an increasingly active regulator and
has signaled its intention to continue this trend. The Office of the Personal Data Protection Committee has the discretion to impose penalties
and may require companies to enter into resolution agreements and corrective action plans which impose ongoing compliance requirements.
The Office of the Personal Data Protection Committee’s enforcement activity, or audit related to incident regarding it or its downstream
entity, can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal
resources. Although NewGenIvf has implemented and maintain policies, processes and compliance program infrastructure to assist it in complying
with these laws and regulations and its contractual obligations, NewGenIvf cannot provide assurance regarding how these laws and regulations
will be interpreted, enforced or applied to its operations. In associated with enforcement activities and potential contractual liabilities,
its ongoing efforts to comply with evolving laws and regulations might also require it to make costly system purchases and/or modifications
or otherwise divert significant resources to compliance initiatives from time to time.
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Other Privacy and Security Requirements. In addition, numerous other laws govern the collection, dissemination, use, access to and confidentiality of personal information. For example, the Law on E-Commerce of Cambodia (2019) places an obligation on those who electronically store private information to use all means to ensure that the information is protected by security safeguards in every reasonable circumstance to avoid the loss, access, use, modification, leakage, or disclosure of the information, except with the consent of the data owner or other lawfully authorized party. The Law on E-Commerce also prohibits individuals from dishonestly accessing, downloading, copying, extracting, leaking, deleting, modifying, or otherwise interfering with data stored by other persons. Applicable laws are contributing to increased enforcement activity and may also be subject to interpretation by various courts and other governmental authorities. |
Certain of NewGenIvf’s solutions
and services involve the transmission and storage of client data in various jurisdictions, which subjects the operation of those solutions
and services to privacy or data protection laws and regulations in those jurisdictions. While NewGenIvf believes those solutions and services
comply with current regulatory and security requirements in the jurisdictions in which it provides these solutions and services, there
can be no assurance that such requirements will not change or that it will not otherwise be subject to legal or regulatory actions. The
laws and regulations are rapidly evolving and changing, and could have an adverse impact on its operations. These laws and regulations
are subject to uncertainty in how they may be interpreted and enforced by government authorities and regulators. The costs of compliance
with, and the other burdens imposed by, these and other laws or regulatory actions may increase its operational costs, prevent it from
providing its solutions, and/or impact its ability to invest in or jointly develop its solutions. NewGenIvf also may face audits or investigations
by one or more government agencies relating to its compliance with these laws and regulations.
An adverse outcome under any such investigation
or audit could result in fines, penalties, other liability, or could result in adverse publicity or a loss of reputation, and adversely
affect NewGenIvf’s business. Any failure or perceived failure by it or by NewGenIvf’s solutions to comply with these laws
and regulations may subject it to legal or regulatory actions, damage its reputation or adversely affect its ability to provide its solutions
in the jurisdiction that has enacted the applicable law or regulation. Moreover, if these laws and regulations change, or are interpreted
and applied in a manner that is inconsistent with its policies and processes or the operation of its solutions NewGenIvf may need to expend
resources in order to change its business operations, policies and processes or the manner in which it provides its solutions. This could
adversely affect NewGenIvf’s business, financial condition and results of operations.
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Data Protection and Breaches. In recent years, there have been a number of well-publicized data breaches involving the improper dissemination of personal information of individuals both within and outside of the healthcare industry. Pursuant to the applicable data protection law of Thailand, the PDPA requires businesses to notify the data subjects and/or the government authorities upon the occurrence of a data breach. The laws are not consistent, and compliance in the event of a widespread data breach is costly. Each country also constantly amending existing laws, requiring attention to frequently changing regulatory requirements. Most countries require holders of personal information to maintain safeguards and take certain actions in response to a data breach, such as providing prompt notification of the breach to affected individuals. In some countries, these laws are limited to electronic data, but they increasingly are enacting or considering stricter and broader requirements. |
Despite NewGenIvf’s security management
efforts with respect to physical and technological safeguards, employee training, vendor (and sub-vendor) controls and contractual relationships,
its infrastructure, data or other operation centers and systems used in its business operations, including the internet and related systems
of its vendors (including vendors to whom NewGenIvf outsources data hosting, storage and processing functions) are vulnerable to, and
may from time to time experience, unauthorized access to data and/or breaches of confidential information due to a variety of causes.
Techniques used to obtain unauthorized access to or compromise systems change frequently, are becoming increasingly sophisticated and
complex, and are often not detected until after an incident has occurred. As a result, NewGenIvf might not be able to anticipate these
techniques, implement adequate preventive measures, or immediately detect a potential compromise. If its security measures, some of which
are managed by third parties, or the security measures of its service providers or vendors, are breached or fail, it is possible that
unauthorized or illegal access to or acquisition, disclosure, use or processing of personal information, confidential information, or
other sensitive client or employee data, including protected health information, may occur. A security breach or failure could result
from a variety of circumstances and events, including third-party action, human negligence or error, malfeasance, employee theft or misuse,
phishing and other social engineering schemes, computer viruses, attacks by computer hackers, failures during the process of upgrading
or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, and catastrophic
events. If NewGenIvf’s security measures, or those of its service providers or vendors, were to be breached or fail, its reputation
could be severely damaged, adversely affecting client or investor confidence. As a result, clients may curtail their use of or stop using
its offering and its business may suffer. In addition, NewGenIvf could face litigation, damages for contract breach, penalties and regulatory
actions for violation of laws or regulations applicable to data protection and significant costs for remediation and for measures to prevent
future occurrences. In addition, any potential security breach could result in increased costs associated with liability for stolen assets
or information, repairing system damage that may have been caused by such breaches, incentives offered to clients or other business partners
in an effort to maintain the business relationships after a breach and implementing measures to prevent future occurrences, including
organizational changes, deploying additional personnel and protection technologies, training employees and engaging third-party experts
and consultants. Negative publicity may also result from real, threatened or perceived security breaches affecting it or its industry
or clients, which could cause it to lose clients or partners and adversely affect its operations and future prospects. NewGenIvf may not
carry insurance or maintain coverage sufficient to compensate for all liability and such insurance may not be available for renewal on
acceptable terms or at all, and in any event, insurance coverage would not address the reputational damage that could result from a security
incident.
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Fraud and Abuse Laws. NewGenIvf may be impacted directly and indirectly by certain fraud and abuse laws, including the Act Supplementing the Constitution Relating to the Prevention and Suppression of Corruption B.E. 2561 (2018) of Thailand, the Penal Code of Thailand, the Criminal Code of Cambodia, the Offences Code of October 28, 2021 No. 128 of Kyrgyzstan, the Criminal Code of October 28, 2021, No. 17 of Kyrgyzstan and the Law on prevention of corruption of August 8, 2021 No. 153 of Kyrgyzstan. Because the solutions and services NewGenIvf provides are not reimbursed by government healthcare payors, such fraud and abuse laws generally do not directly apply to its business, however, some laws may be applicable. The laws, regulations and other requirements in this area are both broad and vague and judicial interpretation can also be inconsistent. NewGenIvf reviews its practices with regulatory experts in an effort to comply with all applicable laws, regulatory and other requirements. However, NewGenIvf is unable to predict how these laws, regulations and other requirements will be interpreted or the full extent of their application, particularly to services that are not directly reimbursed by healthcare programs. Any determination by a regulatory authority that any of NewGenIvf’s activities or those of its clients or vendors violate any of these laws or regulations could subject NewGenIvf to civil or criminal penalties, require it to enter into corporate integrity agreements or similar agreements with ongoing compliance obligations, disqualify it from providing services to clients and/or have an adverse impact on its business, financial condition and results of operations. Even an unsuccessful challenge by a regulatory authority of NewGenIvf’s activities could result in adverse publicity and could require a costly response from it. |
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Consumer Protection Laws. Consumer protection laws are being applied increasingly by the Office of the Consumer Protection Board in Thailand and by the Cambodia Ministry of Health to regulate the collection, use, storage and disclosure of personal or health information, through websites or otherwise, and, in Cambodia, by the Consumer Protection Competition and Fraud Repression Directorate-General, to regulate the presentation of website content. Courts may also adopt the standards for fair information practices, which concern consumer notice, choice, security and access. |
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Restrictions on Communication. Communications with NewGenIvf’s clients increasingly may be subject to and restricted by laws and regulations governing communications via telephone, fax, text, and email. NewGenIvf also uses email and social media platforms as marketing tools. For example, NewGenIvf maintains social media accounts. As laws and regulations rapidly evolve to govern the use of these platforms and devices, the failure by it, its employees or third parties acting at its direction to abide by applicable laws and regulations in the use of these platforms and devices could adversely impact its business, financial condition and results of operations or subject it to fines or other penalties. |
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Advertisement Laws. NewGenIvf’s advertisement and announcements, in particular, the messages releasing on the Internet related to medical facilities may subject to the laws and regulations of relevant jurisdictions (and potential prohibition in Cambodia on commercial advertisement of private medical services). |
For example, in Thailand, NewGenIvf
shall apply for and obtain the approval and/ or pre-approval from the relevant authority for the images, and text used in advertisements
or announcements which shall be in accordance with the Medical Facility Act B.E. 2541 (1998) (and its amendments) and the Notification
of the Department of Health Services Support on Rules, Procedures, Conditions, and Costs of Advertisements or Announcements of Healthcare
Facilities B.E. 2562 (2019) (and its amendments) and the Operational Manual for Approval of Advertisements or Announcements relating
to Healthcare Facilities. If such approval was not obtained by NewGenIvf, it could lead to significant liabilities and consequences, which
could adversely impact NewGenIvf’s business, financial condition and results of operations or subject its sales and marketing director
to personal liabilities.
For Cambodia, Prakas 028 on Advertisement
of Private Medical, Paramedical and Medical Aid Practices dated August 23, 2004 issued by the Cambodia MOH prohibits commercial advertising
of private medical services. Advertisement of private health care services is only allowed for any advertisements within the professional
framework not affecting the ethics of private medical services and such advertisement requires a permit from the Cambodia MOH. In
addition, the Royal Government of Cambodia has recently issued Sub-Decree 232 on the Management of Commercial Advertisements of Goods
and Services on November 4, 2022 to provide the legal framework for the management of commercial advertising of goods and services
for all types, forms and means in Cambodia. In light of this Sub-Decree, in addition to the permit requirement of the Cambodia MOH, a
person wishing to advertise their goods and/or services in Cambodia may also apply for a compliance certificate from the Ministry of Commerce,
which certifies that advertising text or content complies with the Law on Consumer Protection or other applicable regulations.
For Kyrgyzstan, the Law on Advertisements
of December 24, 1998, No. 155 requires that if the activities of the advertiser subject to licensing, the advertisement of such advertiser
must include the license number and the name of the authority that issued the license, except for radio advertising, where it is sufficient
to state “licensed activity” on the territory of Kyrgyzstan. In advertising goods (including works and services), and other
objects of advertising, cost indicators must be stated in the national currency. There are also other requirements established in relation
to size, frequency, cost and other features of advertisements via different types of media.
New laws and regulations
relevant to the fertility services may be introduced in the future, or the current applicable regulations may otherwise be amended or
replaced requiring the assisted reproductive medical facilities in its network to conduct business with additional oversight and regulatory
compliance. If NewGenIvf fails to obtain the necessary licenses, permits and approvals, NewGenIvf may be subject to fines, confiscation
of revenues generated from incompliance operations, or the suspension of relevant operations. NewGenIvf may also experience adverse publicity
arising from such non-compliance with government regulations that negatively impacts its brand. NewGenIvf may experience difficulties
or failures in obtaining the necessary approvals, licenses, and permits for new spaces or new service offerings. If NewGenIvf fails to
obtain the material licenses, NewGenIvf’s business activities could be severely delayed. In addition, there can be no assurance
that NewGenIvf will be able to obtain, renew, and/or convert all of the approvals, licenses, and permits required for its existing business
operations upon their expiration in a timely manner, in a cost-efficient manner or at all, which could adversely affect NewGenIvf’s
business operations and financial condition.
In addition, considerable
uncertainties exist in relation to the interpretation and implementation of existing and future laws and regulations governing NewGenIvf’s
business activities. NewGenIvf could be found not in compliance with any future laws and regulations or of the laws and regulations currently
in effect due to changes in the relevant authorities’ interpretation of those laws and regulations. It is possible that different
interpretations or enforcement of these regulations could subject the current or past practices to allegations of impropriety or illegality
or require the medical facilities in its network to implement changes in the facilities, equipment, personnel or services, or increase
capital expenditure and operating expenses. If NewGenIvf fails to complete, obtain, or maintain any of the required licenses or approvals
or make the necessary filings, NewGenIvf may be subject to various penalties, such as confiscation of unlawful gains, the imposition of
fines, revocation of licenses, and the discontinuation or restriction of NewGenIvf’s operations. Any such penalties or changes in
policies, regulations, or enforcement by government authorities may disrupt NewGenIvf’s operations and materially and adversely
affect NewGenIvf’s business, financial condition, and results of operations.
Legal or regulatory restriction, government
regulation, industry standards and other requirements create risks and challenges with respect to NewGenIvf’s compliance efforts
and its business strategies and could adversely impact NewGenIvf’s business and limited the growth of NewGenIvf’s operations.
The healthcare industry is
highly regulated and subject to frequently changing laws, regulations, industry standards and other requirements. Many healthcare laws
and regulations are complex, and their application to specific solutions, services and relationships may not be clear. In particular,
many existing healthcare laws and regulations, when enacted, did not anticipate the solutions and services that NewGenIvf provides, and
these laws and regulations may be applied to its solutions and services in ways that NewGenIvf does not anticipate. Efforts to reform
or revise aspects of the healthcare industry or to revise or create additional legal or and regulatory requirements could impact its operations,
the use of its solutions and services, and its ability to market new solutions and services, or could create unexpected liabilities for
it. NewGenIvf also may be impacted by laws, industry standards and other requirements that are not specific to the healthcare industry,
such as consumer protection laws and payment card industry standards. These requirements may impact its operations and, if not followed,
could result in fines, penalties and other liabilities and adverse publicity and injury to its reputation.
There is a risk that existing
or future laws may be interpreted in a manner that is not consistent with the healthcare industry’s current practices and could
have an adverse effect on NewGenIvf’s business, financial condition, results of operations and growth prospects.
Any litigation against NewGenIvf could be
costly and time-consuming to defend and could harm its business, financial condition and results of operations.
NewGenIvf has in the past
and may in the future become subject to regulatory actions, litigation, disputes, or claims of various types, legal proceedings and claims
that arise in the ordinary course of business, such as claims brought by its clients or vendors in connection with commercial disputes
or employment claims made by its current or former employees, as well as claims brought by relevant regulatory authorities or NewGenIvf’s
competitors, patients, employees, or other third parties against NewGenIvf. NewGenIvf is unable to predict the outcome of any of these
legal proceedings. Such regulatory actions, disputes, allegations, complaints, or legal proceedings may damage NewGenIvf’s reputation,
evolve into litigation, or otherwise have a material adverse impact on NewGenIvf’s reputation and business. Such proceedings might
result in substantial costs, regardless of the outcome, and may significantly divert management’s attention and resources from operating
NewGenIvf’s business, which might seriously harm its business, financial condition and results of operations. Insurance might not
cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not continue
to be available on terms acceptable to it. A claim brought against it that is uninsured or underinsured could result in unanticipated
costs, potentially harming its business, financial condition and results of operations. The outcomes of actions NewGenIvf institutes may
not be successful or favorable to NewGenIvf. Lawsuits against NewGenIvf may also generate negative publicity that significantly harms
NewGenIvf’s reputation, which may adversely affect NewGenIvf’s client base. NewGenIvf may also need to pay damages or settle
lawsuits with a substantial amount of cash.
Acquisitions, strategic investments, partnerships,
or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt NewGenIvf’s
business, dilute stockholder value, and adversely affect its business, financial condition and results of operations.
NewGenIvf may in the future
seek to acquire or invest in businesses, joint ventures, products and services, or technologies that it believes could complement or expand
its platform, enhance its technical capabilities, or otherwise offer growth opportunities. Any such acquisition or investment may divert
the attention of management and cause NewGenIvf to incur various expenses in identifying, investigating and pursuing suitable opportunities,
whether or not the transactions are completed, and may result in unforeseen operating difficulties and expenditures. In particular, NewGenIvf
may encounter difficulties assimilating or integrating the businesses, technologies, products and services, personnel or operations of
the acquired companies, particularly if the key personnel of the acquired company choose not to work for it, they are operationally difficult
to integrate, or NewGenIvf has difficulty retaining the clients of any acquired business due to changes in ownership, management or otherwise.
These transactions may also disrupt its business, divert its resources, and require significant management attention that would otherwise
be available for development of its existing business and may not benefit NewGenIvf’s business strategy, may not generate sufficient
revenues to offset the associated acquisition costs or may not otherwise result in the intended benefits. Any such transactions that NewGenIvf
is able to complete may not result in any synergies or other benefits it had expected to achieve, which could result in impairment charges
that could be substantial. In addition, NewGenIvf may not be able to find and identify desirable acquisition targets or business opportunities
or be successful in entering into an agreement with any particular strategic partner. These transactions could also result in dilutive
issuances of equity securities or the incurrence of debt, which could adversely affect its results of operations. In addition, if the
resulting business from such a transaction fails to meet NewGenIvf’s expectations, or it fails to successfully integrate such businesses
into its own, its business, financial condition and results of operations may be adversely affected or it may be exposed to unknown risks
or liabilities. Even when NewGenIvf identifies an appropriate acquisition or investment target, it may not be able to negotiate the terms
of the acquisition or investment successfully, obtain financing for the proposed transaction, or integrate the relevant businesses into
its existing business and operations. Strategic investments or acquisitions will involve risks commonly encountered in business relationships,
including:
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difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; |
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inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; |
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difficulties in retaining, training, motivating and integrating key personnel; |
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diversion of management’s time and resources from NewGenIvf’s normal daily operations; |
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difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations; |
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difficulties in retaining relationships with customers, employees and suppliers of the acquired business; |
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risks of entering markets in which NewGenIvf have limited or no prior experience; |
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regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; |
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assumption of contractual obligations that contain terms that are not beneficial to NewGenIvf, require it to license or waive intellectual property rights or increase its risk for liability; |
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failure to further successfully develop the acquired technology; |
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liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; |
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potential disruptions to NewGenIvf’s ongoing businesses; and |
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unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions. |
Even if the transaction is
consummated, NewGenIvf may only have limited control over the companies in which it only has minority stake, it cannot ensure that these
companies will always comply with applicable laws and regulations in their business operations. Non-compliance of regulatory requirements
by NewGenIvf’s investees may cause substantial harm to NewGenIvf’s reputations and the value of NewGenIvf’s investment.
In addition, if the resulting business from such a transaction fails to meet NewGenIvf’s expectations, or it fails to successfully
integrate such businesses into its own, its business, financial condition and results of operations may be adversely affected or it may
be exposed to unknown risks or liabilities. If NewGenIvf is unable to effectively address these challenges, its ability to execute acquisitions
as a component of its long-term strategy will be impaired, which could have an adverse effect on its growth. As a result of the above,
NewGenIvf’s strategies may not be successfully implemented beyond the current markets.
Any investment might not
achieve the synergies, operational or financial benefits it expects and may adversely impact NewGenIvf’s operating results. In addition,
NewGenIvf cannot assure you that any future investment in or acquisition of new businesses or technology will lead to the successful development
of new or enhanced products and services or that any new or enhanced products and services, if developed, will achieve market acceptance,
or prove to be profitable.
Changes in NewGenIvf’s effective tax
rate or tax liability may have an adverse effect on its results of operations.
NewGenIvf’s effective
tax rate could increase due to several factors, including, but not limited to:
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changes in the relative amounts of income before taxes in the various jurisdictions in which NewGenIvf operates that have differing statutory tax rates; |
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changes in tax laws, tax treaties, and regulations or the interpretation of them; |
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changes to its assessment about its ability to realize its deferred tax assets that are based on estimates of its future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which NewGenIvf does business; |
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the outcome of future tax audits, examinations, or administrative appeals; and |
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limitations or adverse findings regarding its ability to do business in some jurisdictions. |
Any of these developments
could have an adverse effect on its results of operations.
NewGenIvf’s reported financial results
may be adversely affected by changes in accounting principles generally accepted in relevant jurisdictions.
Accounting principles generally
accepted in Thailand, Cambodia and Kyrgyzstan are subject to interpretation by the relevant supervision institutions, and various bodies
formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant
effect on NewGenIvf’s reported results of operations and could affect the reporting of transactions already completed before the
announcement of a change. The adoption of new or revised accounting principles may require it to make changes to its systems, processes
and control, which could have a significant effect on its reported financial results, cause unexpected financial reporting fluctuations,
retroactively affect previously reported results or require it to make costly changes to its operational processes and accounting systems
upon or following the adoption of these standards.
If NewGenIvf’s estimates or judgments
relating to its critical accounting policies prove to be incorrect, its results of operations could be adversely affected.
The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in
NewGenIvf’s consolidated financial statements and accompanying notes appearing elsewhere in this prospectus. NewGenIvf bases its
estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, as provided
in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of NewGenIvf — Critical
Accounting Policies, Judgments and Estimates.” The results of these estimates form the basis for making judgments about the
carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources.
Significant estimates and judgments used in preparing NewGenIvf’s consolidated financial statements include those related to the
determination of fair value of its Class A Ordinary Shares and Warrants and revenue recognition relating to services rendered but for
which no claim has yet been reported, among other things. NewGenIvf’s results of operations may be adversely affected if its assumptions
change or if actual circumstances differ from those in its assumptions, which could cause its results of operations to fall below the
expectations of securities analysts and investors, resulting in a decline in the market price of its Class A Ordinary Shares and Warrants.
NewGenIvf is subject to anti-corruption,
anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject it to criminal or civil liability
and harm its business, financial condition and results of operations.
NewGenIvf is subject to the
Anti-Money Laundering Act B.E. 2542 (1999) of Thailand, the Act Supplementing the Constitution Relating to the Prevention and Suppression
of Corruption B.E. 2561 (2018) of Thailand, and the Penal Code of Thailand, domestic bribery laws, and other anticorruption and anti-money
laundering laws in the countries in which it conducts activities. Anti-corruption and anti-bribery laws have been enforced aggressively
in recent years and are interpreted broadly to generally prohibit companies, their employees and their third-party intermediaries
from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private
sector. If NewGenIvf expands its business and sales and to the public sector, it may engage with business partners and third-party intermediaries
to market its services and to obtain for it the necessary permits, licenses, and other regulatory approvals. In addition, NewGenIvf or
its third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned
or affiliated entities. NewGenIvf can be held liable for the corrupt or other illegal activities of these third-party intermediaries,
its employees, representatives, contractors, partners and agents, even if it does not explicitly authorize such activities. Detecting,
investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources,
and attention from senior management. In addition, noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could
subject it to whistleblower complaints, investigations, prosecution, enforcement actions, sanctions, settlements, fines, damages, other
civil or criminal penalties or injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse
media coverage, and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions
are imposed, or if NewGenIvf does not prevail in any possible civil or criminal proceeding, its business, financial condition and results
of operations could be harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s
attention and resources and significant defense costs and other professional fees, which could adversely affect its business, financial
condition and results of operations.
For more information about
our SEC filings, please see “Where You Can Find More Information” and “Incorporation by Reference.”
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements made
under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis
of Financial Condition and Results of Operations,” “Business” and elsewhere in this prospectus constitute
forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential” “intends” or “continue,” or the negative of these terms or other
comparable terminology.
These forward-looking statements
may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections
of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development,
completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or
developments that we intend, expect, project, believe or anticipate will or may occur in the future.
Forward-looking statements
are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on
assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions,
expected future developments and other factors they believe to be appropriate.
Important factors that could
cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements
include, among other things:
| ● | our planned level of revenues
and capital expenditures; |
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our ability to market and sell our products and services; |
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our plans to continue to invest in research and development to develop technology for both existing and new products; |
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our ability to maintain our relationships with suppliers, manufacturers and other partners; |
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our ability to maintain or protect the validity of our intellectual property and know-how; |
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our ability to retain key executive members; |
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our ability to internally develop and protect new inventions and intellectual property; |
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our ability to expose and educate the industry about the use of our services and products; |
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our expectations regarding our tax classifications; |
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interpretations of current laws and the passages of future laws; and |
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the impact of the coronavirus (COVID-19) pandemic and resulting government actions on us, our manufacturers, suppliers and facilities. |
These statements are only
current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s
actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking
statements. We discuss many of these risks in this prospectus in greater detail under the heading “Risk Factors” and
elsewhere in this prospectus. You should not rely upon forward-looking statements as predictions of future events.
Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as
a result of new information, future events or otherwise, after the date of this prospectus.
LISTING DETAILS
Our Ordinary Shares currently
trade on Nasdaq under the symbol “NIVF.” As of the date of this prospectus, our only listed class of securities are our Ordinary
Shares. All of our Ordinary Shares, including those to be offered by the Selling Shareholders pursuant to this prospectus, have the same
rights and privileges. For more information, see “Description of Share Capital—Ordinary Shares.”
USE OF PROCEEDS
We will not receive any proceeds
from the sale of the Ordinary Shares by the Selling Shareholders. All net proceeds from the sale of the Ordinary Shares will go to the
Selling Shareholders.
DIVIDEND POLICY
We have not declared or paid
any cash dividend on our Ordinary Shares as of the date of this prospectus. We currently intend to retain any future earnings and do not
expect to pay any dividends in the near future. Any further determination to pay dividends on our ordinary shares would be at the discretion
of our Board of Directors, subject to applicable laws, and would depend on our financial condition, results of operations, capital requirements,
general business conditions, and other factors that our Board of Directors may deem relevant.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion
and analysis of our results of operations and financial condition should be read together with ou consolidated financial statements and
the notes thereto and other financial information, which are included elsewhere in this registration statement. Our financial statements
have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In addition, our financial
statements and the financial information included in this registration statement reflect our organizational transactions and have been
prepared as if our current corporate structure had been in place throughout the relevant periods.
This section contains
forward-looking statements. These forward-looking statements are subject to various factors, risks and uncertainties that could cause
actual results to differ materially from those reflected in these forward-looking statements. Further, as a result of these factors,
risks and uncertainties, the forward-looking events may not occur. Relevant factors, risks and uncertainties include, but are not limited
to, those discussed in the section entitled “Business,” “Risk Factors” and elsewhere in this registration statement.
Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s beliefs and opinions
as of the date of this registration statement. We are not obligated to publicly update or revise any forward -looking statements, whether
as a result of new information, future events or otherwise. See “Cautionary Note Regarding Forward-Looking Statements.”
Overview
NewGenIvf is an assisted
reproductive services (“ARS”) provider in Asia Pacific. Since the establishment of its first clinic in Thailand in 2014, it
has established itself as a long-standing ARS provider in the region. NewGenIvf’s mission is to assist couples and individuals across
Asia Pacific, regardless of fertility challenges that they may face, to fulfil their dreams of building families and to increase their
access to fertility treatments. Its strategic presence in Thailand, Cambodia, and Kyrgyzstan positions the company to take advantage of
opportunities across Asia Pacific.
NewGenIvf is still in the
early stage of materializing its long-term objective of building a comprehensive, sophisticated and high-end ARS platform for its clients
and providing personalized solutions based on NewGenIvf’s brands and client-generated services. NewGenIvf plans to offer full fertility
services for fertility tourists across Asia Pacific, continue to invest in laboratories and facilities updates, increase its brand awareness
and market share, as well as expand service reach through acquisitions and partnerships, which NewGenIvf believes will help expand its
client base and enhance expertise attraction, and in turn strengthen NewGenIvf’s monetization capabilities.
Key Factors Affecting NewGenIvf’s Results of Operations
NewGenIvf’s results
of operation are principally affected by the following factors:
Regulatory environment
The ARS market in Asia-Pacific
region is highly regulated. The implementation and enforcement of laws, regulations and government policies in Thailand, Cambodia, Kyrgyzstan
and other applicable jurisdictions significantly impact the design, pricing and sale of fertility services and cost of compliance for
clinics across Asia Pacific. Medical facilities providing fertility services generally must be filed and registered with the relevant
supervision institutions and such filing and registration must be renewed periodically. Any change in laws, regulations or policies in
relation to such filing or registration could affect NewGenIvf’s ability and plans to launch new services and renew registration
for existing services. The regulatory framework for medical facilities and services, especially those involving ARS, is, and will continue,
evolving. Any changes in the applicable regulatory frameworks in the jurisdictions where NewGenIvf operates may materially affect its
financial condition and results of operations.
Growth and competitive landscape of Asia Pacific’s ARS
market
NewGenIvf’s revenue
has historically been primarily derived from clients in Asia Pacific. As such, NewGenIvf’s financial performance and future growth
depend primarily on the demand for ARS, as well as changes in its competitive landscape, in Asia Pacific. Population growth, infertility
rates, and demand for facility treatments in the region will ultimately determine the demand for NewGenIvf’s services. According
to CIC, infertility is increasingly becoming prevalent globally, primarily driven by increasing average age of first birth, as well as
various lifestyle and environmental factors. Driven by an increased infertility rate and growing demand for children without birth defects,
resulting from improving living standards and improved awareness about birth defects and prevention, the global ARS market is expected
to continue to grow. Furthermore, according to CIC, a growing number of governments around the world has granted legal recognition to
same-sex marriages, which brings more desires for having children to form a complete family. According to CIC, because of the fertility
rate and recent government incentive policies, such as the Three-child Policy of China in 2021, the ARS market increased significantly
in Asia Pacific. Leveraging its status as a long-standing ARS provider in Asia Pacific, NewGenIvf expects to continue to be well positioned
to capture the expected growth in the demand for ARS in the area.
To date, NewGenIvf holds an exclusive license
granted by a division of the Genetics and IVF Institute to use MicroSort technology in Thailand and Cambodia, which is a form of pre-conception
gender selection technology for humans. While NewGenIvf expects to benefit from first-mover advantages for this technology in the two
regions, market entry by potential competitors or faster-than-expected development of potential competitors may affect its market position
and demand for its services and cause downward pricing pressure on its treatments, which may in turn materially and adversely affect
its results of operations. Meanwhile, ARS market could also be affected by the macroeconomic environment and geopolitical events. Uncertainty
in the macroeconomic environment, resulting from a range of events and trends, including the rise in global inflation and interest rates,
supply chain disruptions, geopolitical pressures, including the unknown impact of current and future trade regulations, changes in Asian-Pacific
relations, fluctuation in foreign exchange rates, and associated global economic conditions may result in volatility in ARS market and
NewGenIvf’s operating performance. For example, NewGenIvf derives a substantial portion of its revenue from Chinese clients and
as such, its failure to maintain PRC-sourced revenues and access to new and existing clients from the PRC could materially and adversely
affect its results of operations and competitive position. However, the near-term growth prospects of the PRC economy are unclear due
to the uncertain effects of ongoing economic stress caused by policies to contain the COVID-19 pandemic, trade and national security
policies, and the elevated levels of private and public indebtedness, among others. According to the National Statistics Bureau of the
PRC, growth rate of China’s GDP for the year 2022 slowed down to 3.0% on a year-on-year basis compared to the growth rate of approximately
8.4% for the year 2021. In the second quarter of 2023, China’s GDP grew only 0.8% on a quarter basis, a significant slowdown from
the 2.2% quarter growth registered in the first quarter of 2023. A prolonged downturn in the PRC economy generally could materially and
adversely affect NewGenIvf’s results of operations and there is a significant likelihood that NewGenIvf’s actual results
over the time periods and under the scenarios covered by the projections would be different. However, China’s GDP in the third
quarter of 2023 grew 4.9% on a year-on-year basis and grew 1.3% on a quarter-by-quarter basis. NewGenIvf believes that if there is a
recovery of the PRC economy, it might increase the demand for NewgenIvf’s services and therefore in turn affect NewGenIvf’s
results of operations.
Fluctuation of costs
NewGenIvf’s costs primarily
include clinic costs, cost of goods sold, selling and marketing expenses and general and administrative expenses, details of which are
set out below.
|
● |
Clinic costs. NewGenIvf’s clinic costs primarily consisted of sub-contracting charges, office supplies and staff salaries and bonus, most of which are recognized during the provision of surrogacy services. Its clinic costs represented approximately 55.7%, 65.7% of its revenue for the years ended December 31, 2023 and 2022, respectively. As NewGenIvf gradually expands the scale of its operation and presence in Asia Pacific, its clinic costs is expected to increase in the foreseeable future, which will affect its profitability. |
|
● |
Cost of goods
sold. NewGenIvf’s cost of goods sold primarily consisted of purchase and direct cost for IVF treatment services and
surrogacy and ancillary caring services, most of which are recognized during the provision of IVF treatment services. Its cost of
goods sold represented approximately 11.6% and 8.5% of the revenue for the years ended December 31, 2023 and 2022,
respectively. NewGenIvf expects its cost of goods sold to increase in the foreseeable future as it gradually grows its revenues and
expand its sales network. |
|
● |
Selling and marketing
expenses. NewGenIvf’s selling and marketing expenses primarily consisted of social media expense. Its selling and
marketing expenses represented approximately 0.4% and 0.6% of its revenue for the years ended December 31, 2023 and 2022,
respectively. NewGenIvf expects its selling and marketing expenses to increase as it plans to expand its sales and scale its
operation in Asia-Pacific. |
|
● |
General and administrative
expenses. NewGenIvf’s general and administrative expenses primarily consisted of depreciation in operating lease right-of-use
(“ROU”) assets, l and staff salaries and
director fees. Its general and administrative expenses represented approximately 24.5% and 18.4% of its revenue for the years ended
December 31, 2023 and 2022, respectively. NewGenIvf expects its general and administrative expenses to increase in line with its expansion
plan. |
NewGenIvf expects its cost
structure to evolve as it develops and expands its business. As NewGenIvf continues to develop new services and technologies, NewGenIvf
expects to incur additional costs in relation to its raw materials procurement, production and sales and marketing, among other things.
Moreover, to support NewGenIvf’s business growth, it expects to increase its headcount, particularly for its lab and nurse team,
and incur higher staff costs as a result.
Ability to maintain trust of clients and reputation in the industry
The success of NewGenIvf’s
business will depend to a large extent on its ability to gain broad acceptance of its services from clients. Reputation is crucial in
keeping existing clients and attracting new clients. NewGenIvf’s reputation depends on a number of factors, including for example
the success, effectiveness, quality and pricing of its services, service offerings of its competitors, the effectiveness of its marketing
efforts to drive awareness and the demand for fertility services, which eventually will affect its ability to maintain clients and attract
new clients. Therefore, NewGenIvf’s success will depend to a large extent on its ability to maintain its reputation in the industry
and its clients’ trust, which would affect the number of its clients and treatment cycles that will in turn affect its revenues.
NewGenIvf believes that the
medical facilities in its network are increasingly recognized among clients, for their service quality, technological expertise and patient
experience. NewGenIvf also hopes to keep its clients by providing discounts in treatment services and via the “success guarantee”
program for egg donation services in Cambodia and surrogacy services in Kyrgyzstan, which provides treatments to clients until a success
is achieved.
Based on its increasingly
recognized reputation, NewGenIvf believes that there is substantial opportunity to continue to grow its revenue through attracting new
clients. NewGenIvf’s addressable market is couples who want to have children, egg freezing patients, LGBT groups and couples with
genetic abnormalities, particularly those in Asia Pacific. NewGenIvf believes that its current client base represents a small percentage
of its total market opportunity. NewGenIvf intends to attract new clients by, among other things, making significant investments in sales
and marketing to engage, educate and drive awareness of the unmet need of fertility treatment among its potential clients and by its customer-reference
discounts mechanism. Additionally, NewGenIvf believes that its expanding presence has resulted in a heightened awareness of the need to
offer fertility services and the value it provides to its clients, which it believes will help facilitate its growth. In addition, NewGenIvf
is continuously utilizing its established client relationships to evaluate other potential services that could benefit its clients and
simultaneously drive its growth.
International traveling conditions
The revenue from international
clients is a critical component of NewGenIvf’s revenue. International traveling to Thailand, Cambodia and Kyrgyzstan may be affected
by a number of factors, including local and global political, economic and cultural conditions. Furthermore, an outbreak, or threatened
outbreak, of any severe contagious disease may also in turn significantly reduce the demand of traveling. For example, the COVID-19 pandemic
has had resulted in a number of countries declaring a state of emergency and a number of countries, including the countries in Asian Pacific,
imposing extensive travel restrictions. NewGenIvf’s revenue in the year 2021 was significantly adversely affected due to the impact
from COVID-19 travel restrictions. In addition, a Chinese crime thriller, No More Bets, which has grossed more than $500 million
at the international box office since its August 2023 release and which tells the harrowing story of characters being lured and kidnapped
into a violent scam ring in an unnamed Southeast Asian country after accepting lucrative overseas job offers, and the continuing social
media coverage may have brought fears and safety concerns to Chinese tourists of being scammed and kidnapped in Thailand and Cambodia.
In addition, in October 2023, a 14-year-old with a gun opened fire in a luxury shopping mall in downtown Bangkok, killing two people and
injuring five in one of Thailand’s most popular tourist destinations. These conditions may cause NewGenIvf difficulty in attracting
clients from the PRC to travel to Thailand, Cambodia and Kyrgyzstan for NewGenIvf’s services, which could materially and adversely
affect NewGenIvf’s operations and financial results.
Given the uncertainty of
the local and global conditions and the countries’ future policy regarding international traveling, all of which are beyond NewGenIvf’s
control, NewGenIvf’s results of operation may be materially and adversely affected by any changes in international travelling conditions.
Key Components of Results of Operations
NewGenIvf’s revenues
were derived from two types of services: IVF treatment services and surrogacy and ancillary caring services.
Revenue
The following table sets
forth a breakdown of NewGenIvf’s revenue by the types of services, in absolute amounts and as percentages of total revenue, for
the periods indicated.
| |
For the Year ended December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | | |
% | | |
US$ | | |
% | |
IVF treatment services(1) | |
| 4,021,696 | | |
| 78.3 | | |
| 2,819,163 | | |
| 47.4 | |
Surrogacy and ancillary caring services | |
| 1,114,457 | | |
| 21.7 | | |
| 3,125,027 | | |
| 52.6 | |
Total revenues | |
| 5,136,153 | | |
| 100.0 | | |
| 5,944,190 | | |
| 100.0 | |
(1) |
Include an insignificant amount of revenue derived from consultation customers who used NewGenIvf’s non-IVF treatment and insignificant services, such as check-ups services, blood test services and other minor services. |
NewGenIvf generated revenue
from facilities located in various geographic regions. The following table sets forth a breakdown of NewGenIvf’s revenue based on
the locations where the revenue originated, in absolute amounts and as percentages of total revenue, for the periods indicated.
| |
For the Year ended December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | | |
% | | |
US$ | | |
% | |
HK SAR | |
| 34,038 | | |
| 0.7 | | |
| — | | |
| — | |
Kyrgyzstan | |
| 3,123,593 | | |
| 60.8 | | |
| 5,060,973 | | |
| 85.1 | |
Cambodia | |
| 621,619 | | |
| 12.1 | % | |
| 377,608 | | |
| 6.4 | |
Thailand | |
| 1,356,903 | | |
| 26.4 | % | |
| 505,609 | | |
| 8.5 | |
Total revenues | |
| 5,136,153 | | |
| 100.0 | | |
| 5,944,190 | | |
| 100.0 | |
NewGenIvf’s revenue
results are affected by, among others, changes in sales price and the fluctuation of foreign currency rates with US dollars. A 5% change
in sales price would cause 5% change in NewGenIvf’s revenue. Based on the breakdown of the revenue contribution in terms of currencies
used by customers for 2023, a 5% change in foreign currency rates with US dollars would cause approximately 1.3% change in NewGenIvf’s
revenue. NewGenIvf’s average sales revenue from IVF treatment services per each IVF Customer (as defined below) was approximately US$
14,951 in 2023 and average sales revenue from surrogacy and related ancillary caring services per each Surrogacy Customer was approximately
US$10,926 in 2023.
For the year ended December
31, 2023, NewGenIvf served 357 customers using IVF treatment services and surrogacy and ancillary caring services, and recorded average
revenue per such significant customer of approximately US$14,386.
IVF treatment services
NewGenIvf
generated revenue from IVF treatment services provided at facilities that NewGenIvf operated in Thailand and Cambodia. In addition, NewGenIvf
also recognized revenues from IVF treatments included in surrogacy services performed in Kyrgyzstan. NewGenIvf’s revenue from IVF
treatment service amounted to US$2,819,163 and US$4,021,696,
representing approximately 78.3% and 47.4% of its total revenues in 2023 and 2022, respectively. The number of IVF treatment service customers
(the “IVF Customers”), which includes surrogacy and ancillary caring service customers who also use IVF treatment services,
was approximately 269 in 2023, and the average sales revenue from IVF treatment services per each IVF Customer was approximately US$14,951
in 2023.
IVF treatment involves the
performance of a series of medical treatment and procedures that are not separately distinct and only brings benefits to client when embryo
is successfully implanted, either in the client or a surrogate mother. Therefore, revenue from IVF treatment is recognized at a point
in time when it is completed in clinic. The completion of this treatment is evidenced by a written IVF report indicating successful embryo
implantation.
Surrogacy and ancillary caring services
NewGenIvf also generated revenue from surrogacy and related ancillary
caring services provided at facilities that NewGenIvf operated in Kyrgyzstan. NewGenIvf’s revenue from surrogacy and ancillary caring
services amounted to US$1,114,457 and US$3,125,027, representing approximately 21.7% and 52.6% of its total revenues in 2023 and 2022,
respectively. The decrease in revenue from 2022 to 2023 was primarily attributed to the departure of an agent in mid-2023, which agent
had who introduced us customers for surrogacy and ancillary caring services, thus less income arising from surrogacy and ancillary caring
services was generated. The number of surrogacy and related ancillary caring service customers (the “Surrogacy Customers”)
was approximately 102 in 2023 and the average sales revenue from surrogacy and related ancillary caring services per each Surrogacy Customer
was approximately US$10,926 in 2023.
In surrogacy and ancillary
caring services, embryo from intending parents is implanted in the surrogate mother sub-contracted by NewGenIvf. During the pregnancy
period of the surrogate mother, NewGenIvf provides ancillary caring services including maternity caring services such as regular body
check and provision of vitamins, supplements and medicines to surrogate mothers, documentation service, and hotel accommodation services.
Revenue from surrogacy and ancillary caring services is recognized at a point in time when the surrogate mother gives birth.
Cost of revenue
The following table sets
forth a breakdown of NewGenIvf’s cost of revenue by the nature of the cost, in absolute amounts and as percentages of total cost
of revenues, for the periods indicated.
|
|
For the Year ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
US$ |
|
|
% |
|
|
US$ |
|
|
% |
|
Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
594,984 |
|
|
|
17.2 |
|
|
|
502,969 |
|
|
|
11.4 |
|
Clinic costs |
|
|
2,859,384 |
|
|
|
82.8 |
|
|
|
3,903,452 |
|
|
|
88.6 |
|
Total cost of revenues |
|
|
3,454,368 |
|
|
|
100.0 |
|
|
|
4,406,421 |
|
|
|
100.0 |
|
Cost of goods sold. Cost
of goods sold primarily consisted of purchase and direct cost for IVF treatment services and surrogacy and ancillary caring services.
NewGenIvf’s cost of goods was mostly recognized during the provision of IVF treatment services.
Clinic costs. Clinic
costs primarily consisted of sub-contracting charges, office supplies and staff salaries and bonus. The largest portion of clinic costs
was sub-contracting charges, representing fees paid to agents who recruited surrogate mothers and assisted in the documentation, consulting
and medical treatment arrangement throughout treatment procedure. NewGenIvf’s clinic costs of goods were mostly recognized during
the provision of surrogacy services.
Gross profit and gross margin
The following table sets
forth NewGenIvf’s gross profit in absolute amounts and its gross margin as percentages of total revenues, for the periods indicated.
| |
For the Year ended December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | | |
% | | |
US$ | | |
% | |
Gross profit | |
| 1,681,785 | | |
| 32.7 | % | |
| 1,537,769 | | |
| 25.9 | |
Revenues | |
| 5,136,153 | | |
| — | | |
| 5,944,190 | | |
| — | |
NewGenIvf expects that gross
profit and gross margin will continue to be affected by various factors including the geographic locations where treatments are performed,
as well as the pricing with its clients, agent subcontracting charges and the costs of the supplies provided by major pharmaceutical companies,
all of which are negotiated separately.
Operating expenses
NewGenIvf’s operating
expenses consist primarily of selling and marketing expenses and general and administrative expenses. NewGenIvf’s selling and marketing
expenses are primarily social media expenses. NewGenIvf’s general and administrative expenses mainly include depreciation in operating
lease ROU assets, loss on disposal of plant and equipment and staff salaries.
Other income
NewGenIvf’s other income
consists primarily of waiver of related party balance.
Interest expense
NewGenIvf’s interest
expense is incurred in relation to its interest-bearing borrowing.
Taxation
Cayman Islands
NewGenIvf is incorporated
in the Cayman Islands and is not subject to tax on income or capital gains under current Cayman Islands law. In addition, upon payment
of dividends to shareholders, no Cayman Islands withholding tax will be imposed.
Hong Kong
Under the two-tiered profits
tax rates regime, Hong Kong tax residents are subject to Hong Kong profits tax in respect of profits arising in or derived from
Hong Kong at 8.25% for the first HK$2 million of profits of the qualifying group entity, and profits above HK$2 million
will be taxed at 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed
at a flat rate of 16.5%.
Accordingly, the Hong Kong
profits tax is calculated at 8.25% on the first HK$2 million of the estimated assessable profits and at 16.5% on the remaining estimated
assessable profits.
Thailand
The companies incorporated
in Thailand are taxed on worldwide income. A company incorporated outside of Thailand is taxed on its profits arising from or in consequence
of the business carried on in Thailand. The Thailand corporate income tax rate is 20%. A foreign company not carrying on business in Thailand
is subject to a final withholding tax on certain types of assessable income (e.g., interest, dividends, royalties, rentals, and service
fees) paid from or in Thailand. The rate of tax is generally 15%, except for dividends, which is 10%, while other rates may apply under
the provisions of a double tax treaty.
Cambodia
The standard rate of corporate
income tax for companies and permanent establishments in Cambodia who are classified as medium and large taxpayers is 20%. For companies
and permanent establishments who are classified as small taxpayers, the corporate income tax rates are progressive rates from 0% to 20%.
In view of the annual turnover of the company, which ranges from KHR1 billion to KHR6 billion for service and commercial sectors, the
company is considered a medium-sized company.
Kyrgyzstan
NewGenIvf is subject to a
corporate income tax on its aggregate annual income earned worldwide. Non-resident legal entities carrying out business activities through
a permanent establishment in Kyrgyzstan are subject to profit tax on the income attributed to the activities of that permanent establishments.
Profit tax is calculated at a rate of 10% of aggregate annual income less allowed deductions.
Results of Operations
| |
For the Year ended
December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | |
Revenues | |
| 5,136,153 | | |
| 5,944,190 | |
Cost of revenues | |
| (3,454,368 | ) | |
| (4,406,421 | ) |
Gross profit | |
| 1,681,785 | | |
| 1,537,769 | |
| |
| | | |
| | |
Operating expenses | |
| | | |
| | |
Selling and marketing expenses | |
| (18,030 | ) | |
| (36,194 | ) |
General and administrative expenses | |
| (1,259,364 | ) | |
| (1,094,962 | ) |
Auditors fees | |
| (362,149 | ) | |
| (7,908 | ) |
Total operating expenses | |
| (1,639,543 | ) | |
| (1,139,064 | ) |
| |
| | | |
| | |
Operating income | |
| 42,242 | | |
| 398,705 | |
| |
| | | |
| | |
Other income (expenses), net | |
| | | |
| | |
Other income | |
| 111,837 | | |
| 23,019 | |
Interest income | |
| 518 | | |
| 21 | |
Interest expense | |
| (46,179 | ) | |
| (77,757 | ) |
Total other income (expenses), net | |
| 66,176 | | |
| (54,717 | ) |
| |
| | | |
| | |
Income before taxes | |
| 108,418 | | |
| 343,988 | |
Provision for income taxes | |
| — | | |
| (208,141 | ) |
Net income | |
| 108,418 | | |
| 135,847 | |
Less: net loss attributable to non-controlling interests | |
| (21,775 | ) | |
| (322,820 | ) |
Net income attributable to the shareholders of the Company | |
| 130,193 | | |
| 458,667 | |
Other comprehensive (loss) income | |
| | | |
| | |
Foreign currency translation adjustment | |
| (22,704 | ) | |
| (1,920 | ) |
Total comprehensive income | |
| 85,714 | | |
| 133,927 | |
Less: Total comprehensive loss attributable to non-controlling interests | |
| (27,621 | ) | |
| (323,458 | ) |
Total comprehensive income attributable to the shareholders of the Company | |
| 113,335 | | |
| 457,385 | |
| |
| | | |
| | |
(Loss) earning per share – basic and diluted | |
| 0.18 | | |
| 0.80 | |
Basic and diluted weighted average shares outstanding | |
| 615,135 | | |
| 575,930 | |
Year Ended December 31, 2023 Compared with Year Ended December 31,
2022
Revenue
NewGenIvf’s revenue
decreased by approximately 13.6% from US$5,944,190 in 2022 to US$5,136,153 in 2023.
IVF treatment services
NewGenIvf’s
IVF treatment service revenue increased by approximately 42.7% from US$2,819,163 in 2022 to US$4,021,696 in 2023. This increase was primarily
the result of our continued expansion of clinics in Thailand which focus on IVF services.
Surrogacy and ancillary caring services
NewGenIvf’s
surrogacy and ancillary caring services revenue decreased by approximately 64.3% from US$3,125,027 in 2022 to US$1,114,457 in 2023. This
decrease was primarily the result of temporary caesura of surrogacy business.
Cost of revenue
NewGenIvf’s
cost of revenue decreased by approximately 21.6% from US$4,406,421 in 2022 to US$3,454,368
in 2023.
Cost of goods sold
NewGenIvf’s
cost of goods sold increased by approximately 18.3% from US$502,969 in 2022 to US$594,984 in 2023, primarily attributed to the stocking
arrangements prepared for 2023 exceed the original estimated demand, due to the local top management reported on board until in the middle
of the year, and the procurement strategy was not immediately carried on time, which also caused procurement costs to double year-on-year.
Clinic costs
NewGenIvf’s
clinic costs decreased by approximately 26.7% from US$3,903,452 in 2022 to US$2,859,384 in 2023, primarily due to the relocation
arrangement, certain daily operating schedules stopped, resulting in the clinic’s service being temporarily suspended in
2023.
Gross profit
NewGenIvf’s gross profit
increased by approximately 9.4% from US$1,537,769 in 2022 to US$1,681,785 in 2023, primarily attributable to a reorganizing of our cooperation
model with subcontractors and the increased efficiency of our marketing services, resulting in a decrease in unit service costs per customer,
directly leading to increases in gross profit margins.
NewGenIvf’s gross margin
increased from 25.9% and 32.7% in 2022 to 2023.
Operating expenses
NewGenIvf’s
operating expenses increased by approximately 43.9% from US$1,139,064 in 2022 to US$1,639,543 in 2023, primarily attributable to auditor
fees of US$362,149 incurred in 2022 being recognised in 2023 and listing legal and professional fees of US$183,527, other than these
old fees incurred, there is the similar level with last year.
Other income
NewGenIvf’s
other income increased from US$23,019 in 2022 to US$111,837 in 2023, primarily attributable to a waiving amount due to director from the
company which is about US$88,151.
Interest expense
NewGenIvf’s interest
expense decreased by approximately 40.6%, from US$77,757 in 2022 to US$46,179 in 2023 as a result of less interest expenses on bank and
other borrowings in 2023.
Provision for income taxes
NewGenIvf’s
provision for income taxes decreased by approximately 100% from US$208,141 in 2022 to US$Nil in 2023 as a result of no assessable income
generated from Thailand, Kyrgyzstan and Cambodia.
Net income
NewGenIvf’s net income
decreased by approximately 20% from US$135,847 in 2022 to US$108,418 in 2023 as a result of a listing project carried out during in 2023
and a relocation of our operating clinic in Thailand, to cause the increase cost and salary of recruiting and training loacl talents.
There is an additional auditor fees for the year, which is amounting to US$362,149.
Liquidity and Capital Resources
Cash flows and working capital
NewGenIvf’s
principal sources of liquidity have been cash flows generated from its business operations. As of December 31, 2023 and 2022, NewGenIvf
had US$54,104 and U$27,556, respectively, in cash and cash equivalents. NewGenIvf had working capital (defined as total current assets
deducted by total current liabilities) of a surplus of US$79,000 and deficit of US$157,027, respectively, as of December 31, 2023
and 2022.
Over the years, certain amount
of cash provided by operating activities was distributed to NewGenIvf’s primary shareholders, Mr. Siu, Wing Fung Alfred and Ms.
Fong, Hei Yue Tina. As of December 31, 2023, NewGenIvf does not owe any amounts to shareholders. Nevertheless, NewGenIvf is able to generate
sufficient cash flow from its business operations to operate and grow its business.
NewGenIvf continually seeks
to monetize from positive cash flow contracts and increase revenue from its operating activities. NewGenIvf monitors its current and expected
liquidity requirements to help ensure that it maintains sufficient cash balances to meet its existing and reasonably likely long-term
liquidity needs.
NewGenIvf intends to finance
its future working capital requirements and capital expenditures from cash generated from operating activities, in addition to funds raised
from financing activities. NewGenIvf may, however, require additional cash due to changing business conditions or other future developments,
including any investments or acquisitions it may decide to pursue. If its existing cash is insufficient to meet its requirements, NewGenIvf
may seek to issue debt or equity securities or obtain additional credit facilities. Financing may be unavailable in the amounts NewGenIvf
needs or on terms acceptable to it, if at all. Issuance of additional equity securities, including convertible debt securities, would
dilute NewGenIvf’s earnings per share. The incurrence of debt would divert cash for working capital and capital expenditures to
service debt obligations and could result in operating and financial covenants that restrict NewGenIvf’s operations and its ability
to pay dividends to its shareholders. If NewGenIvf is unable to obtain additional equity or debt financing as required, its business operations
and prospects may suffer. Please see “Risk Factors — Risks Relating to NewGenIvf’s Business and Industry —
NewGenIvf requires a significant amount of capital to fund its operations and growth. If NewGenIvf cannot obtain sufficient capital on
acceptable terms, its business, financial condition, and prospects may be materially and adversely affected.”
The following table presents
NewGenIvf’s selected consolidated cash flow data for the periods indicated.
| |
For the Year ended December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | |
Net cash (used in)/provided by operating activities | |
| (1,766,135 | ) | |
| 1,710,901 | |
Net cash used in investing activities | |
| (69,848 | ) | |
| (94,452 | ) |
Net cash provided by/(used in) financing activities | |
| 1,881,493 | | |
| (1,633,781 | ) |
| |
| | | |
| | |
Net increase/(decrease) in cash and cash equivalents | |
| 45,510 | | |
| (17,332 | ) |
Effect of foreign currency translation on cash and cash equivalents | |
| (18,962 | ) | |
| 16,124 | |
Cash and cash equivalents, beginning of year | |
| 27,556 | | |
| 28,764 | |
Cash and cash equivalents, end of year | |
| 54,104 | | |
| 27,556 | |
Operating activities
Net cash used in operating
activities was US$1,766,135 for the year ended December 31, 2023. The difference between NewGenIvf’s net profit of US$108,418 for
the year ended December 31, 2023 and the net cash used in operating activities was primarily attributable to refund of payment from clients
from the contract liabilities and the expenses spent on the legal and professional cost which was capitalized in the book of 2023.
Net cash provided by operating
activities was US$1,710,901 for the year ended December 31, 2022. The difference between NewGenIvf’s net income of US$135,847
for the year ended December 31, 2022 and the net cash provided by operating activities was primarily attributable to (i) adjustments
for depreciation and amortization of US$303,944, (ii) changes in contract liabilities of US$548,010 and (iii) changes in directors’
remuneration of US$240,000, partially offset by operating lease liabilities of US$175,132.
Investing activities
Net cash used in investing
activities in 2023 was US$69,848, primarily representing purchase of plant and equipment.
Net cash used in investing
activities in 2022 was US$94,452, primarily representing purchase of plant and equipment.
Financing activities
Net
cash provided by financing activities in 2023 was US$1,881,493, primarily representing amounts from shareholders.
Net cash used in financing
activities in 2022 was US$1,633,781, primarily representing amounts due from related parties.
Contractual Obligations
The following table sets
forth NewGenIvf’s main contractual obligations and commitments as of December 31, 2023.
| |
December 31, | |
| |
2023 | | |
2022 | |
| |
US$ | | |
US$ | |
Lease liabilities – current portion | |
| 207,128 | | |
| 184,651 | |
Lease liabilities – non-current portion | |
| 118,979 | | |
| 242,187 | |
Total | |
| 326,107 | | |
| 426,838 | |
Off-Balance Sheet Commitments and Arrangements
NewGenIvf has not entered
into any financial guarantees or other commitments to guarantee the payment obligations of any third parties, nor any derivative contracts
that are indexed to its shares and classified as shareholder’s equity or that are not reflected in its consolidated financial statements.
Furthermore, NewGenIvf does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves
as credit, liquidity or market risk support to such entity. NewGenIvf does not have any variable interest in any unconsolidated entity
that provides financing, liquidity, market risk or credit support to it or engages in leasing, hedging or product development services
with it.
Holding Company Structure
NewGenIvf Group Limited is
a holding company with no material operations of its own. NewGenIvf Group Limited conducts all of its operations through its subsidiaries.
As a result, NewGenIvf Group Limited’s ability to pay dividends depends upon dividends paid by its subsidiaries. If our subsidiaries
or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their
ability to pay dividends to the Company.
NewGenIvf Group Limited is
permitted under BVI law to provide funding to its subsidiaries in Hong Kong, Thailand, Cambodia and Kyrgyzstan through loans or capital
contributions without restrictions on the amount of the funds.
In addition, the Company’s
subsidiaries are currently permitted to pay dividends to the Company in accordance with relevant laws and regulations. Payment of dividends
requirements in a company incorporated under the laws of Thailand is governed by the Civil and Commercial Code of Thailand. For example,
the company may not declare dividends if the company has incurred losses, the company must appropriate to a reserved fund at each dividend
contribution of dividend of at least one-twentieth of the profits until the fund reaches one-tenth of the capital, or the dividends payment
must be made to the shareholders within one (1) month from the dividend declaration date. On the capital remittance or payment of
dividends to the shareholders from outside of Thailand, it is regulated by the regulations issued by the Bank of Thailand, including the
Exchange Control Act B.E. 2485 (1942). The fund remittance from Thailand to a foreign jurisdiction may require an approval from the Bank
of Thailand or require notifying the Bank of Thailand for such transfer, depending on the types of the remittance transactions, through
the commercial bank in the country. For a company incorporated under the laws of Kyrgyzstan, under Kyrgyz regulations of dividends (net
profit), the dividends can be paid once a year depending on the results of the financial year of the company.
Quantitative and Qualitative Disclosure about Market Risk
Accounts receivable
In order to minimize the
credit risk, NewGenIvf’s management team monitors and ensures that follow-up action is taken to recover overdue debts. NewGenIvf
considers the probability of default upon initial recognition of the asset and whether there has been a significant increase in credit
risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, NewGenIvf
compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
It considers available reasonable and supportive forwarding-looking information, such as GDP growth rate and nominal GDP per capita. Based
on the impairment assessment performed by NewGenIvf, the directors considered the loss allowance for account receivables as of December 31,
2023 and December 31, 2022 is $19 and $26, respectively.
Cash
and cash equivalents
NewGenIvf is exposed to concentration
of credit risk on liquid funds which are deposited with several banks with high credit ratings. The credit risk on liquid funds is limited
because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.
Deposits and other receivables, amount
due from shareholders and loan to A SPAC I
NewGenIvf assessed the impairment
for deposits and other receivables, due from shareholders and loan to A SPAC I individually based on internal credit rating and ageing
of these debtors which, in the opinion of the directors, have no significant increase in credit risk since initial recognition. Based
on the impairment assessment performed by the Company, the directors consider the loss allowance for deposits and other receivables, due
from shareholders and loan to A SPAC I as of December 31, 2023 is $14, $17,818 and Nil, respectively. The loss allowance for deposits
and other receivables, due from shareholders and loan to A SPAC I as of December 31, 2022 is $141, $17,059 and Nil, respectively.
The loss allowance for deposits and other receivables and amount due from shareholders as of December 31, 2021 was $115 and $6,312
and Nil, respectively.
Cash flow interest rate risk
NewGenIvf is exposed to cash
flow interest rate risk through the changes in interest rates related mainly to its variable-rates bank balances.
NewGenIvf currently does
not have any interest rate hedging policy in relation to fair value interest rate risk and cash flow interest rate risk. The directors
monitor NewGenIvf’s exposures on an ongoing basis and will consider hedging the interest rate should the need arises.
Sensitivity analysis
The sensitivity analysis
below has been determined by assuming that a change in interest rates had occurred at the end of the reporting period and had been applied
to the exposure to interest rates for financial instruments in existence at that date. 1% 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 had been 1% higher or lower and all other variables were held constant, NewGenIvf’s post tax loss for
the years ended December 31, 2023 and 2022 would have increased or decreased by approximately US$122 and US$275,
respectively.
Foreign currency risk
Foreign currency risk is
the risk that the holding of foreign currency assets will affect NewGenIvf’s financial position as a result of a change in foreign
currency exchange rates.
NewGenIvf’s monetary
assets and liabilities are mainly denominated in HK$ and THB which are the same as the functional currencies of the relevant group entities.
Hence, in the opinion of the directors of NewGenIvf, the currency risk of US$ is considered insignificant. NewGenIvf currently does not
have a foreign currency hedging policy to eliminate currency exposures. However, the directors monitor the related foreign currency exposure
closely and will consider hedging significant foreign currency exposures should the need arise.
Economic and political risks
NewGenIvf’s operations
are mainly conducted in Thailand, Cambodia and Kyrgyzstan. Accordingly, NewGenIvf’s business, financial condition, and results of
operations may be influenced by changes in the political, economic, and legal environments in Thailand, Cambodia and Kyrgyzstan.
NewGenIvf’s operations
in Thailand, Cambodia and Kyrgyzstan are subject to special considerations and significant risks not typically associated with companies
in North America and Western Europe. These include risks associated with, among other things, the political, economic and legal environment
and foreign currency exchange. NewGenIvf’s results may be adversely affected by changes in the political and social conditions in
Thailand, Cambodia and Kyrgyzstan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures,
currency conversion, remittances abroad, and rates and methods of taxation, among other things.
Travel restriction risk
International clients contribute
a large portion of NewGenIvf’s revenue. International clients need to travel to Thailand, Cambodia and Kyrgyzstan for treatment
services, where NewGenIvf’s operations are mainly conducted.
International traveling to
Thailand, Cambodia and Kyrgyzstan may be affected by a number of factors, including local and global political and economic conditions.
Furthermore, an outbreak, or threatened outbreak, of any severe contagious disease may also in turn significantly reduce the demand of
traveling or cause extensive travel restrictions. NewGenIvf’s results may be materially and adversely affected if travel restriction
was imposed or difficulties in cross-border flow arose.
Inflation risk
Management of NewGenIvf monitors
changes in prices levels. Historically inflation has not materially impacted NewGenIvf’s consolidated financial statements; however,
significant increases in the price of labor that cannot be passed to NewGenIvf’s customers could adversely impact its results of
operations.
Critical Accounting Policies, Judgments and Estimates
NewGenIvf prepares its financial
statements in conformity with U.S. GAAP, which requires NewGenIvf to make judgments, estimates and assumptions. NewGenIvf continually
evaluates these estimates and assumptions based on the most recently available information, its historical experience and various other
assumptions that NewGenIvf’s management believes to be reasonable under the circumstances. Since the use of estimates is an integral
component of the financial reporting process, actual results could differ from its expectations as a result of changes in NewGenIvf’s
estimates. Some of NewGenIvf’s accounting policies require a higher degree of judgment than others in their application and require
NewGenIvf to make significant accounting estimates.
The selection of critical
accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results
to changes in conditions and assumptions are factors that should be considered when reviewing NewGenIvf’s financial statements.
NewGenIvf’s management believes the following accounting policies involve the most significant judgments and estimates used in the
preparation of their financial statements.
Foreign currency translation
NewGenIvf’s consolidated
financial statements are presented in United States dollar, which is the reporting currency of NewGenIvf. The functional currency
of NewGenIvf and its subsidiaries, FFPGS (HK) Limited and Well Image Limited, are HK$. Med Holdings and FFC use THB as their functional
currencies. First Fertility Phnom Penh Limited uses KHR as its functional currency and First Fertility Bishkek LLC uses USD as its functional
currency.
Assets and liabilities denominated
in currencies other than the reporting currency are translated into the reporting currency at the rates of exchange prevailing at the
balance sheet date. Translation gains and losses are recognized in the consolidated statements of operations and comprehensive income
as other comprehensive income or loss.
Transactions in currencies
other than the reporting currency are measured and recorded in the reporting currency at the exchange rate prevailing on the transaction
date. The cumulative gain or loss from foreign currency transactions is reflected in the consolidated statements of operations and comprehensive
income as other income (other expenses).
The value of foreign currencies
including, the HK$, THB, KHR and RMB, may fluctuate against the United States dollar. Any significant variations of the aforementioned
currencies relative to the United States dollar may materially affect NewGenIvf’s financial condition in terms of reporting
in USD. See “Note 2 — Summary of Significant Accounting Policies” for details.
Revenue recognition
NewGenIvf adopted ASC Topic 606,
Revenue from Contracts with Customers, and all subsequent ASUs that modified ASC 606 on April 1, 2017 using the full retrospective
method which requires it to present the financial statements for all periods as if Topic 606 had been applied to all prior periods.
NewGenIvf derives revenue principally from provision of IVF treatment and surrogacy and ancillary caring services. Revenue from contracts
with customers is recognized using the following five steps:
|
(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) |
recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised services are transferred to the client in an amount that reflects the consideration expected in exchange for those services. |
NewGenIvf enters into service
agreements with its customers that outline the rights, responsibilities, and obligations of each party. The agreements also identify the
scope of services, service fees and payment terms. Agreements are acknowledged and signed by both parties. All the contracts have commercial
substance, and it is probable that NewGenIvf will collect considerations from its customers for service component.
NewGenIvf derives its revenues
from two types of services: (1) IVF treatment services, and (2) surrogacy and ancillary caring services.
Revenue from IVF treatment services
IVF treatment is an assisted
reproductive technique where eggs and sperm are collected and fertilized in laboratory to become embryo. Fertilized embryo is then implanted
in the customer or a surrogate mother. IVF treatment involves the performance of a series of medical treatment and procedures that are
not separately distinct and only brings benefits to customer when embryo is successfully implanted, therefore revenue from IVF treatment
is recognized at a point in time when it is completed in clinic. The completion of this treatment is evidenced by a written IVF report
indicating successful embryo implantation. NewGenIvf collects payment from customer in advance for IVF treatment.
Revenue from surrogacy and ancillary caring services
NewGenIvf provides surrogacy
and ancillary caring services solely in Kyrgyzstan. Embryo from blood parents is implanted to surrogate mother contracted by NewGenIvf.
During pregnancy period, NewGenIvf provides ancillary caring services including regular body check and provision of vitamins, supplements
and medicines to surrogate mothers. The key performance obligation is identified as a single performance obligation where a baby is born,
therefore revenue from surrogacy and ancillary caring services is recognized at a point in time when surrogate mother gives birth. NewGenIvf
collects approximately 40% of contract sum upfront, and remaining contract sum is collected in installments across pregnancy period of
surrogate mother.
Lease
NewGenIvf
adopted ASU 2016-02, “Leases” (Topic 842). Lease terms used to calculate the present value of lease payments generally do
not include any options to extend, renew, or terminate the lease, as NewGenIvf does not have reasonable certainty at lease inception that
these options will be exercised. NewGenIvf generally considers the economic life of its operating lease ROU assets to be comparable to
the useful life of similar owned assets. NewGenIvf has elected the short-term lease exception, therefore operating lease ROU assets and
liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee.
The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term.
As
of December 31, 2022, there were approximately $0.38 million
ROU assets and approximately $0.43 million in lease liabilities based on the present value of the future minimum rental payments of leases,
respectively. NewGenIvf’s management believes that using an incremental borrowing rate of the Hong Kong Dollar Best Lending Rate
(“BLR”) minus 0.125% was the most indicative rate of NewGenIvf’s borrowing cost for the calculation of the present value
of the lease payments; the rate used by NewGenIvf was 5.0%.
As
of December 31, 2023, there were approximately $0.28 million
ROU assets and approximately $0.33 million in lease liabilities based on the present value of the future minimum rental payments of leases,
respectively. NewGenIvf’s management believes that using an incremental borrowing rate of the Hong Kong Dollar Best Lending Rate
(“BLR”) minus 0.125% was the most indicative
rate of NewGenIvf’s borrowing cost for the calculation of the present value of the lease payments; the rate used by NewGenIvf was
5.0%.
Financial
instruments
NewGenIvf’s financial
instruments, including cash and cash equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and
amounts due from (to) shareholders, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820,
“Fair Value Measurements and Disclosures” requires disclosing the fair value of financial instruments held by NewGenIvf. ASC
Topic 825, “Financial Instruments” defines fair value and establishes a three-level valuation hierarchy for disclosures
of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated
balance sheets for cash and cash equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and amounts
due from (to) shareholders each qualify as financial instruments and are a reasonable estimate of their fair values because of the short
period between the origination of such instruments and their expected realization and their current market rate of interest. NewGenIvf
analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities
from Equity” and ASC 815. See “Note 2 — Summary of Significant Accounting Policies” for details.
Recent accounting pronouncements
In
April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives
and Hedging, and Topic 825, Financial Instruments, which amends and clarifies several provisions of Topic 326. In May 2019, the FASB issued
ASU 2019-05, Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief, which amends Topic 326 to allow the fair value
option to be elected for certain financial instruments upon adoption. ASU 2019-10 extended the effective date of ASU 2016-13 until December
15, 2022. This standard replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected
credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial
asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets
measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures
such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected
to be collected by using an allowance for expected credit losses. The Company already adopted the new standard and the Company recognizes
the full impact of the new standard in these consolidated balance sheets and makes related disclosures.
SELLING SHAREHOLDERS
The 5,912,281 Ordinary Shares being offered by the Selling Shareholders
are the aggregate of Ordinary Shares previously issued to the Selling Shareholders as a result of various transactions that have occurred,
which details are set forth below. We are registering the Ordinary Shares in order to permit the Selling Shareholders to offer the Ordinary
Shares for resale from time to time.
Other than the relationships
described herein, to our knowledge, the Selling Shareholders have not had any material relationship with us within the past three years.
Any Selling Shareholders that
are affiliates of broker-dealers and any participating broker-dealers would be deemed to be “underwriters” within the meaning
of the Securities Act, and any commissions or discounts given to any such Selling Shareholders or broker-dealer may be regarded as underwriting
commissions or discounts under the Securities Act. To our knowledge, none of the Selling Shareholders listed below are broker-dealers
or affiliates of broker-dealers.
The table below lists the
Selling Shareholders and other information regarding the beneficial ownership of the Ordinary Shares by each of the Selling Shareholders.
The second column lists the number of Ordinary Shares beneficially owned by each Selling Shareholder, based on its ownership of the Ordinary
Shares, as of August 27, 2024.
The fourth column lists the
Ordinary Shares being offered by this prospectus by the Selling Shareholders.
Because the number of Ordinary
Shares may be adjusted for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions, the number
of Ordinary Shares that will actually be sold may be more or less than the number of Ordinary Shares being offered by this prospectus.
The fifth and sixth columns assumes the sale of all of the Ordinary Shares offered by the Selling Shareholders pursuant to this prospectus.
As explained below under “Plan
of Distribution,” we have agreed with the Selling Shareholders to bear certain expenses (other than broker discounts and commissions,
if any) in connection with the registration statement, which includes this prospectus.
The following table sets forth details regarding the offering of certain Selling Shareholders’ Ordinary Shares pursuant to this registration statement.
Name of Selling Shareholders | |
Ordinary Shares Beneficially Owned Prior to Offering(1) | | |
Percentage of Ordinary Shares Beneficially Owned Prior to Offering(1) | | |
Maximum Number of Ordinary Shares to be Sold Pursuant to this Prospectus | | |
Ordinary Shares Beneficially Owned Immediately After Sale of Maximum Number of Shares in this Offering(1) | | |
Percentage
of Ordinary Shares Beneficially Owned Immediately After Sale of Maximum Number of Shares in this
Offering(1) | |
JAK Opportunities VI LLC(3) | |
| 3,618,791 | | |
| 35.66 | % | |
| 5,912,281 | | |
| - | | |
| - | |
| (1) | Beneficial
ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. Ordinary
Shares subject to options or warrants currently exercisable, or exercisable within 60 days of September 4, 2024, are counted as outstanding
for computing the percentage of the Selling Shareholder holding such options or warrants but are not counted as outstanding for computing
the percentage of any other Selling Shareholder. |
| (2) | The
applicable percentage of beneficial ownership is calculated based on the total number of Ordinary Shares issued and outstanding, being
10,149,386 shares, as of September 4, 2024, together with the additional Ordinary Shares to be issued to the relevant Selling Shareholder
upon exercise of warrants respectively held. |
| (3) | The
number of Ordinary Shares being registered for JAK Opportunities VI LLC represents the aggregate of (i) the following underlying securities
in connection with the initial closing on August 12, 2024 of the Company’s debt financing (“2024 Debt Financing”):
(A) 1,325,301 Ordinary Shares underlying the Series A Warrants and (B) twice the number of the 1,417,832 Ordinary Shares underlying the
senior convertible promissory note in the principal amount of $1,100,000 issued to JAK Opportunities VI LLC, pursuant to the terms of
the Registration Rights Agreement between JAK Opportunities VI LLC and the Company (the “Registration Rights Agreement”);
and (ii) twice the number of the 875,658 Ordinary Shares underlying the senior convertible promissory note in the principal amount of
$500,000 issued to JAK Opportunities VI LLC on August 28, 2024 pursuant to the closing of the second tranche of the 2024 Debt Financing
and the terms of the Registration Rights Agreement. The percentage of beneficial ownership is calculated based on a denominator of 10,149,386
Ordinary Shares issued and outstanding as of August 27, 2024. The mailing address of JAK
Opportunities VI LLC is c/o ATW Partners Opportunities Management, LLC, 1 Pennsylvania Plaza, Suite 4810, New York, NY 10119. |
PLAN OF DISTRIBUTION
We are registering the Ordinary
Shares previously issued, to permit the resale of these Ordinary Shares by the holders of these securities from time to time after the
date of this prospectus. We will not receive any of the proceeds from the sale by the Selling Shareholders of the Ordinary Shares. Unlike
an initial public offering, any resale by the Selling Shareholders of the Ordinary Shares is not being underwritten by any investment
bank. We will bear all fees and expenses incident to our obligation to register the Selling Shareholders’ Ordinary Shares.
The Selling Shareholders may
sell all or a portion of the Ordinary Shares beneficially owned by them and offered hereby from time to time directly or through one or
more underwriters, broker-dealers or agents. If the Ordinary Shares are sold through underwriters or broker-dealers, the Selling Shareholders
will be responsible for underwriting discounts or commissions or agent’s commissions. The Ordinary Shares may be sold in one or
more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale
or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,
| ● | on any national securities exchange
or quotation service on which the securities may be listed or quoted at the time of sale; |
|
● |
in the over-the-counter market; |
|
● |
in transactions other than on these exchanges or systems or the over-the-counter market; |
|
● |
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
|
● |
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
|
● |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
|
● |
an exchange distribution in accordance with the rules of the applicable exchange; |
|
● |
privately negotiated transactions; |
|
● |
sales pursuant to Rule 144 under the Securities Act; |
|
● |
broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share; |
|
● |
a combination of any such methods of sale; and |
|
● |
any other method permitted pursuant to applicable law. |
If the Selling Shareholders
affect such transactions by selling Ordinary Shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers
or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Shareholders or commissions from
purchasers of the Ordinary Shares for whom they may act as an agent or to whom they may sell as principal (which discounts, concessions
or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions
involved).
The Selling Shareholders may
pledge or grant a security interest in some or all of the Ordinary Shares owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the Ordinary Shares from time to time pursuant to this prospectus
or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary,
the list of Selling Shareholders to include the pledgee, transferee or other successors in interest as selling stockholders under this
prospectus. The Selling Shareholders also may transfer and donate the Ordinary Shares in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. The Selling Shareholders
and any broker-dealer participating in the distribution of the shares may be deemed to be “underwriters” within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate amount of Ordinary Shares being offered and the terms
of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting
compensation from the Selling Shareholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws
of some states, the Ordinary Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in
some states, the Ordinary Shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
There can be no assurance
that any Selling Shareholder will sell any or all of the Ordinary Shares registered pursuant to the registration statement, of which this
prospectus forms a part.
The Selling Shareholders and
any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations
thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any
of the shares by the Selling Shareholders and any other participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the Ordinary Shares to engage in market-making activities with respect to the shares. All of the foregoing
may affect the marketability of the Ordinary Shares and the ability of any person or entity to engage in market-making activities with
respect to the Ordinary Shares.
We will pay all expenses of
the registration of the Ordinary Shares, estimated to be $46,741 in total, including, without limitation, SEC filing fees and expenses
of compliance with state securities or “blue sky” laws; provided, however, that a Selling Shareholder will pay all underwriting
discounts and selling commissions if any. We will indemnify the Selling Shareholders against liabilities, including some liabilities under
the Securities Act, or the Selling Shareholders will be entitled to contribution. We may be indemnified by the Selling Shareholders against
civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the
Selling Shareholders specifically for use in this prospectus, or we may be entitled to contribution.
Once sold under the registration
statement, of which this prospectus forms a part, the Ordinary Shares will be freely tradable in the hands of persons other than our affiliates.
DESCRIPTION
OF SHARE CAPITAL
Class A and Class B Ordinary Shares
General
The Memorandum and
Articles of Association authorize the issuance of a maximum of 100,000,000 Class A Ordinary Shares, 100 Class B
Ordinary Shares and 1,000,000 preferred shares with no par value (“Preferred Shares”). As of September
4, 2024, we have 10,149,386 shares of Class A Ordinary Shares outstanding, no Class B Ordinary Shares outstanding, and no Preferred
Shares outstanding. All of our outstanding Class A Ordinary Shares at the time of the closing of this offering, will be, validly
issued, and fully paid. Our Class A Ordinary Shares and Class B Ordinary Shares are not redeemable and are not subject to any
preemptive right.
Dividends.
The holders of our Class A
Ordinary Shares and Class B Ordinary Shares are entitled to an equal share, for each share held, in any dividend paid by the Company.
Voting Rights.
Subject to the rights of the
Preferred Shares’ holders, in respect of all matters subject to a member’s vote, each Class A Ordinary Share and Class B Ordinary
Share is entitled to one vote at a meeting of the members or on any resolution of members.
Distributions.
The holders of the Class A
Ordinary Shares and Class B Ordinary Shares each have a right to an equal share with each other in the distribution of the surplus assets
of the Company on the Company’s liquidation.
Preferred Shares
Subject to applicable
law and the Memorandum and Articles of Association, the Board of Directors may issue Preferred Shares with such preferred rights as
they shall determine. The rights, privileges, restrictions and conditions attaching to the Preferred Shares shall be stated in the
Memorandum and Articles of Association, which shall be amended accordingly prior to the issue of such Preferred Shares.
TAXATION
The following is a general
summary of the material U.S. federal income tax consequences relevant to an investment in our Ordinary Shares. The discussion is not intended
to be, nor should it be construed as, legal or tax advice to any particular prospective purchaser. The discussion is based on laws and
relevant interpretations thereof as of the date of this annual report, all of which are subject to change or different interpretations,
possibly with retroactive effect. The discussion does not address U.S. state or local tax laws. You should consult your own tax advisors
with respect to the consequences of acquisition, ownership and disposition of our Ordinary Shares.
This discussion is based
on provisions of the Code, the Treasury Regulations promulgated thereunder (whether final, temporary, or proposed), administrative rulings
of the IRS, and judicial decisions, all as in effect on the date hereof, and all of which are subject to differing interpretations or
change, possibly with retroactive effect. This discussion does not purport to be a complete analysis or listing of all potential U.S. federal
income tax considerations that may apply to a securityholder of the Company as a result of the ownership and disposition of the Company
Securities. In addition, this discussion does not address all aspects of U.S. federal income taxation that may be relevant to particular
holders nor does it take into account the individual facts and circumstances of any particular holder that may affect the U.S. federal
income tax consequences to such holder, and accordingly, is not intended to be, and should not be construed as, tax advice. This discussion
does not address the U.S. federal 3.8% Medicare tax imposed on certain net investment income or any aspects of U.S. federal
taxation other than those pertaining to the income tax, nor does it address any tax consequences arising under any U.S. state and
local, or non-U.S. tax laws, or, except as discussed here, any tax reporting obligations of a holder of the Company Securities. Holders
should consult their own tax advisors regarding such tax consequences in light of their particular circumstances.
No ruling has been requested
or will be obtained from the IRS regarding the U.S. federal income tax consequences discussed below; thus, there can be no assurance
that the IRS will not challenge the U.S. federal income tax treatment described below or that, if challenged, such treatment will
be sustained by a court.
This summary is limited to
considerations relevant to U.S. Holders that hold the Company Securities as “capital assets” within the meaning of section
1221 of the Code (generally, property held for investment). This discussion does not address all aspects of U.S. federal income taxation
that may be important to holders in light of their individual circumstances, including holders subject to special treatment under the
U.S. tax laws, such as, for example:
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banks or other financial institutions, underwriters, or insurance companies; |
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traders in securities who elect to apply a mark-to-market method of accounting; |
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real estate investment trusts and regulated investment companies; |
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tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax- deferred accounts; |
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expatriates or former citizens or long-term residents of the United States; |
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subchapter S corporations, partnerships or other pass-through entities or investors in such entities; |
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any holder that is not a U.S. Holder; |
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dealers or traders in securities, commodities or currencies; |
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persons subject to the alternative minimum tax; |
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U.S. persons whose “functional currency” is not the U.S. dollar; |
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persons who receive stock of the Company through the issuance of restricted share under an incentive plan or through a tax-qualified retirement plan or otherwise as compensation; |
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U.S. shareholders of controlled foreign corporations, as those terms are defined in Sections 951(b) and 957(a), respectively; |
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persons who own (directly or through attribution) 5% or more (by vote or value) of the outstanding Class A Ordinary Shares (excluding treasury shares); |
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holders holding ASCA securities, or, after the Business Combination, the Company Securities, as a position in a “straddle,” as part of a “synthetic security” or “hedge,” as part of a “conversion transaction,” or other integrated investment or risk reduction transaction. |
As used in this prospectus,
the term “U.S. Holder” means a beneficial owner of the Company Securities, that is, for U.S. federal income tax
purposes:
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an individual who is a citizen or resident of the United States; |
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a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States or any State thereof or the District of Columbia; |
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an estate the income of which is subject to U.S. federal income tax regardless of its source; or |
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a trust (i) if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes. |
If a partnership, including
for this purpose any entity or arrangement that is treated as a partnership for U.S. federal income tax purposes, holds the Company
Securities, the U.S. federal income tax treatment of a partner in such partnership will generally depend on the status of the partner
and the activities of the partnership. A holder that is a partnership and the partners in such partnership should consult their own tax
advisors with regard to the U.S. federal income tax consequences of ownership and disposition of the Company Securities.
THIS SUMMARY DOES NOT PURPORT
TO BE A COMPREHENSIVE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF OWNERSHIP AND DISPOSITION
OF THE COMPANY SECURITIES. IN ADDITION, THE U.S. FEDERAL INCOME TAX TREATMENT OF THE BENEFICIAL OWNERS OF THE COMPANY SECURITIES
MAY BE AFFECTED BY MATTERS NOT DISCUSSED HEREIN AND DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX
PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. HOLDERS OF THE COMPANY
SECURITIES SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF
THE COMPANY SECURITIES, INCLUDING THE APPLICABILITY AND EFFECTS OF U.S. FEDERAL, STATE, LOCAL, AND OTHER TAX LAWS.
Distribution on the Class A Ordinary Shares
Subject to the PFIC rules
discussed below “— Passive Foreign Investment Company Status,” the gross amount of any distribution on the Class
A Ordinary Shares that is made out of the Company’s current and accumulated earnings and profits (as determined for U.S. federal
income tax purposes) will generally be taxable to a U.S. Holder as ordinary dividend income on the date such distribution is actually
or constructively received by such U.S. Holder. Any such dividends paid to corporate U.S. Holders generally will not qualify
for the dividends-received deduction that may otherwise be allowed under the Code.
Dividends received by non-corporate
U.S. Holders, including individuals, from a “qualified foreign corporation” may be eligible for reduced rates of taxation,
provided that certain holding period requirements and other conditions are satisfied. For these purposes, a non-U.S. corporation
will be treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares that are readily tradable
on an established securities market in the United States. U.S. Treasury Department guidance indicates that shares listed on
Nasdaq will be considered readily tradable on an established securities market in the United States. Even if the Class A Ordinary
Shares are listed on Nasdaq, there can be no assurance that the Class A Ordinary Shares will be considered readily tradable on an established
securities market in future years. Non-corporate U.S. Holders that do not meet a minimum holding period requirement or that
elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code (dealing with the
deduction for investment interest expense) will not be eligible for the reduced rates of taxation regardless of the Company’s status
as a qualified foreign corporation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated
to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the
minimum holding period has been met. Finally, the Company will not constitute a qualified foreign corporation for purposes of these rules
if it is a PFIC for the taxable year in which it pays a dividend or for the preceding taxable year. See the discussion below under “— Passive
Foreign Investment Company Status.
The amount of any dividend
paid in foreign currency will be the U.S. dollar value of the foreign currency distributed by the Company, calculated by reference
to the exchange rate in effect on the date the dividend is includible in the U.S. Holder’s income, regardless of whether the
payment is in fact converted into U.S. dollars on the date of receipt. Generally, a U.S. Holder should not recognize any foreign
currency gain or loss if the foreign currency is converted into U.S. dollars on the date the payment is received. However, any gain
or loss resulting from currency exchange fluctuations during the period from the date the U.S. Holder includes the dividend payment
in income to the date such U.S. Holder actually converts the payment into U.S. dollars will be treated as ordinary income or
loss. That currency exchange income or loss (if any) generally will be income or loss from U.S. sources for foreign tax credit limitation
purposes.
To the extent that the amount
of any distribution made by the Company on the Class A Ordinary Shares exceeds the Company’s current and accumulated earnings and
profits for a taxable year (as determined under U.S. federal income tax principles), the distribution will first be treated as a
tax-free return of capital, causing a reduction in the adjusted basis of the U.S. Holder’s the Class A Ordinary Shares, and
to the extent the amount of the distribution exceeds the U.S. Holder’s tax basis, the excess will be taxed as capital gain
recognized on a sale or exchange as described below under “— Sale, Exchange, Redemption or Other Taxable Disposition
of the Company Securities.”
Sale, Exchange, Redemption or Other Taxable Disposition of the Company
Securities
Subject to the discussion
below under “— Passive Foreign Investment Company Status,” a U.S. Holder will generally recognize gain or
loss on any sale, exchange, redemption, or other taxable disposition of the Class A Ordinary Shares and the Warrants in an amount equal
to the difference between the amount realized on the disposition and such U.S. Holder’s adjusted tax basis in such the Class
A Ordinary Shares or Warrants. Any gain or loss recognized by a U.S. Holder on a taxable disposition of the Class A Ordinary Shares
or Warrants will generally be capital gain or loss and will be long-term capital gain or loss if the holder’s holding period in
the Class A Ordinary Shares or Warrants exceeds one year at the time of the disposition. Preferential tax rates may apply to long-term
capital gains of non-corporate U.S. Holders (including individuals). The deductibility of capital losses is subject to limitations.
Any gain or loss recognized by a U.S. Holder on the sale or exchange of the Class A Ordinary Shares or the Warrants will generally
be treated as U.S. source gain or loss.
Exercise or Lapse of a Warrant
Except as discussed below
with respect to the cashless exercise of a Warrant, a U.S. Holder generally will not recognize gain or loss upon the acquisition
of an ordinary share of the Company on the exercise of a Warrant for cash. A U.S. Holder’s tax basis in an ordinary share received
upon exercise of the Warrant generally will be an amount equal to the sum of the U.S. Holder’s tax basis in the Warrant exchanged
therefor and the exercise price. The U.S. Holder’s holding period for an ordinary share received upon exercise of the Warrant
will begin on the date following the date of exercise (or possibly the date of exercise) of the Warrants and will not include the period
during which the U.S. Holder held the Warrants. If a Warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize
a capital loss equal to such holder’s tax basis in the Warrant.
The tax consequences of a
cashless exercise of a warrant are not clear under current tax law. A cashless exercise may be tax-free, either because the exercise is
not a gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either
tax-free situation, a U.S. Holder’s basis in the Class A Ordinary Shares received would equal the holder’s basis in the
Warrant. If the cashless exercise were treated as not being a gain recognition event, a U.S. Holder’s holding period in the
Class A Ordinary Shares would be treated as commencing on the date following the date of exercise (or possibly the date of exercise) of
the Warrant. If the cashless exercise were treated as a recapitalization, the holding period of the Class A Ordinary Share would include
the holding period of the Warrant.
It is also possible that
a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder
would recognize gain or loss with respect to the portion of the exercised Warrants treated as surrendered to pay the exercise price of
the Warrants (the “surrendered warrants”). The U.S. Holder would recognize capital gain or loss with respect to the surrendered
warrants in an amount generally equal to the difference between (i) the fair market value of the Class A Ordinary Shares that would
have been received with respect to the surrendered warrants in a regular exercise of the Warrants and (ii) the sum of the U.S. Holder’s
tax basis in the surrendered warrants and the aggregate cash exercise price of such warrants (if they had been exercised in a regular
exercise). In this case, a U.S. Holder’s tax basis in the Class A Ordinary Shares received would equal the U.S. Holder’s
tax basis in the Warrants exercised plus (or minus) the gain (or loss) recognized with respect to the surrendered warrants. A U.S. Holder’s
holding period for the Class A Ordinary Shares would commence on the date following the date of exercise (or possibly the date of exercise)
of the Warrant.
Due to the absence of authority
on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax
consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should
consult their tax advisors regarding the tax consequences of a cashless exercise.
Passive Foreign Investment Company Status
Certain adverse U.S. federal
income tax consequences could apply to a U.S. Holder if the Company or any of its subsidiaries is treated as a PFIC for any taxable
year during which the U.S. Holder holds the Company Securities. A non-U.S. corporation will be classified as a PFIC for any
taxable year (a) if at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any entity
in which it is considered to own at least 25% of the interest by value, is passive income, or (b) if at least 50% of its assets in
a taxable year of the foreign corporation, ordinarily determined based on fair market value and averaged quarterly over the year, including
its pro rata share of the assets of any entity in which it is considered to own at least 25% of the interest by value, are held for the
production of, or produce, passive income. 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 the Company is not a PFIC
in the 2024 taxable year, such U.S. Holder would likely recognize gain (but not loss if the Reincorporation Merger qualifies as a
“reorganization”) upon the exchange of ASCA securities for The Company securities pursuant to the Reincorporation Merger.
The gain (or loss) would be computed as described above under “— If the Reincorporation Merger Does Not Qualify as a
Reorganization.” Any such gain recognized by such U.S. Holder on the exchange of ASCA securities for The Company securities
would be allocated ratably over the U.S. Holder’s holding period for the ASCA securities. Such amounts allocated for the current
taxable year and any taxable year prior to the first taxable year in which ASCA was a PFIC would be treated as ordinary income, and not
as capital gain, in the U.S. Holder’s taxable year, and such amounts allocated to each other taxable year beginning with the
year that ASCA became a PFIC would be taxed at the highest tax rate in effect for each year to which the gain was allocated, together
with a special interest charge on the tax attributable to each such year.
Whether the Company is a
PFIC for any taxable year is a factual determination that depends on, among other things, the composition of the Company’s income
and assets, the market value of its assets, and potentially the composition of the income and assets of one or more of the Company’s
subsidiaries and the market value of their assets in that year. Whether a Company subsidiary is a PFIC for any taxable year is likewise
a factual determination that depends on, among other things, the composition of the subsidiary’s income and assets and the market
value of such assets in that year. One or more changes in these factors may cause the Company and/or one or more of its subsidiaries to
become a PFIC for a taxable year even though it has not been a PFIC for one or more prior taxable years. Whether the Company or a subsidiary
is treated as a PFIC for U.S. federal income tax purposes is a factual determination that must be made annually at the close of each
taxable year and, thus, is subject to significant uncertainty. Moreover, there can be no assurance that the Company will timely provide
a PFIC annual information statement for 2024 or going forward. The failure to provide such information on an annual basis could preclude
U.S. Holders from making or maintaining a “qualified electing fund” election under Section 1295 of the Code.
If the Company were determined
to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of Class A Ordinary
Shares, the U.S. Holder did not make a valid “mark-to-market” election, such U.S. Holder generally will be subject
to special rules with respect to:
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any gain recognized by the U.S. Holder on the sale or other disposition of the Company Securities (including a redemption treated as a sale or exchange); and |
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any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Class A Ordinary Shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for such ordinary shares). |
Under these rules:
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the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s Company Securities; |
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the amount allocated to the U.S. Holder’s taxable year in which the U.S. holder recognized gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of the Company’s first taxable year in the Company is a PFIC, will be taxed as ordinary income; |
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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and |
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the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder. |
Although a determination
as to the Company’s PFIC status will be made annually, an initial determination that the Company is a PFIC will generally apply
for subsequent years to a U.S. Holder who held Company Securities while the Company was a PFIC, whether or not the Company meets
the test for PFIC status in those subsequent years.
If a U.S. Holder, at
the close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make a mark-to-market
election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election for the first
taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) the Class A Ordinary Shares and for which
the Company is determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect to
the Class A Ordinary Shares as long as such shares continue to be treated as marketable stock. Instead, in general, the U.S. Holder
will include as ordinary income each year that the Company is treated as a PFIC the excess, if any, of the fair market value of its Class
A Ordinary Shares at the end of its taxable year over the adjusted basis in its Class A Ordinary Shares. The U.S. Holder also will
be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its Class A Ordinary Shares over the fair
market value of its Class A Ordinary Shares at the end of its taxable year (but only to the extent of the net amount of previously recognized
income as a result of the mark-to-market election). The U.S. Holder’s adjusted tax basis in its Class A Ordinary Shares will
be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of the
Class A Ordinary Shares in a taxable year in which the Company is treated as a PFIC will be treated as ordinary income. Special tax rules
may also apply if a U.S. Holder makes a mark-to-market election for a taxable year after the first taxable year in which the U.S. Holder
holds (or is deemed to hold) its Class A Ordinary Shares and for which the Company is treated as a PFIC. Currently, a mark-to-market
election may not be made with respect to the Warrants.
The mark-to-market election
is available only for stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq
(on which the Company Securities are traded), or on a foreign exchange or market that the IRS determines has rules sufficient to
ensure that the market price represents a legitimate and sound fair market value. Such stock generally will be “regularly traded”
for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar
quarter, but no assurances can be given in this regard with respect to the Class A Ordinary Shares. U.S. Holders should consult their
own tax advisors regarding the availability and tax consequences of a mark-to-market election in respect of the Class A Ordinary Shares
under their particular circumstances.
If the Company is a PFIC
and, at any time, has a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion
of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if
the Company were to receive a distribution from, or dispose of all or part of the Company’s interest in, the lower-tier PFIC (even
though such U.S. Holder would not receive the proceeds of those distributions or dispositions) or the U.S. Holders otherwise
were deemed to have disposed of an interest in the lower-tier PFIC. A mark-to-market election generally would not be available with
respect to such lower-tier PFIC. U.S. Holders are urged to consult their own tax advisors regarding the tax issues raised by
lower-tier PFICs.
A U.S. Holder that owns
(or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether
or not a mark-to-market election is or has been made) with such U.S. Holder’s U.S. federal income tax return and provide
any such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute
of limitations until such required information is furnished to the IRS.
The rules dealing with
PFICs and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly,
U.S. Holders of Company Securities should consult their own tax advisors concerning the application of the PFIC rules to the
Company Securities under the U.S. Holders’ particular circumstances.
Information Reporting and Backup Withholding
In general, information reporting
requirements may apply to dividends received by U.S. Holders of the Class A Ordinary Shares (including constructive dividends), and
the proceeds received on sale or other taxable disposition of the Class A Ordinary Shares or Warrants effected within the United States
(and, in certain cases, outside the United States), in each case, other than U.S. Holders that are exempt recipients (such as
corporations). Backup withholding (currently at a rate of 24%) may apply to such amounts if the U.S. Holder fails to provide an accurate
taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent or the U.S. Holder’s broker)
or is otherwise subject to backup withholding.
Certain U.S. Holders
holding specified foreign financial assets with an aggregate value in excess of the applicable dollar threshold are required to report
information to the IRS relating to the Company Securities, subject to certain exceptions (including an exception for the Company Securities
held in accounts maintained by U.S. financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign
Financial Assets, with their tax return, for each year in which they hold the Company Securities. In addition to these requirements, U.S. Holders
may be required to annually file FinCEN Report 114 (Report of Foreign Bank and Financial Accounts) with the U.S. Department of Treasury.
U.S. Holders should consult their own tax advisors regarding information reporting requirements relating to their ownership of the
Company Securities.
Backup withholding is not
an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or credit against a holder’s
U.S. federal income tax liability, if any, provided the required information is timely furnished to the IRS.
This summary does not contain a detailed description
of all the United States federal income tax consequences that may be applicable to you in light of your particular circumstances and,
except as set forth below with respect to PRC tax considerations, does not address the effects of any state, local or non-United States
tax laws. If you are considering the purchase, ownership or disposition of our Ordinary Shares, you should consult your own tax advisors
concerning the United States federal income tax consequences to you in light of your particular situation as well as any consequences
arising under the laws of any other taxing jurisdiction.
LEGAL MATTERS
Certain legal matters as to
U.S. federal securities law concerning this offering will be passed upon for us by Sichenzia Ross Ference Carmel LLP, New York, New York.
Certain legal matters as to BVI law will be passed upon for us by Ogier. Sichenzia Ross Ference Carmel LLP may rely upon Ogier with respect
to matters governed by BVI law.
EXPERTS
The financial statements
of NewGenIvf Limited as of December 31, 2023 and for the year then ended included in this prospectus have been so included in
reliance on the report of Onestop Assurance PAC, an independent registered public accounting firm, given on the authority of said
firm as an expert in auditing and accounting. The financial statements of NewGenIvf Limited as of December 31, 2022 and 2021and for
the years then ended included in this prospectus have been so included in reliance on the report of WWC, P.C., an independent
registered public accounting firm, given on the authority of said firm as an expert in auditing and accounting.
EXPENSES
The following are the estimated
expenses of the issuance and distribution of the securities being registered under the registration statement of which this prospectus
forms a part, all of which will be paid by us. With the exception of the SEC registration fee, all amounts are estimates and may change:
SEC registration fee | |
$ | 740.54 | |
Printer fees and expenses | |
$ | 1,000 | * |
Legal fees and expenses | |
$ | 40,000 | |
Miscellaneous | |
$ | 5,000 | * |
Total | |
$ | 46,741 | |
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under
the laws of the British Virgin Islands with limited liability. We are incorporated in the British Virgin Islands because of certain benefits
associated with being a British Virgin Islands company, such as political and economic stability, an effective judicial system, a favorable
tax system, the absence of exchange control or currency restrictions and the availability of professional and support services. However,
the British Virgin Islands has a less developed body of securities laws as compared to the United States and provides protections for
investors to a lesser extent. In addition, British Virgin Islands companies may not have standing to sue before the federal courts of
the United States.
Substantially all of our assets
are located outside the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries
other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As
a result, it may be difficult for investors to effect service of process within the United States upon us or such persons or to enforce
against them or against us, judgments obtained in United States courts, including judgments predicated upon the civil liability provisions
of the securities laws of the United States or any state thereof.
We have appointed Cogency
Global Inc., as our agent to receive service of process with respect to any action brought against us in the United States District Court
for districts in the State of New York under the federal securities laws of the United States or of any State of the United States or
any action brought against us in the Supreme Court of the State of New York under the securities laws of the State of New York.
There is no statutory enforcement
in the British Virgin Islands of judgments obtained in the U.S., however, the courts of the British Virgin Islands will in certain circumstances
recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no
retrial of the issues would be necessary, provided that:
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the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process; |
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the judgment is final and for a liquidated sum; |
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the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; |
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in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court; |
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recognition or enforcement of the judgment in the British Virgin Islands would not be contrary to public policy; and |
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the proceedings pursuant to which judgment was obtained were not contrary to natural justice. |
The British Virgin Islands courts are unlikely:
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to recognize or enforce against the Company, judgments of courts of the U.S. based on certain civil liability provisions of U.S. securities laws where that liability is in respect of penalties,
taxes, fines or similar fiscal or revenue obligations of the company; and |
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to impose liabilities against the Company, in original actions brought in the British Virgin Islands, based on certain civil liability provisions of U.S.
securities laws that are penal in nature. |
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC
a registration statement on Form F-1 under the Securities Act relating to this registration of the Ordinary Shares to be sold by
the Selling Shareholders, or the Registration Statement. This prospectus, which is part of the Registration Statement, does not contain
all of the information contained in the Registration Statement. The rules and regulations of the SEC allow us to omit certain information
from this prospectus that is included in the Registration Statement. Statements made in this prospectus concerning the contents of any
contract, agreement or other document are summaries of all material information about the documents summarized, but are not complete descriptions
of all terms of these documents. If we filed any of these documents as an exhibit to the Registration Statement, you may read the document
itself for a complete description of its terms.
The SEC also maintains an
Internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with
the SEC are also available to the public through the SEC’s website at www.sec.gov.
We are not currently subject
to the information reporting requirements of the Exchange Act. In connection with when the Registration Statement is declared effective
by the SEC, we will become subject to the information reporting requirements of the Exchange Act that are applicable to foreign private
issuers. Accordingly, we will be required to file or furnish reports and other information with the SEC. Those other reports or other
information may be inspected without charge at the locations described above. As a foreign private issuer, we are exempt from the rules under
the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are
exempt from the reporting and 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 annual, quarterly, and current reports and financial statements with the SEC as frequently
or as promptly as United States companies whose securities are registered under the Exchange Act. However, we will file with the SEC,
within 120 days after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F
containing financial statements audited by an independent registered public accounting firm, and intend to submit to the SEC, on Form 6-K,
unaudited interim financial information.
We maintain a corporate website
at www.newgenivf.com. Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus.
We have included our website address in this prospectus solely as an inactive textual reference. We will post on our website any materials
required to be so posted on such website under applicable corporate or securities laws and regulations, including, posting any XBRL interactive
financial data required to be filed with the SEC and any notices of general meetings of our shareholders.
MATERIAL CHANGES
Except as otherwise described
in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, and our current reports on Form 6-K filed
or submitted under the Exchange Act and incorporated by reference herein and as disclosed in this prospectus, no reportable material changes
have occurred since December 31, 2023.
INCORPORATION BY REFERENCE
The
SEC allows us to incorporate by reference much of the information that we file with the SEC, which means that we can disclose important
information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus
is considered to be part of this prospectus. This prospectus incorporates by reference the documents listed below (other than any portions
of such documents that are not deemed “filed” under the Exchange Act in accordance with the Exchange Act and applicable SEC
rules):
Any
information contained in this prospectus or in any document incorporated by reference in this prospectus will be deemed to be modified
or superseded to the extent that a statement contained in any prospectus supplement or free writing prospectus provided to you by us modifies
or supersedes the original statement.
The
reports and documents incorporated by reference into this prospectus are available to the public free of charge on the investor relations
portion of our website located at www.newgenivf.com. You may also request a copy of these filings, at no cost, by writing to us
at the following addresses:
NewGenIvf Group Limited
1/F, Pier 2, Central
Hong Kong, 999077
Tel: +1 (212) 537-4406
Email: alfred.siu@newgenivf.com
5,912,281 Ordinary Shares
NewGenIvf Group Limited
PROSPECTUS
,
2024
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors, Officers
and Employees
British Virgin Islands
law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of
officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to
public policy, such as to provide indemnification against willful default, civil fraud or the consequences of committing a crime.
Under our Memorandum and Articles of Association, we may indemnify its directors, officers and liquidators against all expenses,
including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with
civil, criminal, administrative or investigative proceedings to which they are party or are threatened to be made a party by reason
of their acting as our director, officer or liquidator. To be entitled to indemnification, these persons must have acted honestly
and in good faith with a view to the best interest of the registrant and, in the case of criminal proceedings, they must have had no
reasonable cause to believe their conduct was unlawful.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the
foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 7. Recent Sales of Unregistered Securities
Set forth below are the sales
of all securities by the Company since the closing of the Business Combination which were not registered under the Securities Act. The
Company believes that each of such issuances was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of
the Securities Act.
On April 3, 2024, the date
of Closing, the Company issued to JAK Opportunities VI LLC 295,000 Ordinary Shares which were converted from the ordinary shares of Legacy
NewGenIvf pursuant to the terms of the Securities Purchase Agreement by and between A SPAC I Mini Acquisition Corp. and JAK Opportunities
VI LLC on February 29, 2024. Pursuant to this Securities Purchase Agreement, A SPAC I Mini Acquisition Corp agreed to issue and sell to
JAK Opportunities VI LLC, in a private placement, an aggregate of up to $3,500,000 principal amount of convertible notes, consisting of
one or more tranches: (i) an initial tranche of an aggregate principal amount of promissory notes of up to $1,750,000 and including an
original issue discount of up to aggregate $122,500, and (ii) subsequent tranches of an aggregate principal amount of promissory notes
of up to $1,750,000 and including an original issue discount of up to aggregate $122,500. The closing of the Initial Tranche took place
on April 3, 2024. The Company also closed on a subsequent tranche of the aforementioned promissory notes in the principal amount of $250,000
by issuing and selling to JAK Opportunities VI LLC shortly after the closing of the Business Combination, resulting in an aggregate principal
amount of notes of $2,000,000 sold to JAK Opportunities VI LLC. The form of these promissory notes is included as Exhibit 4.2 of the Form
6-K filed on April 4, 2024. The aforementioned Securities Purchase Agreement is included as Exhibit 4.1 of the Form 6-K filed on April
4, 2024.
2024 Debt Financing
On August 7, 2024, the Company
entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with certain investors named therein (collectively,
the “Buyers”), pursuant to which, amongst other things: (i) the Company agreed to sell, at an initial closing with JAK Opportunities
VI LLC (and such initial closing, the “Initial Closing”), (a) a senior convertible note (the “Initial Note”) in
the aggregate original principal amount not exceeding $1,100,000 and convertible into a maximum of 1,417,832 Ordinary Shares pursuant
to its terms), (b) a warrant to purchase 1,325,301 Ordinary Shares (such warrant, the “Series A Warrant:), and (c) a warrant to
purchase 180,722 Class B Ordinary Shares, no par value (the “Series B Warrant,” and the Series B Warrants, together with the
Series A Warrants, the “Warrants”); and (ii) the Company may require each Buyer (or each Buyer may require the Company, as
applicable) to participate in the sale of (a) one or more additional convertible notes (which aggregate original principal amount for
all additional convertible notes shall not exceed $9,500,000) (the “Additional Notes,” and, together with the Initial Note,
the “Notes”). The Securities Purchase Agreement is filed as Exhibit 4.1 of the Company’s current report on Form 6-K
dated August 16, 2024 and is incorporated by reference herein. The Initial Note is filed as Exhibit 10.25 of this registration statement.
Additionally, in connection
with the Securities Purchase Agreement, the Company entered into amendment and exchange agreements with certain holders of its convertible
promissory notes (the “Existing Notes” and each of such amendment and exchange agreements, “Amendment and Exchange Agreement”),
pursuant to which the Company exchanged the Existing Notes by issuing, among other things, (i) senior convertible notes in the aggregate
principal amount of $2,700,000 (the “Exchange Notes”) and (b) a series of warrants to initially acquire up to a certain number
of ordinary shares to the holders of the Existing Notes set forth therein or in the Amendment and Exchange Agreement (the “Exchange
Warrants”). The form of the Amendment and Exchange Agreement, the form of Exchange Notes, and the form of Exchange Warrants are
filed as Exhibits 4.2, 4.3, and 4.4 to the Form 6-K dated August 16, 2024, and are incorporated herein by reference.
Initial Closing
On August 12, 2024, the Company
and JAK Opportunities VI LLC consummated the Initial Closing. The Initial Note sold to JAK in connection with the Securities Purchase
Agreement bears an interest rate of 14.75% per annum and is convertible into the Company’s Ordinary Shares as follows: the Conversion
Amount (as defined below) into validly issued, fully paid and non-assessable Class A at the Conversion Rate (as defined below). No fractional
Class A Shares are issuable upon any such conversion. The form of the Initial Note is included as Exhibit A of the Securities Purchase
Agreement filed as Exhibit 4.1 in the Form 6-K dated August 15, 2024.
“Conversion Amount”
means 110% of the sum of (A) the portion of the principal of the Initial Note, (B) accrued and unpaid interest with respect to such principal
owed on the Initial Note (and as reduced pursuant to the of the Initial Note pursuant to redemption, conversion or otherwise, the “Principal”)
(C) the Make-Whole Amount, if any, (D) accrued and unpaid Late Charges (as defined below) with respect to the Principal on the Initial
Note, Make-Whole Amount and Interest, and (E) any other unpaid amounts pursuant to the Transaction Documents, as may be amended from time
to time., if any.
“Conversion Rate”
means the amount of Ordinary Shares issuable upon conversion of any Conversion Amount pursuant to the Initial Note determined by dividing
(x) such Conversion Amount by (y) the Conversion Price.
“Conversion Price” means, as of any
Conversion Date or other date of determination, $0.83, subject to adjustment as provided in the Initial Note.
“Late Charge”
means a late charge incurred and payable by the Company in an amount equal to interest on such amount at the rate of eighteen percent
(18%) per annum from the date such amount was due until the same is paid in full, if “Make-Whole Amount” means, as of any
given date and as applicable, in connection with any conversion, redemption or other repayment hereunder, an amount equal to the amount
of additional interest that would accrue under the Initial Note at the interest rate then in effect assuming for calculation purposes
that the outstanding Principal of the Initial Note as of the closing date remained outstanding through and including the maturity date.
“Make-Whole Amount”
means, as of any given date and as applicable, in connection with any conversion, redemption or other repayment under the Initial Note,
an amount equal to the amount of additional interest that would accrue under the Initial Note at the interest rate then in effect assuming
for calculation purposes that the outstanding Principal of the Initial Note as of the Closing Date remained outstanding through and including
the maturity date.
At the Initial Closing, the
Company also sold to JAK Opportunities VI LLC a Series A Warrant to purchase 1,325,301 Class A Shares and a Series B Warrant to purchase
180,722 Class B Shares. The form of the Series A Warrant and form of the Series B Warrant are included as Exhibit B of the Securities
Purchase Agreement included as Exhibit 4.1 in the Form 6-K filed on August 16, 2024, which is incorporate herein by reference.
Second Tranche
On August 28, 2024, the Company
closed on the second tranche of the 2024 Debt Financing pursuant to the terms of the Securities Purchase Agreement. Under the second tranche,
the Company sold a senior convertible promissory note to JAK Opportunities VI LLC in the principal amount of $500,000. This promissory
note bears an interest rate of 14.75% per annum and is convertible into a maximum of 875,658 Ordinary Shares pursuant to its terms. This
promissory note is included as Exhibit 4.1 in the Form 6-K filed on August 30, 2024.
Financial Statement Schedules:
All financial statement schedules
have been omitted because either they are not required, are not applicable or the information required therein is otherwise set forth
in the Company’s financial statements and related notes thereto.
Item 8. Exhibits and Financial Statement Schedules
Exhibit No. |
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Description |
3.1 |
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Amended and Restated Memorandum and Articles of Association of PubCo (incorporated by reference to Annex B of PubCo’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
4.1 |
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Specimen Class A Ordinary Share Certificate of the Company (incorporated by reference to Exhibit 2.1 of the report on Form 20-F filed with the Securities and Exchange Commission on April 9, 2024) |
4.2 |
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Specimen Warrant Certificate of the Company (incorporated by reference to Exhibit 2.2 of the report on Form 20-F filed with the Securities and Exchange Commission on April 9, 2024) |
4.3 |
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Warrant Agreement, dated February 14, 2022, by and between ASCA and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.2 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on February 18, 2022) |
4.4 |
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Form of Assumption of Warrant Agreement (incorporated by reference to Exhibit 4.7 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
5.1** |
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Opinion of Ogier |
10.1 |
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Merger Agreement, dated as of February 15, 2023, by and among ASCA, NewGenIvf Limited, certain shareholders of NewGenIvf Limited, A SPAC I Mini Acquisition Corp., and A SPAC I Mini Sub Acquisition Corp. (incorporated by reference to Exhibit 2.1 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on February 16, 2023) |
10.2 |
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First Amendment to the Merger Agreement, dated June 12, 2023, by and among ASCA, NewGenIvf Limited, Principal Shareholders, A SPAC I Mini Acquisition Corp. and A SPAC I Mini Sub Acquisition Corp. (incorporated by reference to Exhibit 2.1 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on June 13, 2023) |
10.3 |
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Second Amendment to the Merger Agreement, dated December 6, 2023, by and among ASCA, NewGenIvf Limited, Principal Shareholders, A SPAC I Mini Acquisition Corp. and A SPAC I Mini Sub Acquisition Corp. (incorporated by reference to Exhibit 2.1 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on December 6, 2023) |
10.4 |
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Third Amendment to the Merger Agreement, dated March 1, 2024, by and among ASCA, NewGenIvf Limited, Principal Shareholders, A SPAC I Mini Acquisition Corp. and A SPAC I Mini Sub Acquisition Corp. (incorporated by reference to Exhibit 2.1 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on March 6, 2024) |
10.5 |
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Stock Escrow Agreement, dated February 14, 2022 by and between ASCA and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.5 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on February 18, 2022) |
10.6 |
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Voting and Support Agreement, dated as of February 15, 2023, by and among A SPAC I Acquisition Corp., A SPAC I Mini Acquisition Corp., NewGenIvf Limited, and certain shareholders of NewGenIvf Limited (incorporated by reference to Exhibit 10.1 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on February 16, 2023) |
10.7 |
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Form of Amended and Restated Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on February 16, 2023) |
10.8 |
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Form of Lock-Up Agreement (incorporated by reference to exhibit 4.8 of the Company’s report on Form 20-F filed with the SEC on April 9, 2024) |
10.9 |
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Securities Purchase Agreement, dated February 29, 2024, by and among ASCA, The Company, Legacy NewGenIvf, the Buyers and Merger Sub (incorporated by reference to Exhibit 10.1 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on March 6, 2024) |
10.10 |
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Form of Note between The Company and the Buyers (incorporated by reference to Exhibit 10.2 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on March 6, 2024) |
10.11 |
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Acknowledgement Agreement, dated March 1, 2024, by and among ASCA, Legacy NewGenIvf and Chardan (incorporated by reference to Exhibit 10.3 to ASCA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on March 6, 2024) |
10.12 |
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Power Generator Lease Contract, dated January 10, 2021, between BD & H TECH Co., LTD. and First Fertility Phnom Penh Ltd (English Translation) (incorporated by reference to Exhibit 10.19 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.13 |
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Property Lease Contract, dated June 22, 2020, between SOK HEANG and First Fertility Phnom Penh Ltd (English Translation) (incorporated by reference to Exhibit 10.20 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.14 |
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MicroSort Lease and Services Agreement, dated March 29, 2019, between First Fertility Phnom Penh Ltd and MicroSort International (incorporated by reference to Exhibit 10.21 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.15 |
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Management and Administrative Services Agreement, dated November 1, 2022, between First Fertility PGS Center Ltd and Med Holdings Ltd (incorporated by reference to Exhibit 10.22 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.16 |
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MicroSort Lease and Services Agreement, dated April, 8, 2019, between First Fertility PGS Center Ltd. and MicroSort International (incorporated by reference to Exhibit 10.23 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.17 |
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Medical Consulting Service Agreement, dated January 1, 2021, between First Fertility PGS Center Ltd and First Fertility Phnom Penh Ltd (incorporated by reference to Exhibit 10.24 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.18 |
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Receivables Purchase Agreement, dated December, 28, 2022, between First Fertility PGS Center Ltd and Mr. Siu, Wing Fung Alfred (incorporated by reference to Exhibit 10.25 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.19 |
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Master Services Agreement, dated December 21, 2022, between First Fertility PGS Center Ltd and First Fertility Phnom Penh Ltd (incorporated by reference to Exhibit 10.26 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.20 |
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Form of Agreement for Storage of Embryos, Eggs, and Sperms Service between First Fertility PGS Center Ltd and Reproductive Expert Co Ltd (incorporated by reference to Exhibit 10.27 to the Company’s registration statement on Form F-4 (File No. 333-275208), filed with the Securities and Exchange Commission on October 27, 2023) |
10.21 |
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Form of NewGenIvf Group Limited 2024 Share Incentive Plan (incorporated by reference to exhibit 4.21 of the Company’s report on Form 20-F filed with the SEC on April 9, 2024) |
10.22 |
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Securities Purchase Agreement between A SPAC I Mini Acquisition Corp. and JAK Opportunities VI LLC dated February 29, 2024 (incorporated by reference to Exhibit 4.1 of the Company’s current report on Form 6-K filed with the SEC on April 4, 2024) |
10.23 |
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Form of Note between A SPAC I Mini Acquisition Corp. and JAK Opportunities VI LLC dated February 29, 2024 (incorporated by reference to Exhibit 4.2 of the Company’s current report on Form 6-K filed with the SEC on April 4, 2024) |
10.24 |
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Securities Purchase Agreement between the Company and certain buyers dated August 7, 2024 (incorporated by reference to Exhibit 4.1 of the Company’s current report on Form 6-K filed with the SEC on August 16, 2024) |
10.25 |
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Form of Note between the Company and JAK Opportunities VI LLC dated August 7, 2024 |
10.26 |
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Form of Note between the Company and JAK Opportunities VI LLC dated August 28, 2024 (incorporated by reference to Exhibit 4.1 of the Company’s current report on Form 6-K filed with the SEC on August 30, 2024) |
16.1 |
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Letter from WWC, P.C. regarding Item 16F of Form 20-F (incorporated by reference to Exhibit 16.1 of the Company’s annual report on Form 20-F filed with the SEC on August 20, 2024) |
21.1** |
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List of Subsidiaries |
23.1* |
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Consent Letter from WWC, P.C. |
23.2* |
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Consent Letter from Onestop Assurance PAC |
23.3** |
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Consent of Ogier (included in Exhibit 5.1) |
24.1* |
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Power of Attorney |
97.1 |
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Clawback Policy of the Company. (incorporated by reference to Exhibit 97.1 of the Company’s annual report on Form 20-F filed with the SEC on August 20, 2024) |
101.INS* |
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Inline XBRL Instance Document. |
101.SCH* |
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Inline XBRL Taxonomy Extension Schema Document. |
101.CAL* |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF* |
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Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB* |
|
Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE* |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104* |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
107* |
|
Fee Table |
* |
Filed herewith. |
** |
To be filed via an amendment |
Item 9. Undertakings
(a) |
The undersigned Registrant hereby undertakes: |
(1) |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
i. |
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
ii. |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
iii. |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) |
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) |
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. |
(5) |
That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(6) |
That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(b) |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form F-1 and has duly caused this registration statement on Form F-1 to be signed on its behalf by the undersigned,
thereunto duly authorized, on September 6, 2024.
NEWGENIVF GROUP LIMITED |
|
|
|
|
By: |
/s/ Wing Fung Alfred Siu |
|
|
Wing Fung Alfred Siu |
|
|
Chief Executive Officer |
|
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Wing Fung Alfred Siu his true and lawful attorney-in-fact, with full power of
substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments including
post-effective amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute,
each acting alone, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements
of the Securities Act of 1933, this amendment to the registration statement on Form F-1 has been signed by the following persons in the
capacities and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ Wing Fung Alfred Siu |
|
Chief Executive Officer and Director, |
|
September 6, 2024 |
Wing Fung Alfred Siu |
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
/s/ Hei Yue Tina Fong |
|
Director, Chief Marketing Officer |
|
September 6, 2024 |
Hei Yue Tina Fong |
|
|
|
|
|
|
|
|
|
/s/ Hok Man Jefferson Au |
|
Independent Director |
|
September 6, 2024 |
Hok Man Jefferson Au |
|
|
|
|
|
|
|
|
|
/s/ Yip Eng Jeremy Foo |
|
Independent Director |
|
September 6, 2024 |
Yip Eng Jeremy Foo |
|
|
|
|
|
|
|
|
|
/s/ Wai Yip Raymond Chiu |
|
Chief Financial Officer |
|
September 6, 2024 |
Wai Yip Raymond Chiu |
|
|
|
|
SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE
UNITED STATES
Pursuant to the Securities
Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of America of NewGenIvf Group Limited,
has signed this registration statement in New York, NY on September 6, 2024.
|
COGENCY GLOBAL INC. |
|
|
|
By: |
/s/ Colleen A. De Vries |
|
Name: |
Colleen A. De Vries |
|
Title: |
Senior Vice President on behalf of Cogency Global Inc. |
NEWGENIVF LIMITED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To: | The Board of Directors and Shareholders of NewGenIvf Limited |
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of NewGenIvf Limited and its subsidiaries (collectively the “Company”) as of December 31, 2021 and 2022,
and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity (deficit),
and cash flows in each of the years for the two-year period ended December 31, 2022, and the related notes (collectively
referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2021 and 2022, and the results of its operations and its cash flows for each of the years
in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States
of America.
Restatement of Previously Issued Financial
Statements
As discussed in Note 2, the Company has restated
its consolidated financial statements as of December 31, 2021 and 2022, and for the years then ended.
Correction of errors in the classification
of subscription receivable
The Company had previously erroneously presented
subscription receivable as an asset; that classification was incorrect. According to Article 5-02.29 of Regulation S-X, subscription receivable
should be presented as a deduction from equity rather than an asset. The Company has reassessed the classification of subscription receivable
and has determined that it should be deducted from equity.
Recognition of directors’ remuneration
for principal shareholders
The Company has previously recorded no directors’
remuneration to Mr. Siu Wing Fung, Alfred and Ms. Fong Hei Yue, Tina, who are concurrently directors and principal shareholders of
the Company. The absent of cost recognition was incorrect. According to SAB Topics 1:B and 5.T., principal shareholders not receiving
compensation for their time and effort serving as directors are making a capital contribution to the Company. The Company has reassessed
the fair value of services rendered by these directors and has determined that it should be recorded as an operating expense and additional
paid-in capital.
Emphasis of Matter — Going Concern
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As of December 31, 2021, the Company had a working capital deficit
and shareholders’ deficit, accordingly, these factors gave rise to substantial doubt that the Company would continue as a going
concern. As of December 31, 2022, the Company had an improvement in its capital position where the Company had net positive shareholders’
equity position, but the Company still had a working capital deficit; accordingly, the Company had not alleviated the substantial doubt
that it would continue as a going concern. Management closely monitors the Company’s financial position and result of operations
and has prepared a plan that includes raising additional capital and implementing improvements to increase profitability to address this
substantial doubt. Details of this plan are also found in Note 1. These financial statements do not include any adjustments that might
result from the outcome of this uncertainly.
Basis for Opinion
These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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
consolidated 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 consolidated 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
consolidated 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 consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.
/s/ WWC, P.C.
WWC, P.C.
Certified Public Accountants
PCAOB ID No.1171
San Mateo, California
September 28, 2023
We have served as the Company’s auditor
since 2022.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To: | The Board of Directors and Shareholders of Newgenivf Limited |
Opinion on the Financial Statements
We have audited the accompanying
consolidated balance sheet of Newgenivf Limited and its subsidiaries (collectively, the “Company”) as of December 31, 2023,
the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for the year ended
December 31, 2023, and the related notes to the consolidated financial statements and schedule (collectively, the financial statements).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles
generally accepted in the United States of America.
Material Uncertainty relating to Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1
to the financial statements, the Company had bank balance of $54,104 as of December 31, 2023 and for the year ended December 31,
2023, the Company had operating cash outflows of $1,766,135. This raises substantial doubt about its ability to continue as a
going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified in
respect of this matter.
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 audit. 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 U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for
our opinion.
/s/ Onestop Assurance PAC
We have served as the Company’s auditor since
2024.
Singapore
August 16, 2024
NEWGENIVF LIMITED
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2023 AND 2022
(Stated in US Dollars)
| |
2023 | | |
2022 | |
ASSETS | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash and cash equivalents | |
$ | 54,104 | | |
$ | 27,556 | |
Accounts receivable, net | |
| 9,374 | | |
| 13,000 | |
Inventories | |
| 126,264 | | |
| 46,910 | |
Deposits, prepayment, other receivables and deferred IPO cost, net | |
| 517,429 | | |
| 70,285 | |
Loan to A SPAC I | |
| 140,000 | | |
| — | |
Due from shareholders | |
| 354,285 | | |
| 2,240,872 | |
Total current assets | |
| 1,201,456 | | |
| 2,398,623 | |
| |
| | | |
| | |
Non-current assets | |
| | | |
| | |
Plant and equipment, net | |
| 162,157 | | |
| 122,673 | |
Right-of-use assets, net | |
| 283,847 | | |
| 383,670 | |
Total non-current assets | |
| 446,004 | | |
| 506,343 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 1,647,460 | | |
$ | 2,904,966 | |
| |
| | | |
| | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable | |
$ | 172,626 | | |
$ | 104,651 | |
Accrued liabilities and other payables | |
| 241,613 | | |
| 289,777 | |
Contract liabilities | |
| 7,937 | | |
| 1,360,168 | |
Due to a related party | |
| — | | |
| 110,773 | |
Operating lease liabilities, current | |
| 207,128 | | |
| 184,651 | |
Finance lease liabilities, current | |
| 6,446 | | |
| 18,758 | |
Taxes payable | |
| 486,706 | | |
| 486,872 | |
Total current liabilities | |
| 1,122,456 | | |
| 2,555,650 | |
| |
| | | |
| | |
Non-current liabilities | |
| | | |
| | |
Operating lease liabilities, non-current | |
| 118,979 | | |
| 242,187 | |
Finance lease liabilities, non-current | |
| — | | |
| 6,446 | |
Total non-current liabilities | |
| 118,979 | | |
| 248,633 | |
| |
| | | |
| | |
Total liabilities | |
$ | 1,241,435 | | |
$ | 2,804,283 | |
| |
| | | |
| | |
Shareholders’ equity | |
| | | |
| | |
Ordinary shares, $0.01 par value, 5,000,000 shares authorized; 698,123 and 601,830 shares issued and outstanding as of December 31, 2023 and 2022, respectively | |
$ | 6,981 | | |
$ | 6,018 | |
Subscription receivable | |
| (2,967,100 | ) | |
| (319,872 | ) |
Additional paid-in capital | |
| 4,324,834 | | |
| 1,458,941 | |
Accumulated deficit | |
| (461,351 | ) | |
| (591,544 | ) |
Accumulated other comprehensive (loss) income | |
| (7,288 | ) | |
| 9,570 | |
Equity attributable to the shareholders of the Company | |
| 896,076 | | |
| 563,113 | |
Non-controlling interests | |
| (490,051 | ) | |
| (462,430 | ) |
Total shareholders’ equity | |
| 406,025 | | |
| 100,683 | |
| |
| | | |
| | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | |
$ | 1,647,460 | | |
$ | 2,904,966 | |
The accompanying notes are an integral part of
these consolidated financial statements.
NEWGENIVF LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
| |
2023 | | |
2022 | | |
2021 | |
Revenues | |
$ | 5,136,153 | | |
$ | 5,944,190 | | |
$ | 4,118,120 | |
Cost of revenues | |
| (3,454,368 | ) | |
| (4,406,421 | ) | |
| (3,093,340 | ) |
Gross profit | |
| 1,681,785 | | |
| 1,537,769 | | |
| 1,024,780 | |
| |
| | | |
| | | |
| | |
Operating expenses | |
| | | |
| | | |
| | |
Selling and marketing expenses | |
| (18,030 | ) | |
| (36,194 | ) | |
| (24,693 | ) |
General and administrative expenses | |
| (1,259,364 | ) | |
| (1,094,962 | ) | |
| (801,329 | ) |
Audit fees | |
| (362,149 | ) | |
| (7,908 | ) | |
| - | |
| |
| | | |
| | | |
| | |
Total operating expenses | |
| (1,639,543 | ) | |
| (1,139,064 | ) | |
| (826,022 | ) |
| |
| | | |
| | | |
| | |
Operating income | |
| 42,242 | | |
| 398,705 | | |
| 198,758 | |
| |
| | | |
| | | |
| | |
Other income (expenses), net | |
| | | |
| | | |
| | |
Other income, net | |
| 111,837 | | |
| 23,019 | | |
| 45,652 | |
Interest income | |
| 518 | | |
| 21 | | |
| 63 | |
Interest expense | |
| (46,179 | ) | |
| (77,757 | ) | |
| (88,289 | ) |
Total other income (expenses), net | |
| 66,176 | | |
| (54,717 | ) | |
| (42,574 | ) |
| |
| | | |
| | | |
| | |
Income before taxes | |
| 108,418 | | |
| 343,988 | | |
| 156,184 | |
Provision for income taxes | |
| — | | |
| (208,141 | ) | |
| (294,716 | ) |
Net income (loss) | |
| 108,418 | | |
| 135,847 | | |
| (138,532 | ) |
Less: net loss attributable to non-controlling interests | |
| (21,775 | ) | |
| (322,820 | ) | |
| (137,999 | ) |
Net income (loss) attributable to the shareholders of the Company | |
$ | 130,193 | | |
$ | 458,667 | | |
| (533 | ) |
| |
| | | |
| | | |
| | |
Other comprehensive income (loss) | |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| (22,704 | ) | |
| (1,920 | ) | |
| 7,751 | |
Total comprehensive income (loss) | |
| 85,714 | | |
| 133,927 | | |
| (130,781 | ) |
Less: total comprehensive loss attributable to non-controlling interests | |
| (27,621 | ) | |
| (323,458 | ) | |
| (136,396 | ) |
Total comprehensive income attributable to the shareholders of the Company | |
$ | 113,335 | | |
$ | 457,385 | | |
| 5,615 | |
| |
| | | |
| | | |
| | |
Earning per share – basic and diluted | |
$ | 0.18 | | |
$ | 0.80 | | |
| (0.00 | ) |
Basic and diluted weighted average shares outstanding | |
| 615,135 | | |
| 575,930 | | |
| 560,000 | |
The accompanying notes are an integral part of
these consolidated financial statements.
NEWGENIVF LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
| |
Number
of shares | | |
Ordinary
shares | | |
Subscription
receivable | | |
Additional
paid-in
capital | | |
Accumulated
deficit | | |
Accumulated
other comprehensive income/(loss) | | |
Total
attributable to the shareholders of the Company | | |
Non-
controlling
interests | | |
Total | |
Balance,
January 1, 2021 | |
| 560,000 | | |
$ | 5,600 | | |
$ | — | | |
$ | 57,821 | | |
$ | (1,049,678 | ) | |
$ | 4,704 | | |
$ | (981,553 | ) | |
$ | (2,576 | ) | |
$ | (984,129 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| (533 | ) | |
| — | | |
| (533 | ) | |
| (137,999 | ) | |
| (138,532 | ) |
Foreign currency translation adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 6,148 | | |
| 6,148 | | |
| 1,603 | | |
| 7,751 | |
Directors’ remuneration | |
| — | | |
| — | | |
| — | | |
| 200,000 | | |
| — | | |
| — | | |
| 200,000 | | |
| — | | |
| 200,000 | |
Balance, December 31,
2021 | |
| 560,000 | | |
$ | 5,600 | | |
$ | — | | |
$ | 257,821 | | |
$ | (1,050,211 | ) | |
$ | 10,852 | | |
$ | (775,938 | ) | |
$ | (138,972 | ) | |
$ | (914,910 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, January 1,
2022 | |
| 560,000 | | |
$ | 5,600 | | |
$ | — | | |
$ | 257,821 | | |
$ | (1,050,211 | ) | |
$ | 10,852 | | |
$ | (775,938 | ) | |
$ | (138,972 | ) | |
$ | (914,910 | ) |
Net income (loss) | |
| — | | |
| — | | |
| — | | |
| — | | |
| 458,667 | | |
| — | | |
| 458,667 | | |
| (322,820 | ) | |
| 135,847 | |
Foreign currency translation adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,282 | ) | |
| (1,282 | ) | |
| (638 | ) | |
| (1,920 | ) |
Directors’ remuneration | |
| — | | |
| — | | |
| — | | |
| 240,000 | | |
| — | | |
| — | | |
| 240,000 | | |
| — | | |
| 240,000 | |
Issuance of shares | |
| 41,830 | | |
| 418 | | |
| (319,872 | ) | |
| 961,120 | | |
| — | | |
| — | | |
| 641,666 | | |
| — | | |
| 641,666 | |
Balance,
December 31, 2022 | |
| 601,830 | | |
$ | 6,018 | | |
$ | (319,872 | ) | |
$ | 1,458,941 | | |
$ | (591,544 | ) | |
$ | 9,570 | | |
$ | 563,113 | | |
$ | (462,430 | ) | |
$ | 100,683 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, January 1,
2023 | |
| 601,830 | | |
$ | 6,018 | | |
$ | (319,872 | ) | |
$ | 1,458,941 | | |
$ | (591,544 | ) | |
$ | 9,570 | | |
$ | 563,113 | | |
$ | (462,430 | ) | |
$ | 100,683 | |
Net (loss) income | |
| — | | |
| — | | |
| — | | |
| — | | |
| 130,193 | | |
| — | | |
| 130,193 | | |
| (21,775 | ) | |
| 108,418 | |
Foreign currency translation adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (16,858 | ) | |
| (16,858 | ) | |
| (5,846 | ) | |
| (22,704 | ) |
Settlement of subscription receivable | |
| — | | |
| — | | |
| 219,628 | | |
| — | | |
| — | | |
| — | | |
| 219,628 | | |
| — | | |
| 219,628 | |
Issuance of shares | |
| 96,293 | | |
| 963 | | |
| (2,866,856 | ) | |
| 2,865,893 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Balance,
December 31, 2023 | |
| 698,123 | | |
$ | 6,981 | | |
$ | (2,967,100 | ) | |
$ | 4,324,834 | | |
$ | (461,351 | ) | |
$ | (7,288 | ) | |
$ | 896,076 | | |
$ | (490,051 | ) | |
$ | 406,025 | |
The accompanying notes are an integral part of
these consolidated financial statements.
NEWGENIVF LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
| |
2023 | | |
2022 | | |
2021 | |
| |
| | |
| | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | 108,418 | | |
$ | 135,847 | | |
$ | (138,532 | ) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |
| | | |
| | | |
| | |
Depreciation of plant and equipment | |
| 31,173 | | |
| 100,533 | | |
| 166,709 | |
Amortization of right-of-use assets | |
| 198,535 | | |
| 203,411 | | |
| 175,830 | |
Loss on disposal of plant and equipment | |
| — | | |
| 114,013 | | |
| — | |
Provision of expected credit loss allowance | |
| 625 | | |
| 10,777 | | |
| 6,717 | |
Interest expense | |
| 46,179 | | |
| — | | |
| — | |
Waiver of related party balance | |
| (88,151 | ) | |
| — | | |
| — | |
Directors’ remuneration | |
| — | | |
| 240,000 | | |
| 200,000 | |
Legal and professional fee | |
| 27,320 | | |
| — | | |
| — | |
Provision for income taxes | |
| — | | |
| 208,141 | | |
| — | |
Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
Accounts receivable | |
| 1,166 | | |
| 129,922 | | |
| 56,183 | |
Inventories | |
| (80,665 | ) | |
| (7,219 | ) | |
| 1,352 | |
Deposit and other receivables, net | |
| (448,266 | ) | |
| (15,197 | ) | |
| 10,987 | |
Accounts payable | |
| 71,362 | | |
| 58,752 | | |
| (60,989 | ) |
Accrued liabilities and other payables | |
| (51,167 | ) | |
| 190,689 | | |
| 79,853 | |
Contract liabilities | |
| (1,352,231 | ) | |
| 548,010 | | |
| 812,158 | |
Operating lease liabilities | |
| (230,433 | ) | |
| (175,132 | ) | |
| (148,677 | ) |
Finance lease liabilities | |
| — | | |
| (19,476 | ) | |
| (19,476 | ) |
Tax paid | |
| — | | |
| (12,170 | ) | |
| 290,887 | |
Net cash (used in) provided by operating activities | |
| (1,766,135 | ) | |
| 1,710,901 | | |
| 1,433,002 | |
| |
| | | |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | | |
| | |
Purchase of plant and equipment | |
| (69,848 | ) | |
| (94,452 | ) | |
| (16,575 | ) |
Net cash used in investing activities | |
| (69,848 | ) | |
| (94,452 | ) | |
| (16,575 | ) |
| |
| | | |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | | |
| | |
Amount due from A SPAC I | |
| (140,000 | ) | |
| — | | |
| — | |
Finance lease | |
| (9,317 | ) | |
| (19,476 | ) | |
| (17,221 | ) |
Other borrowings, net | |
| — | | |
| 128,204 | | |
| 512,821 | |
Issuance of shares | |
| 192,308 | | |
| — | | |
| — | |
Interest paid | |
| (24,704 | ) | |
| — | | |
| — | |
Amount with related parties | |
| 1,863,206 | | |
| (1,742,509 | ) | |
| (2,039,969 | ) |
Net cash provided by (used in) financing activities | |
| 1,881,493 | | |
| (1,633,781 | ) | |
| (1,544,369 | ) |
| |
| | | |
| | | |
| | |
Net increase/(decrease) in cash and cash equivalents | |
| 45,510 | | |
| (17,332 | ) | |
| (127,942 | ) |
Effect of foreign currency translation on cash and cash equivalents | |
| (18,962 | ) | |
| 16,124 | | |
| 50,514 | |
Cash and cash equivalents, beginning of year | |
| 27,556 | | |
| 28,764 | | |
| 106,192 | |
Cash and cash equivalents, end of year | |
$ | 54,104 | | |
$ | 27,556 | | |
| 28,764 | |
| |
| | | |
| | | |
| | |
Supplementary cash flow information: | |
| | | |
| | | |
| | |
Taxes paid | |
$ | - | | |
$ | (12,170 | ) | |
| (3,829 | ) |
Interest paid | |
$ | (24,704 | ) | |
$ | (55,469 | ) | |
| (65,582 | ) |
The accompanying notes are an integral part of
these consolidated financial statements.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 1 — ORGANIZATION AND PRINCIPAL
ACTIVITIES
NewGenIvf Limited (the “Company”
or the “Group”) was incorporated under the laws of the Cayman Islands on January 16, 2019 as an investment holding company.
The following is an organization
chart of the Company and its subsidiaries:
As of December 31, 2023,
the Company’s subsidiaries are detailed in the table as follows:
Name | | Background | | Ownership % | | Principal activity |
FFPGS (HK) Limited | | ● A Hong Kong company ● Incorporated on December 19, 2019 | | 100% | | Marketing and administrative services |
Well Image Limited | | ● A Hong Kong company ● Incorporated on July 11, 2008 | | 100% | | Investment holding |
Med Holdings Limited (“Med Holdings”) (Note) | | ● A Thailand company ● Incorporated on January 21, 2015 | | 49%* | | Investment holding |
First Fertility PGS Center Limited (“FFC”) (Note) | | ● A Thailand company ● Incorporated on March 6, 2014 | | 74% | | Provision of IVF treatment |
First Fertility Phnom Penh Limited (“FFPP”) | | ● A Cambodia company ● Incorporated on August 10, 2015 | | 100% | | Provision of IVF treatment |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 1 — ORGANIZATION AND PRINCIPAL
ACTIVITIES (cont.)
Name | | Background | | Ownership % | | Principal activity |
First Fertility Bishkek LLC (“FFB”) | | ● A Kyrgyzstan company ● Incorporated on October 11, 2019 | | 100% | | Provision surrogacy and ancillary caring services |
Note:
According to the Foreign Business
Act (the “FBA”), the majority shareholdings of limited company incorporated in Thailand is required to be owned by Thai nationals.
With reference to the capital
structure and voting rights structure of ordinary shares and preference shares (the “Share Structure”) of Med Holdings and
FFC, all the preference share capital is owned by a Thai national. The ordinary shares and preference shares have the same rights and
status in all respects except for the distribution of profits by way of dividends with details as follow:
| (a) | Dividends from profits of Med Holdings and FFC shall be allocated
to the holders of preference shares at a rate fixed from time to time by the board of directors prior to allocating to the holders of
ordinary shares. In any event, such dividends to be allocated to the holders of preference shares shall not exceed 15% of the total amount
of dividends declared from time to time; |
| (b) | After allocation of dividends as per (a) above, the rest
of the dividends shall be distributed equally amongst the holders of ordinary shares according to their shareholding ratio; |
| (c) | The holders of preferred shares shall be entitled to dividends
only in respect of the years for which the Company has declared a dividend payment, and there shall be no cumulative dividends;
and |
| (d) | Dividends allocated to the holders of preferred shares in each
year shall be limited at the rate as stated in (a) only. No additional dividends shall be paid to the holders of preferred shares. |
Based upon the management’s
judgement on the Shares Structure, as the Company is able to exercise majority voting power in any board meeting, the Company accounts
for Med Holdings and FFC as subsidiaries on the ground that the Company is able to control Med Holdings and FFC by exercising its majority
voting power in any board meetings.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 1 — ORGANIZATION AND PRINCIPAL
ACTIVITIES (cont.)
Group reorganization
Pursuant to a group reorganization
(the “group reorganization”) to rationalize the structure of the Company and its subsidiary companies (herein collectively
referred to as the “Group”) in preparation for the listing of its shares, the Company becomes the holding company of the Group
on February 2, 2023. As the Group were under same control of the shareholders and their entire equity interests were also ultimately
held by the shareholders immediately prior to the group reorganization, the consolidated statements of income and comprehensive income,
consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows are prepared as if the current
group structure had been in existence throughout the three-year period ended December 31, 2023, or since the respective dates
of incorporation/establishment of the relevant entity, where this is a shorter period.
The consolidated balance sheets
as of December 31, 2023 and 2022 present the assets and liabilities of the aforementioned companies now comprising the Group which
had been incorporated/established as of the relevant balance sheet date as if the current group structure had been in existence at those
dates based on the same control aforementioned. The Company eliminates all significant intercompany balances and transactions in its consolidated
financial statements.
The movement in the Company’s
authorized share capital and the number of ordinary shares outstanding and issued in the Company are also detailed in Note 10.
Going
concern
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As of December 31, 2023, the Company had bank balance
of $54,104 and may have challenge to settle its obligations when payment become due. The Company is always closely monitoring the market
opportunities and is currently in the process of exercising various fundraising projects with various potential investors to improve the
Company’s cash flow position for its operation and short-term payables. One fundraising project was completed on April 3, 2024. As of
April 4, 2024, the Company settled $2 million to any payment with respect to accounts payable, but not, directly or indirectly, for (i)
except for expenses relating to the Business Combination, the satisfaction of any indebtedness of the Company or any of its Subsidiaries,
(ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding
litigation as at December 31, 2023. The Company secured funding subsequent to year-end with total of $2 million, and that the Company
received $2 million funding to date. Please refer to Note 20 – Subsequent Events for further information. The Company can
make no assurance that required financings will be available for the amounts needed, or on terms commercially acceptable to the Company,
if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity
shortfall, there would likely be a material adverse effect on the Company and its financial statements.
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Principles of consolidation and basis of preparation
The accompanying consolidated
financial statements reflect the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. All
inter-company balances and transactions have been eliminated in consolidation.
Management has prepared the accompanying
consolidated financial statements and these notes in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”). The Company maintains its general ledger and journals with the accrual method accounting.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Use of estimates
The preparation of the consolidated
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the periods presented. Significant estimates required to be made by management
include, but are not limited to, contingent tax liability for Kyrgyzstan. Actual results could differ from those estimates, and as such,
differences may be material to the consolidated financial statements.
Foreign currency translation
The accompanying consolidated
financial statements are presented in United States dollar (“$”), which is the reporting currency of the Company. The
functional currency of the Company and its subsidiaries, FFPGS (HK) Limited and Well Image Limited, are Hong Kong dollar (“HK$”).
Med Holdings and FFC use Thai baht (“THB”) as their functional currencies. First Fertility Phnom Penh Limited uses Cambodian
riel (“KHR”) as its functional currency and First Fertility Bishkek LLC uses United States dollar (“USD”)
as its functional currency.
Assets and liabilities denominated
in currencies other than the reporting currency are translated into the reporting currency at the rates of exchange prevailing at the
balance sheet date. Translation gains and losses are recognized in the consolidated statements of operations and comprehensive income
as other comprehensive income or loss.
Transactions in currencies other
than the reporting currency are measured and recorded in the reporting currency at the exchange rate prevailing on the transaction date.
The cumulative gain or loss from foreign currency transactions is reflected in the consolidated statements of operations and comprehensive
income as other income (other expenses).
The value of foreign currencies
including, the HK$, THB, KHR and RMB, may fluctuate against the United States dollar. Any significant variations of the aforementioned
currencies relative to the United States dollar may materially affect the Company’s financial condition in terms of reporting
in USD. The following table outlines the currency exchange rates that were used in preparing the accompanying consolidated financial
statements:
| |
| |
2023 | | |
2022 | | |
2021 | |
Period-end | |
$: HK$ | |
| 7.8000 | | |
| 7.8000 | | |
| 7.8000 | |
Period average | |
$: HK$ | |
| 7.8000 | | |
| 7.8000 | | |
| 7.8000 | |
Period-end | |
$: THB | |
| 34.2265 | | |
| 34.6153 | | |
| 33.1964 | |
Period average | |
$: THB | |
| 34.7867 | | |
| 35.1428 | | |
| 32.1003 | |
Period-end | |
$: KHR | |
| 4,080.0304 | | |
| 4,114.3335 | | |
| 4,068.9577 | |
Period average | |
$: KHR | |
| 4,105.4181 | | |
| 4,083.7043 | | |
| 4,065.8164 | |
Period-end | |
$: RMB | |
| 7.0971 | | |
| 6.9091 | | |
| 6.3551 | |
Period average | |
$: RMB | |
| 7.0835 | | |
| 6.4569 | | |
| 6.4368 | |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Cash and cash equivalents
Cash and cash equivalents include
cash on hand, deposits held at call with financial institutions, other short-term deposits with original maturities of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Deposits, prepayment, other receivables and deferred
IPO cost, net
Deposits, prepayment, other receivables
and deferred Initial Public Offering (“IPO”) cost, net primarily include deposits paid to suppliers, prepaid expenses, the
prepaid professional fee which meets the definition of deferred IPO cost, and other deposits.
Deferred IPO costs consist of
underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public
Offering and that were charged to shareholders’ equity upon the completion of the Initial Public Offering.
Plant and equipment, net
Plant and equipment are stated
at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method.
The Company typically applies a salvage value of 0%. The estimated useful lives of the plan and equipment are as follows:
Furniture and fixtures |
|
3 – 5 years |
Leasehold improvements |
|
the lesser of useful life or term of lease |
Medical instruments |
|
3 – 10 years |
Motor vehicle |
|
3 – 5 years |
Office equipment |
|
3 – 5 years |
The cost and related accumulated
depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s
results of operations. The costs of maintenance and repairs are expensed as incurred. Significant renewals and betterments that extend
the useful life of an assets are capitalized.
Impairment of long-lived assets
The Company evaluates the long-lived assets
for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment
may become obsolete from a difference in the industry, introduction of new technologies, or if the Company has inadequate working capital
to utilize the long-lived assets to generate adequate profits. Impairment is present if the carrying amount of an asset is less than
its expected future undiscounted cash flows.
If an asset is considered impaired,
a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed
of are reported lower the carrying amount or fair value less cost to sell.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Inventories
Inventories are stated at the
lower of cost and net realizable value. Costs are determined on a first-in, first-out basis. Net realizable value is based on the
estimated selling prices less any estimated costs to be incurred to completion and disposal. A provision for excess and obsolete inventory
will be made based primarily on forecasts of product demand. The excess balance determined by this analysis becomes the basis for excess
inventory charge and the written-down value of the inventory becomes its cost. Written-down inventory would not be reversed
if market conditions improve.
Other borrowings
Other borrowings are recognized
initially at fair value, net of debt issuance costs incurred. Other borrowings are subsequently stated at amortized cost; any difference
between the proceeds (net of debt issuance costs) and the redemption value is recognized in the consolidated statements of operations
over the period of the borrowings using the effective interest method.
Ordinary shares
The Company’s ordinary shares
are stated at par value of $0.01 per ordinary share. The difference between the consideration received, net of issuance cost, and the
par value is recorded in additional paid-in capital.
Revenue recognition
The Company adopted ASC Topic 606,
Revenue from Contracts with Customers, and all subsequent ASUs that modified ASC 606 on April 1, 2017 using the full retrospective
method which requires the Company to present the financial statements for all periods as if Topic 606 had been applied to all prior
periods. The Company derives revenue principally from provision of In vitro fertilization (“IVF”) treatment and surrogacy
and ancillary caring services. Revenue from contracts with customers is recognized using the following five steps:
| (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) | recognize revenue when each performance obligation under those
contracts is satisfied. Revenue is recognized when promised services are transferred to the client in an amount that reflects the consideration
expected in exchange for those services. |
The Company enters into service
agreements with its customers that outline the rights, responsibilities, and obligations of each party. The agreements also identify the
scope of services, service fees, and payment terms. Agreements are acknowledged and signed by both parties. All the contracts have commercial
substance, and it is probable that the Company will collect considerations from its customers for service component.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Revenue recognition (cont.)
The Company derives its revenues
from two sources: (1) revenue from IVF treatment, and (2) revenue from surrogacy and ancillary caring services.
Revenue from IVF treatment
In vitro fertilization (“IVF”)
treatment is an assisted reproductive technique where eggs and sperm are collected and fertilized in laboratory to become embryo. Fertilized
embryo is then implanted to the customer or a surrogate mother. IVF treatment involves the performance of a series of medical treatment
and procedures that are not separately distinct and only brings benefits to customer when embryo is successfully implanted, therefore
revenue from IVF treatment is recognized at a point in time when it is completed in clinic. The completion of this treatment is evidenced
by a written IVF report indicating successful embryo implantation. The Company collects payment from customer in advance for IVF treatment.
The amount of revenue recognized from contract liabilities to the Company’s result of operations can be found in Note 8 below.
Revenue from surrogacy and ancillary caring
services
The Company provides surrogacy
and ancillary caring services solely in Kyrgyzstan. Embryo from blood parents is implanted to surrogate mother contracted by the Company.
During pregnancy period, the Company provides ancillary caring services including regular body check and provision of vitamins, supplements
and medicines to surrogate mothers. The key performance obligation is identified as a single performance obligation where a baby is born,
therefore revenue from surrogacy and ancillary caring services is recognized at a point in time when surrogate mother gives birth. The
Company collects approximately 40% of contract sum upfront, and remaining contract sum is collected in installments across pregnancy period
of surrogate mother. The amount of revenue recognized from contract liabilities to the Company’s result of operations can be found
in Note 8 below.
Contract related assets and liabilities
are classified as current assets and current liabilities. Significant balance sheet accounts related to the revenue cycle are as follows:
Account receivables, net
Accounts receivable, net are stated
at the original amount less an allowance for expected credit loss on such receivables. The allowance for expected credit loss is estimated
based upon the Company’s assessment of various factors including historical experience, the age of the accounts receivable balances,
current general economic conditions, future expectations and customer specific quantitative and qualitative factors that may affect the
Company’s customers’ ability to pay. An allowance is also made when there is objective evidence for the Company to reasonably
estimate the amount of probable loss.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Revenue recognition (cont.)
Contract liabilities
Contract liabilities represent
considerations received from customers in advance of satisfying the Company’s performance obligations under the contract. These
amounts are expected to be earned within 12 months and are classified as current liabilities.
Expected credit loss
ASU No. 2016-13, Financial
Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments requires entities
to use a current lifetime expected credit loss methodology to measure impairments of certain financial assets. Using this methodology
will result in earlier recognition of losses than under the current incurred loss approach, which requires waiting to recognize a loss
until it is probable of having been incurred. There are other provisions within the standard that affect how impairments of other financial
assets may be recorded and presented, and that expand disclosures. Expected credit losses are probability-weighted estimates of credit
losses. Credit losses are measured at the present value of all cash shortfalls (i.e., the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest
rate of the financial asset.
Retirement benefits
Retirement benefits in the form
of mandatory government-sponsored defined contribution plans are charged to either expense as incurred or allocated to wages as part
of cost of revenues.
Segment information
Operating segments are identified
as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating
decision maker (the “CODM”), or decision making group, in making decisions on how to allocate resources and assess performance.
The Company operates and manages in one operating segment. The Company defines its CODM as Mr. Siu Wing Fund Alfred, the Company’s
Chief Executive Officer. Since the Company operates in one operating segment, all required financial segment information can be found
in the consolidated financial statements. The long-lived assets and revenue from external customers as of December 31, 2023,
2022 and 2021 by geographical area are presented in Note 13.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Leases
The Company measured the lease
in accordance to ASU 2016-02, “Leases” (Topic 842). Lease terms used to calculate the present value of lease payments
generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease
inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to
be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating
lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide
a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis
over the lease term.
As
of December 31, 2023 and 2022, there were $283,847 and $383,670 million right of use (“ROU”) assets and $326,107
and $426,838 lease liabilities based on the present value of the future minimum rental payments of leases, respectively. The Company’s
management believes that using an incremental borrowing rate of the minimum loan rate and the Hong Kong Dollar Best Lending Rate
(“BLR”) minus 0.125% was the most indicative rate
of the Company’s borrowing cost for the calculation of the present value of the lease payments; the rate used by the Company was
6.6% and 5.0% respectively.
Income Taxes
The Company recognizes deferred
income tax assets or liabilities for expected future tax consequences of events recognized in the consolidated financial statements or
tax returns. Under this method, deferred income tax assets and liabilities are determined based on the differences between the financial
reporting and income tax bases of assets and liabilities and are measured using the income tax rates that will be in effect when the differences
are expected to reverse. Valuation allowances are provided when it is more likely than not that a deferred tax asset is not realizable
or recoverable in the future.
The Company determines that the
tax position is more likely than not to be sustained and records the largest amount of benefit that is more likely than not to be realized
when the tax position is settled. the Company recognizes interest and penalties, if any, related to uncertain tax positions in income
tax expense.
Comprehensive Income
The Company presents comprehensive
income in accordance with ASC Topic 220, Comprehensive Income. ASC Topic 220 states that all items that are required
to be recognized under accounting standards as components of comprehensive income be reported in the consolidated financial statements.
The components of comprehensive income were the net income for the years and the foreign currency translation adjustments.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Earnings per share
The Company computes earnings
per share (“EPS”) following ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss
available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive
effect on a per-share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the
dilutive impacts of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of
options or warranties are computed using the treasury stock method. Potentially anti-dilutive securities (i.e., those that increase
income per share or decrease loss per share) are excluded from diluted EPS calculation. There were no potentially dilutive securities
that were in-the-money that were outstanding during the years ended December 31, 2023, 2022 and 2021.
Related parties
The Company adopted ASC 850,
Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Commitments and contingencies
In the normal course of business,
the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range
of matters, such as government investigations and tax matters. The Company recognizes its liability for such contingency if it determines
it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making
these assessments including historical and the specific facts and circumstances of each matter.
Non-controlling interests
Non-controlling interests
are presented as a separate component of equity on the consolidated balance sheets and net (loss) income and other comprehensive loss
are attributed to controlling and non-controlling interests respectively.
Concentration of risks
Concentration of credit risk
Financial instruments that potentially
expose us to concentrations of credit risk consist primarily of cash and cash equivalents and account receivable. The Company places cash
and cash equivalents with financial institutions with high credit ratings and quality.
Accounts receivable primarily
comprise of amounts receivable from the service customers. The Company conducts credit evaluations of customers, and generally does not
require collateral or other security from its customers. The Company establishes an allowance for doubtful accounts primarily based upon
the factors surrounding the credit risk of specific customers.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Concentration of risks (cont.)
Concentration of customers
As of December 31, 2023 and
2022, two and Nil customers which individually contributed more than 10% of trade receivable, accounted for 96.3% and Nil of the Company’s
trade receivable respectively.
None of the customers contributed
more than 10% of revenue for years ended December 31, 2023, 2022 and 2021.
Concentration of suppliers
As of December 31, 2023 and
2022, one and four suppliers which individually contributed more than 10% of trade payable, accounted for 30.6% and 69.8% of the Company’s
trade payable respectively.
For the year ended December 31,
2023, 2022 and 2021, Nil, two and two vendors which contributed more than 10% of total purchases of the Company, accounted for Nil, 55.3%
and 35.6% of the Company’s total purchases respectively.
Financial instruments
The Company’s financial instruments, including
cash and cash equivalents, accounts receivables, net, deposits, other receivables and deferred IPO cost, net, loan to A SPAC I, accounts
payables, accrued liabilities and other payables, and due from (to) shareholders, have carrying amounts that approximate their fair values
due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures” requires disclosing the fair
value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments” defines fair value and establishes
a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value
measures. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts and other receivables,
accounts and other payables, accrued liabilities and amounts due from (to) related parties each qualify as financial instruments and are
a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected
realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
| ● | Level 1 — inputs to the valuation methodology
used quoted prices for identical assets or liabilities in active markets. |
| ● | Level 2 — inputs to the valuation methodology
include quoted prices for similar assets and liabilities in active markets and information that are observable for the asset or liability,
either directly or indirectly, for substantially the financial instrument’s full term |
| ● | Level 3 — inputs to the valuation methodology
are unobservable and significant to the fair value measurement. |
The Company analyzes all financial
instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” and
ASC 815.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
Recent accounting pronouncements adopted
In April 2019, the FASB issued ASU 2019-04, Codification
Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,
which amends and clarifies several provisions of Topic 326. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses
(Topic 326) Targeted Transition Relief, which amends Topic 326 to allow the fair value option to be elected for certain financial instruments
upon adoption. ASU 2019-10 extended the effective date of ASU 2016-13 until December 15, 2022. This standard replaces the incurred loss
methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.
CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current
conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan
receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit.
Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for expected
credit losses. The Company already adopted the new standard and the Company recognizes the full impact of the new standard in these consolidated
balance sheets and makes related disclosures.
Recent accounting pronouncements not yet adopted
In November 2023, the FASB issued
ASU 2023-07, “Segment Reporting (Topic 280)” (“ASU 2023-07”). The amendments in ASU 2023-07 improve financial
reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable
investors to develop more decision useful financial analyses. Topic 280 requires a public entity to report a measure of segment profit
or loss that the chief operating decision maker (CODM) uses to assess segment performance and make decisions about allocating resources.
Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed
under certain circumstances. The amendments in ASU 202307 do not change or remove those disclosure requirements. The amendments in ASU
2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the
quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for years beginning after December
15, 2023 and interim periods within fiscal years beginning after December 15, 2024, adopted retrospectively. Management considers that
the guidance does not have a significant impact on the disclosures set out in these consolidated financial statements.
In December 2023, FASB issued
Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740)” (“ASU 2023-09”). The amendments
in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures
primarily related to the rate reconciliation and income taxes paid information. One of the amendments in ASU 2023-09 includes disclosure
of, on an annual basis, a tabular rate reconciliation of (i) the reported income tax expense (or benefit) from continuing operations,
to (ii) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income
tax rate of the jurisdiction of domicile using specific categories, including separate disclosure for any reconciling items within certain
categories that are equal to or greater than a specified quantitative threshold of 5%. ASU 2023-09 also requires disclosure of, on an
annual basis, the year to date amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign jurisdictions,
including additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or
greater than 5% of total income taxes paid (net of refunds received). The amendments in ASU2023-09 are effective for annual periods beginning
after December 15, 2024, and should be applied prospectively. The Company is currently evaluating the impact of the update on the Company’s
consolidated financial statements and related disclosures.
Save for elsewhere disclosed,
the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material
effect on the Company’s consolidated balance sheet, statement of operations and comprehensive income (loss) and statement of cash
flows.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 3 — ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consists
of the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
Accounts receivable | |
$ | 9,393 | | |
$ | 13,026 | |
Less: allowance for expected credit loss | |
| (19 | ) | |
| (26 | ) |
| |
$ | 9,374 | | |
$ | 13,000 | |
As of the end of each of the financial
year, the aging analysis of accounts receivable, net of allowance for expected credit loss, based on the invoice date is as follows:
| |
December 31, | |
| |
2023 | | |
2022 | |
Within 90 days | |
$ | 9,374 | | |
$ | 13,000 | |
| |
$ | 9,374 | | |
$ | 13,000 | |
The movement of allowances for
expected credit loss is as follow:
| |
December 31, | |
| |
2023 | | |
2022 | |
Balance at beginning of the year | |
$ | (26 | ) | |
$ | (286 | ) |
Reversal of expected credit losses | |
| 7 | | |
| 260 | |
Ending balance | |
$ | (19 | ) | |
$ | (26 | ) |
NOTE 4 — INVENTORIES
Inventories consist of the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
Medicines, consumables and reagents for clinical and laboratory analyses | |
$ | 126,264 | | |
$ | 46,910 | |
| |
$ | 126,264 | | |
$ | 46,910 | |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 5 — DEPOSITS, PREPAYMENT, OTHER
RECEIVABLES AND DEFERRED IPO COST, NET
Deposits, prepayment, other receivables
and deferred IPO cost, net consist of the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
Other receivables | |
$ | 15,910 | | |
$ | 30,295 | |
Deposits | |
| 123,008 | | |
| 40,131 | |
Prepayment | |
| 4,848 | | |
| - | |
Deferred initial public offering “IPO” cost | |
| 373,677 | | |
| - | |
Less: allowance for expected credit loss | |
| (14 | ) | |
| (141 | ) |
| |
$ | 517,429 | | |
$ | 70,285 | |
The movement of allowances for
expected credit loss is as follow:
| |
December 31, | |
| |
2023 | | |
2022 | |
Balance at beginning of the year | |
$ | (141 | ) | |
$ | (115 | ) |
Reversal of provision (Provision) | |
| 127 | | |
| (30 | ) |
Effect of currency translation adjustment | |
| - | | |
| 4 | |
Ending balance | |
$ | (14 | ) | |
$ | (141 | ) |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 6 — PLANT AND EQUIPMENT, NET
Plant and equipment, net consist
of the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
At cost: | |
| | | |
| | |
Building improvement | |
$ | 92,438 | | |
$ | 72,519 | |
Furniture and fixtures | |
| 250,493 | | |
| 246,682 | |
Medical instruments | |
| 844,809 | | |
| 791,514 | |
Motor vehicle | |
| 142,936 | | |
| 142,936 | |
Office equipment | |
| 150,688 | | |
| 146,432 | |
| |
| 1,481,364 | | |
| 1,400,083 | |
Less: accumulated depreciation | |
| (1,319,207 | ) | |
| (1,277,410 | ) |
Total | |
$ | 162,157 | | |
$ | 122,673 | |
Depreciation expenses for the years
ended December 31, 2023 and 2022 were $31,173 and $100,533, respectively. Loss on disposal of assets for the year ended December 31,
2023 and 2022 was $Nil and $114,013, respectively, due to moving of clinic to new location in First Fertility PGS Center Limited in 2022.
No impairment loss was recorded
for the years ended December 31, 2023, and 2022.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 7 — ACCRUED LIABILTIES AND
OTHER PAYABLES
Accrued liabilities and other
payables consist of the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
Accrued expenses | |
$ | 43,633 | | |
$ | 22,345 | |
Other tax payable | |
| — | | |
| 3,180 | |
Withholding tax payable | |
| 7,349 | | |
| 82,240 | |
Compensation payable (Note 1) | |
| 144,015 | | |
| 117,935 | |
Other payables | |
| 46,616 | | |
| 64,077 | |
| |
$ | 241,613 | | |
$ | 289,777 | |
NOTE 8 — CONTRACT LIABILITIES
Contract liabilities consist of
the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
Balance at beginning of year | |
$ | 1,360,168 | | |
$ | 812,158 | |
Additions | |
| 112,006 | | |
| 1,360,168 | |
Recognized to revenue during the year | |
| (122,662 | ) | |
| (812,158 | ) |
Refund to customers (Note 1) | |
| (1,341,575 | ) | |
| - | |
Balance at end of year | |
$ | 7,937 | | |
$ | 1,360,168 | |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 9 — LEASES
The Company has various operating
leases for clinics and office spaces. The lease agreements do not specify an explicit interest rate. The Company’s management believes
that the interest rate of 6.6% and 5% was the most indicative rate of the Company’s borrowing cost for the calculation of the present
value of the lease payments.
As of December 31, 2023
and 2022, the right-of-use assets totaled $283,847, and $383,670, respectively.
As of December 31, 2023
and 2022, lease liabilities consist of the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
Lease liabilities – current portion | |
$ | 207,128 | | |
$ | 184,651 | |
Lease liabilities – non-current portion | |
| 118,979 | | |
| 242,187 | |
Total | |
$ | 326,107 | | |
$ | 426,838 | |
Other lease information is as
follows:
| | December 31, | |
| | 2023 | | | 2022 | |
Weighted-average remaining lease term – operating leases | | | 0.92 years | | | | 1.91 years | |
Weighted-average discount rate – operating leases | | | 5 | % | | | 5 | % |
Short term lease cost | | $ | 114,937 | | | $ | 89,380 | |
The following is a schedule of
future minimum payments under operating leases as of December 31, 2023:
| |
December 31, 2023 | |
Not later than 1 year | |
$ | 240,835 | |
Between 1 to 2 years | |
| 111,613 | |
Between 2 to 3 years | |
| 10,373 | |
Total lease payments | |
| 362,821 | |
Less: imputed interest | |
| (36,714 | ) |
Total operating lease liabilities, net of interest | |
$ | 326,107 | |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 10 — EQUITY
Ordinary shares
As at December 31, 2023,
the Company is authorized to issue 5,000,000 ordinary shares. Each ordinary share is entitled to one vote. The holders of ordinary shares
are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors of the Company.
On April 3, 2024, the Company
completed the business combination with A SPAC I Acquisition Corp.
The equity of the Company as of
December 31, 2023 and 2022 represents 698,123 and 601,830 ordinary shares amounting to $6,981 and $6,018, respectively.
Subscription receivables
| |
December 31, | |
| |
2023 | | |
2022 | |
Balance at beginning of year | |
$ | 319,872 | | |
$ | — | |
Issuance of shares (Note 1) | |
| 2,866,856 | | |
| 319,872 | |
Settlement of subscription receivable (Note 2) | |
| (219,628 | ) | |
| — | |
Total | |
$ | 2,967,100 | | |
$ | 319,872 | |
| Note 2: | On January 18, 2023, the Company received $192,308 from
Seazen, reducing the subscription receivable by $192,308. On January 10, 2023, the Company issued and allotted additional 27,293 ordinary
shares to Tung Donald Fan and Hok Lun Alan Lau at the consideration of $812,573. On December 4, 2023, the Company issued and allotted
additional 69,000 shares to DoubleClick Services Limited at $2,054,283. Among the subscription receivable during the year, $27,320 was
settled by the professional consulting service rendered during the year ended December 31, 2023. |
Additional paid-in capital
| |
December 31, | |
| |
2023 | | |
2022 | |
Balance at beginning of year | |
$ | 1,458,941 | | |
| 257,821 | |
Directors’ remuneration (Note 1) | |
| — | | |
| 240,000 | |
Issuance of shares (Note 2) | |
| 2,865,893 | | |
| 961,120 | |
Total | |
$ | 4,324,834 | | |
| 1,458,941 | |
| Note 1: | The Company recorded remuneration to its directors, Mr. Siu,
Wing Fung Alfred and Ms. Fong, Hei Yue Tina. The remuneration to Mr. Siu, Wing Fung Alfred and Ms. Fong, Hei Yue Tina was $120,000
and $120,000 for the year ended December 31, 2022, respectively. The directors considered remuneration as a capital injection rather
than receiving it in cash, resulting in an $240,000 increase in paid-in capital. |
| Note 2: | On August 15, 2022, the Company issued 41,830 ordinary
shares to Seazen, increasing the additional paid-in capital by $961,120. On January 10, 2023, the Company issued 27,293 ordinary shares
to professional party for consulting service of 10 years, increasing the additional paid-in capital by $812,300. On December 4, 2023,
the Company issued additional 69,000 shares to DoubleClick Services Limited for consulting service of 10 years, increasing the additional
paid-in capital by $2,053,593. |
NOTE 11 — EMPLOYEE BENEFIT PLANS
HK SAR
The Company has a defined contribution
pension scheme for its qualifying employees. The scheme assets are held under a provident fund managed by an independent fund manager.
The Company and its employees are each required to make contributions to the scheme calculated at 5% of the employees’ basic salaries
on monthly basis.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 11 — EMPLOYEE BENEFIT PLANS
(cont.)
Thailand
The Company is obliged to make
social security payments within the first 15 days of the month over which it is accrued. Special concession had been determined by
the Government which saw the standard amount THB750 per month per person reduced to THB450 per month per person.
Cambodia
Every business employing one or
more workers must register its business and workers with the National Social Security Fund (the “NSSF”) for the Occupational
Risk Scheme (for work-related accidents and occupational diseases), the Health Care Scheme and the Pension Scheme.
Once registered, the business
must pay to the NSSF:
| ● | A monthly contribution equivalent to 0.8% of each worker’s
monthly average wages (between $0.40 and $2.40 per month per worker) for the Occupational Risk Scheme. |
| ● | A monthly contribution equivalent to 2.6% of a worker’s
monthly average wages (between $1.30 and $7.80 per month per worker) for the Health Care Scheme. |
| ● | A monthly contribution to the compulsory Pension Scheme, which
is jointly paid by the employer and the employee at the same rate of 2% (total of 4%) of the contributable wage for the first five years.
The contributable wage for the Pension Scheme ranges from between KHR400,000 (approximately $100) up to KHR1,200,000 (approximately $300). |
Kyrgyzstan
The Company has a defined contribution
pension scheme for its qualifying employees. The scheme assets are held under a provident fund managed by an independent fund manager.
The Company and its employees are each required to make contributions to the scheme calculated at 15% and 8%, respectively of the employees’
basic salaries on monthly basis.
NOTE 12 — PROVISION FOR INCOME TAXES
Cayman Islands
NewGenIvf Limited was incorporated
in the Cayman Islands and is not subject to tax on income or capital gains under current Cayman Islands law. In addition, upon payment
of dividends by these entities to the shareholders, no Cayman Islands withholding tax will be imposed.
HK SAR
Under the two-tiered profits tax rates regime,
Hong Kong tax residents are subject to Hong Kong Profits Tax in respect of profits arising in or derived from Hong Kong
at 8.25% for the first HK$2 million of profits of the qualifying group entity, and profits above HK$2 million will be taxed
at 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a
flat rate of 16.5%.
Accordingly, the HK SAR profits
tax is calculated at 8.25% on the first HK$2 million of the estimated assessable profits and at 16.5% on the remaining estimated
assessable profits.
Thailand
The companies incorporated in
Thailand are taxed on worldwide income. A company incorporated abroad is taxed on its profits arising from or in consequence of the business
carried on in Thailand. The corporate income tax (CIT) rate is 20%. A foreign company not carrying on business in Thailand is subject
to a final withholding tax (WHT) on certain types of assessable income (e.g. interest, dividends, royalties, rentals, and service fees)
paid from or in Thailand. The rate of tax is generally 15%, except for dividends, which is 10%, while other rates may apply under the
provisions of a double tax treaty (DTT).
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 12 — PROVISION FOR INCOME TAXES
(cont.)
Cambodia
The standard rate of corporate income tax (“CIT”)
for companies and permanent establishments who are classified as medium and large taxpayers is 20%. For companies and permanent establishments
who are classified as small taxpayers, the CIT rates are progressive rates from 0% to 20%. In view of the annual turnover of the company,
the annual turnover ranges from KHR1 billion to KHR6 billion for service and commercial sectors, the company shall consider
as the medium-sized company.
Kyrgyzstan
The company is subject to a corporate
income tax on their aggregate annual income earned worldwide. Non-resident legal entities carrying out business activities through
a permanent establishment in Kyrgyzstan are subject to profit tax on the income attributed to the activities of that permanent establishments.
Profit tax is calculated at a
rate of 10% of aggregate annual income less allowed deductions.
Significant components of the
provisions for income taxes for the year ended December 31, 2023, and 2022 were as follows:
| |
December 31, | |
| |
2023 | | |
2022 | |
Current tax provision Kyrgyzstan | |
| — | | |
| 196,116 | |
Current tax provision Cambodia | |
| — | | |
| 11,323 | |
Late penalty provision Kyrgyzstan | |
| — | | |
| 702 | |
Total provision for income taxes | |
$ | — | | |
$ | 208,141 | |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 12 — PROVISION FOR INCOME TAXES
(cont.)
| |
December 31, | |
| |
2023 | | |
2022 | | |
2021 | |
Income before taxes | |
$ | 108,418 | | |
$ | 343,988 | | |
$ | 156,184 | |
Tax expenses (credit) at the effective tax rates | |
| 10,732 | | |
| (124,591 | ) | |
| 36,755 | |
Tax effect on non-taxable income | |
| (39,173 | ) | |
| — | | |
| — | |
Tax effect on non-deductible expenses | |
| — | | |
| 369,101 | | |
| 114,656 | |
Tax effect on late penalty provision | |
| — | | |
| — | | |
| 145,295 | |
Change in valuation allowance | |
| 28,441 | | |
| — | | |
| — | |
Tax effect on utilization of tax losses | |
| — | | |
| (36,369 | ) | |
| (1,990 | ) |
Income taxes | |
$ | — | | |
| 208,141 | | |
$ | 294,716 | |
Deferred tax asset, net
Significant components of deferred tax assets,
net were as follows:
| |
December 31, 2023 | | |
December 31, 2022 | |
| |
USD | | |
USD | |
Deferred tax assets: | |
| | | |
| | |
– Net operating loss carry forward | |
| 28,441 | | |
| — | |
Less: valuation allowance | |
| (28,441 | ) | |
| — | |
Deferred tax assets, net | |
| — | | |
| — | |
As of December 31, 2023 and 2022, the Company
had net operating loss carry forward of $164,721 and $297,207. The Company believes it is less likely than not that its operations will
be able to fully utilize its deferred tax assets related to the net operating loss carry forward. As a result, the Company provided 100%
allowance on deferred tax assets on net operating loss.
NOTE 13 — DISAGGREGATED REVENUES
The Company’s main business
operations are to provide: (i) IVF treatment service; and (ii) surrogacy and ancillary caring services.
| |
For the year ended December 31, | |
Revenue from external customers | |
2023 | | |
2022 | | |
2021 | |
IVF treatment service | |
$ | 4,021,696 | | |
$ | 2,819,163 | | |
$ | 3,199,683 | |
Surrogacy, ancillary caring and other services | |
| 1,114,457 | | |
| 3,125,027 | | |
| 918,437 | |
Total revenues | |
$ | 5,136,153 | | |
$ | 5,944,190 | | |
$ | 4,118,120 | |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 13 — DISAGGREGATED REVENUES
(cont.)
Geographical information
| |
December 31, | |
Revenue from external customers originated from | |
2023 | | |
2022 | | |
2021 | |
HK SAR | |
$ | 34,038 | | |
| — | | |
$ | — | |
Kyrgyzstan | |
| 3,123,593 | | |
| 5,060,973 | | |
| 3,110,483 | |
Cambodia | |
| 621,619 | | |
| 377,608 | | |
| 313,737 | |
Thailand | |
| 1,356,903 | | |
| 505,609 | | |
| 693,900 | |
Total revenues | |
$ | 5,136,153 | | |
| 5,944,190 | | |
$ | 4,118,120 | |
The revenue information above
is based on the locations where the revenue originated.
| |
December 31, | |
Long-lived assets located at | |
2023 | | |
2022 | | |
2021 | |
HK SAR | |
$ | 584 | | |
$ | — | | |
| | |
Kyrgyzstan | |
| — | | |
| 22,513 | | |
| 20,835 | |
Cambodia | |
| 137,472 | | |
| 229,085 | | |
| 332,799 | |
Thailand | |
| 307,948 | | |
| 254,745 | | |
| 238,744 | |
| |
$ | 446,004 | | |
$ | 506,343 | | |
| 592,378 | |
The Company’s long-lived assets
consist of plant and equipment, net and operating leases right-of-use assets, net.
NOTE 14 — RISKS
A. Credit
risk
Accounts receivable
In order to minimize the credit
risk, the management of the Company monitors and ensures that follow-up action is taken to recover overdue debts. The Company considers
the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing
basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk
of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers
available reasonable and supportive forward-looking information, such as GDP growth rate and nominal GDP per capita. Based on the
impairment assessment performed by the Company, the directors consider the loss allowance for account receivables as of December 31,
2023 and 2022 is $19 and $26, respectively.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 14 — RISKS (cont.)
A. Credit
risk (cont.)
Cash and cash equivalents
The credit risk on liquid funds
is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. The Company
is exposed to concentration of credit risk on liquid funds which are deposited with several banks with high credit ratings.
Deposits and other receivables, amount due from
shareholders and loan to A SPAC I
The Company assessed
the impairment for deposits and other receivables, due from shareholders and loan to A SPAC I individually based on internal credit
rating and ageing of these debtors which, in the opinion of the directors, have no significant increase in credit risk since initial
recognition. Based on the impairment assessment performed by the Company, the directors consider the loss allowance for deposits and
other receivables, due from shareholders and loan to A SPAC I as of December 31, 2023 is $14, $17,818 and Nil, respectively.
The loss allowance for deposits and other receivables, due from shareholders and loan to A SPAC I as of December 31, 2022 is
$141, $17,059 and Nil, respectively. The loss allowance for deposits and other receivables and amount due from shareholders as of
December 31, 2021 was $115 and $6,312 and Nil, respectively.
B. Interest
risk
Cash flow interest rate risk
The Company is exposed to cash
flow interest rate risk through the changes in interest rates related mainly to the Company’s variable-rates bank balances.
The Company currently does not
have any interest rate hedging policy in relation to fair value interest rate risk and cash flow interest rate risk. The directors monitor
the Company’s exposures on an ongoing basis and will consider hedging the interest rate should the need arises.
Sensitivity analysis
The sensitivity analysis below
has been determined by assuming that a change in interest rates had occurred at the end of the reporting period and had been applied to
the exposure to interest rates for financial instruments in existence at that date. 1% 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 had been 1%
higher or lower and all other variables were held constant, the Company’s net (loss) income for the years ended December 31,
2023, 2022 and 2021 would have increased or decreased by approximately $541, $275 and $287, respectively.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 14 — RISKS (cont.)
B. Interest risk (cont.)
Foreign currency risk
Foreign currency risk is the risk
that the holding of foreign currency assets will affect the Company’s financial position as a result of a change in foreign currency
exchange rates.
The Company’s monetary assets
and liabilities are mainly denominated in HK$, THB, KHR and RMB which are the same as the functional currencies of the relevant group
entities. Hence, in the opinion of the directors of the Company, the currency risk of US$ is considered insignificant. The Company currently
does not have a foreign currency hedging policy to eliminate currency exposures. However, the directors monitor the related foreign currency
exposure closely and will consider hedging significant foreign currency exposures should the need arise.
C. Economic
and political risks
The Company’s operations
are mainly conducted in Thailand, Cambodia and Kyrgyzstan. Accordingly, the Company’s business, financial condition, and results
of operations may be influenced by changes in the political, economic, and legal environments in Thailand, Cambodia and Kyrgyzstan.
The Company’s operations
in Thailand, Cambodia and Kyrgyzstan are subject to special considerations and significant risks. These include risks associated with,
among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely
affected by changes in the political and social conditions in Thailand, Cambodia and Kyrgyzstan, and by changes in governmental policies
with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods
of taxation, among other things.
D. Inflation
risk
Management monitors changes in
prices levels. Historically inflation has not materially impacted the Company’s consolidated financial statements; however, significant
increases in the price of labor that cannot be passed to the Company’s customers could adversely impact the Company’s results
of operations.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 15 — RELATED PARTY BALANCES
AND TRANSACTIONS
The summary of amount due from
and due to related parties as the following:
| | | | December 31, | |
| | Relationship | | 2023 | | | 2022 | |
Due from shareholders consist of the following: | | | | | | | | |
Mr. Siu Wing Fung, Alfred (“Mr. Siu”) and Ms. Fong Hei Yue, Tina (“Ms. Fong”) | | Shareholders and directors (note 1) | | $ | 354,285 | | | $ | 2,240,872 | |
| | | | | | | | | | |
Due to a related party consist of the following: | | | | | | | | | | |
Harcourt Limited | | A related company (note 2) | | $ | - | | | $ | (110,773 | ) |
| (1) | Ms. Fong is the spouse of Mr. Siu. As of December 31, 2023
and 2022, the due from shareholders balance was $354,285 and $2,240,872, respectively. |
| (2) | The directors and shareholders of Harcourt Limited are Mr. Siu
and Ms. Fong, Harcourt Limited therefore has the common ultimate beneficial owners with the Company. |
The balance due from shareholders
consist of the following:
| |
December 31, | |
| |
2023 | | |
2022 | |
Due from shareholders | |
$ | 372,103 | | |
$ | 2,257,931 | |
Less: allowance for expected credit loss | |
| (17,818 | ) | |
| (17,059 | ) |
| |
$ | 354,285 | | |
$ | 2,240,872 | |
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 15 — RELATED PARTY BALANCES
AND TRANSACTIONS (cont.)
The movement of allowances for
expected credit loss is as follow:
| |
December 31, | |
| |
2023 | | |
2022 | |
Balance at beginning of the year | |
$ | (17,059 | ) | |
$ | (6,312 | ) |
Provision | |
| (759 | ) | |
| (10,747 | ) |
Ending balance | |
$ | (17,818 | ) | |
$ | (17,059 | ) |
In addition to the transactions
and balances detailed elsewhere in these consolidated financial statements, the Company had the following transactions with related parties:
| |
December 31, | |
| |
2023 | | |
2022 | | |
2021 | |
Directors’ remuneration to Mr. Siu Wing Fung, Alfred | |
$ | 125,000 | | |
$ | 120,000 | | |
$ | 100,000 | |
Directors’ remuneration to Ms. Fong Hei Yue, Tina | |
| 125,000 | | |
| 120,000 | | |
| 100,000 | |
Waiver of related party balance of Mr. Siu Wing Fung, Alfred | |
| (88,151 | ) | |
| — | | |
| — | |
NOTE 16 — LOAN TO A SPAC I
On June 12, 2023, NewGenIvf Limited (the “Company”)
and A SPAC I Acquisition Corp (“A SPAC I”) entered into a First Amendment to Merger Agreement, pursuant to which
the Company agreed to provide non-interest bearing loans in an aggregate principal amount of up to $560,000 (the “Loan”)
to A SPAC I to fund amounts required to further extend the period of time available for A SPAC I to consummate a business combination,
and for working capital and payment of professional, administrative and operational expenses, and other purposes as mutually agreed by
A SPAC I and the Company. The Loan will only become repayable upon the closing of the Acquisition Merger. As of December 31, 2023,
$140,000 was outstanding under the loan. The Company completed the business combination with A SPAC I Acquisition Corp on April 3, 2024.
After the combination, the balance of loan to A SPAC I was eliminated in the subsequent period.
NEWGENIVF LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(Stated in US Dollars)
NOTE 17 — IMPACT
OF COVID-19
The COVID-19 has negatively
impacted the global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption of
financial markets. The Company experienced some resulting disruptions to the Company’s business operations, and the Company expected
the COVID-19 pandemic could have a material adverse impact on the Company’s business and financial performance.
Due to the ongoing recession caused
by the COVID-19, the Company’s business is likely to be adversely impacted. The effects of recession can also increase economic
instability with vendors and customers.
NOTE 18 — CONTINGENCIES
As of December 31, 2023 and 2022,
the Company was not a party to any legal or administrative proceedings.
First
Fertility Bishkek LLC (“FFB”), the Company incorporated in Kyrgyzstan, did not report the current year tax to
the tax authority till the reporting date since 2023. The late tax filing may lead to contingent tax penalty as of December 31,
2023. Since FFB had no profit for the year ended December 31, 2023, the tax department may not issue tax return at current tax
position. The tax return is not yet filed so it is not possible to give the Company evaluation of the likelihood of the outcome or
estimate the possible amount of tax penalty. The contingent tax penalty is reasonably possible and estimated at $486,706. Thus, no
provision was made. Except the potential tax issue, the Company concludes that there was no contingent liability, either
individually or in the aggregate, that could have resulted in an unfavorable outcome with a material adverse effect on the
Company’s results of operations, consolidated financial condition, or cash flows.
NOTE 19 — segment
information
The Company uses the management
approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by
the Company’s CODM, specifically the Group’s CEO and CFO, for making decisions, allocating resources and assessing performance.
The Company does not distinguish
revenues, costs and expenses between segments in its internal reporting, but instead reports costs and expenses by nature as a whole.
Based on the management’s assessment, the Group determines that it has only one operating segment and therefore one reportable segment
as defined by ASC 280. As such, all financial segment information required by the authoritative guidance can be found in these consolidated
financial statements.
NOTE
20 — SUBSEQUENT EVENTS
The Company evaluated subsequent
events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon
this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or
disclosure in the financial statements.
Convertible note
On February 29, 2024, A SPAC I
Acquisition Corp. (“ASCA”), A SPAC I Mini Acquisition Corp. (the then name of NewGenIvf Group Limited), NewGenIvf Limited
(“NewGenIvf”, the “Company”), A SPAC I Mini Sub Acquisition Corp. (the “Merger Sub”), and certain
buyers named therein led by JAK Opportunities VI LLC (collectively, the “Buyers” or “JAK”) entered into a securities
purchase agreement (the “Securities Purchase Agreement”), pursuant to which the NewGenIvf Group Limited agreed to issue and
sell to JAK, in a private placement, an aggregate of up to $3,500,000 principal amount of convertible notes (the “Notes”),
consisting of one or more tranches: (i) an initial tranche (the “Initial Tranche”) of an aggregate principal amount of Notes
of up to $1,750,000 and including an original issue discount of up to aggregate $122,500, and (ii) subsequent tranches of an aggregate
principal amount of Notes of up to $1,750,000 and including an original issue discount of up to aggregate $122,500.
On April 3, 2024, JAK received
a certain amount of ordinary shares of the NewGenIvf Group Limited (the “Commitment Shares”), which were converted from the
Company ordinary shares issued to JAK in February 2024 and equaled 295,000 ordinary shares of the NewGenIvf Group Limited, as well as
an additional 100,000 ordinary shares of the NewGenIvf Group Limited, which were converted from the Company ordinary shares transferred
by another shareholder of the Company to JAK in March 2024. In addition, a subsequent tranche of the Notes in the principal amount of
$250,000 was issued and sold to JAK shortly after the closing of the Business Combination. As such, as of April 4, 2024, an aggregate
principal amount of Notes of $2,000,000 were issued and sold to JAK.
Business combination
On April 3, 2024, the Company
completed the business combination with A SPAC I Acquisition Corp. After the combination, the combined company will be named “NewGenIvf
Group Limited” (“NewGenIvf Group”) and its shares and warrants are expected to begin trading on the Nasdaq Capital Market
under the tickers “NIVF”, and “NIVFW”, respectively, on April 4, 2024 .
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(a) Interest
on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day months
and shall be payable in arrears for on the first calendar day of each Fiscal Quarter (each, an “Interest Date”) with
the first Interest Date being [ ]. Interest shall be payable on each Interest Date, to the record holder of this Note on the applicable
Interest Date, in Ordinary Shares (“Interest Shares”) so long as there has been no Equity Conditions Failure; provided
however, that the Company may, at its option following notice to the Holder, pay Interest on any Interest Date in cash (“Cash
Interest”) or in a combination of Cash Interest and Interest Shares; provided that (x) during the period commencing on the Issuance
Date through, and including, the second anniversary of the Issuance Date, if no Equity Conditions Failure then exists (unless waived in
writing by the Holder), the Company may elect to pay all Interest due on any Interest Date in Interest Shares and (y) with respect to
any Interest Date after the second (2nd) anniversary of the Issuance Date, unless waived in writing by the Holder, the Company
shall be required to pay at least 2.00% (“Minimum Cash Interest Rate”) of any Interest due on such applicable Interest
Date in cash. The Company shall deliver a written notice (each, an “Interest Election Notice”) to each holder of the
Notes on or prior to the fifth (5th) Trading Day immediately prior to the applicable Interest Date (each, an “Interest Notice
Due Date” and the date such notice is delivered to all of the holders of Notes, the “Interest Notice Date”)
which notice (i) either (A) confirms that Interest to be paid on such Interest Date shall be paid entirely in Interest Shares or (B) elects
to pay Interest as Cash Interest or a combination of Cash Interest and Interest Shares and specifies the amount of Interest that shall
be paid as Cash Interest and the amount of Interest, if any, that shall be paid in Interest Shares and (ii) certifies that there has been
no Equity Conditions Failure. If an Equity Conditions Failure has occurred as of the Interest Notice Date, then unless the Company has
elected to pay such Interest as Cash Interest, the Interest Election Notice shall indicate that unless the Holder waives the Equity Conditions
Failure, the Interest shall be paid as Cash Interest. Notwithstanding anything herein to the contrary, if no Equity Conditions Failure
has occurred as of the Interest Notice Date but an Equity Conditions Failure occurs at any time prior to the Interest Date, (A) the Company
shall provide the Holder a subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Interest
shall be paid in cash. Interest to be paid on an Interest Date in Interest Shares shall be paid in a number of fully paid and nonassessable
shares (rounded to the nearest whole share in accordance with Section 3(a)) of Ordinary Shares equal to the quotient of (1) the amount
of Interest payable on such Interest Date less any Cash Interest paid and (2) the Interest Conversion Price in effect on the applicable
Interest Date.
(b) When
any Interest Shares are to be paid on an Interest Date, the Company shall (i) (A) provided that the Company’s transfer agent (the
“Transfer Agent”) is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program (“FAST”), credit such aggregate number of Interest Shares to which the Holder shall be entitled to
the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (B) if the
Transfer Agent is not participating in FAST, issue and deliver on the applicable Interest Date, to the address set forth in the register
maintained by the Company for such purpose pursuant to the Securities Purchase Agreement or to such address as specified by the Holder
in writing to the Company at least two (2) Business Days prior to the applicable Interest Date, a certificate, registered in the name
of the Holder or its designee, for the number of Interest Shares to which the Holder shall be entitled and (ii) with respect to each Interest
Date, pay to the Holder, in cash by wire transfer of immediately available funds, the amount of any Cash Interest.
(c) Prior
to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of inclusion
of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption in accordance
with Section 13 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during the continuance
of any Event of Default, the Interest Rate shall automatically be increased to eighteen percent (18.0%) per annum (the “Default
Rate”). In the event that such Event of Default is subsequently cured (and no other Event of Default then exists, including,
without limitation, for the Company’s failure to pay such Interest at the Default Rate on the applicable Interest Date), the adjustment
referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure;
provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure
of such Event of Default.
(i) the
failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on or prior
to the date that is five (5) days after the applicable Filing Deadline (as defined in the Registration Rights Agreement) or the failure
of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is five (5) days after the applicable
Effectiveness Deadline (as defined in the Registration Rights Agreement);
(ii) while
the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop
order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable Securities (as
defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities in accordance with the terms
of the Registration Rights Agreement, and such lapse or unavailability continues for a period of ten (10) consecutive days or for more
than an aggregate of thirty (30) days in any 365-day period (excluding days during an Allowable Grace Period (as defined in the Registration
Rights Agreement));
(iii) the
suspension (or threatened suspension) from trading or the failure (or threatened failure) of the Ordinary Shares to be trading or listed
(as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days;
(iv) the
Company’s (A) failure to cure a Conversion Failure or a Delivery Failure (as defined in the Warrants) by delivery of the required
number of Ordinary Shares within five (5) Trading Days after the applicable Conversion Date or exercise date (as the case may be) or (B)
notice, written or oral, to any holder of the Notes or Warrants, including, without limitation, by way of public announcement or through
any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Notes into Ordinary
Shares that is requested in accordance with the provisions of the Notes, other than pursuant to Section 3(d), or a request for exercise
of any Warrants for Ordinary Shares in accordance with the provisions of the Warrants;
(v) except
to the extent the Company is in compliance with Section 12(b) below, at any time following the tenth (10th) consecutive day
that the Holder’s Authorized Share Allocation (as defined in Section 12(a) below) is less than the sum of (A) the number of Ordinary
Shares that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without regard to any
limitations on conversion set forth in Section 3(d) or otherwise), and (B) the number of Ordinary Shares that the Holder would be entitled
to receive upon exercise in full of the Holder’s Warrants (without regard to any limitations on exercise set forth in the Warrants);
(vi) the
Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Make-Whole Amount, Interest, Late Charges
or other amounts when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure
to pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement)
or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and
thereby, except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains
uncured for a period of at least five (5) Trading Days;
(vii) the
Company fails to remove any restrictive legend on any certificate or any Ordinary Shares issued to the Holder upon conversion or exercise
(as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired by the Holder under the Securities Purchase
Agreement (including this Note) as and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited
by applicable federal securities laws, and any such failure remains uncured for at least five (5) days;
(viii) the
occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $100,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;
(ix) bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against
the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed within
thirty (30) days of their initiation;
(x) the
commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors,
or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission
by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company or any
Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure
sale or any other similar action under federal, state or foreign law;
(xi) the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or approving
as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company
or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any
substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order,
judgment or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period
of thirty (30) consecutive days;
(xii) a
final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company and/or any of
its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending
appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered
by insurance or an indemnity from a credit worthy party shall not be included in calculating the $100,000 amount set forth above so long
as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably
satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary
(as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;
(xiii) the
Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace period,
any payment with respect to any Indebtedness in excess of $100,000 due to any third party (other than, with respect to unsecured Indebtedness
only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect
to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach or violation
of any agreement for monies owed or owing in an amount in excess of $100,000, which breach or violation permits the other party thereto
to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event that would,
with or without the passage of time or the giving of notice, result in a default or event of default under any agreement binding the Company
or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the business, assets, operations
(including results thereof), liabilities, properties, condition (including financial condition) or prospects of the Company or any of
its Subsidiaries, individually or in the aggregate;
(xiv) other
than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation or warranty,
or any covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or
condition that is curable, only if such breach remains uncured for a period of five (5) consecutive Trading Days;
(xv) a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the Equity Conditions
are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Event of Default has occurred;
(xvi) any
breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 15 of this Note;
(xvii) any
Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs; or
(xviii) any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
8. REDEMPTIONS
AT THE COMPANY’S ELECTION.
14. VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without limitation,
the BVI Business Companies Act, 2004) and as expressly provided in this Note.
15. COVENANTS.
Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:
16. DISTRIBUTION
OF ASSETS. In addition to any adjustments pursuant to Sections 6 and 7, if the Company shall declare or make any dividend or other
distributions of its assets (or rights to acquire its assets) to any or all holders of Ordinary Shares, by way of return of capital or
otherwise (including without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then the Holder will be entitled to such Distributions as if the Holder had held the number of Ordinary Shares acquirable upon complete
conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for
such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the
date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Ordinary
Shares are to be determined for such Distributions (provided, however, that to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder
shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such Ordinary Shares as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall
be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held
similarly in abeyance) to the same extent as if there had been no such limitation).
17. AMENDING
THE TERMS OF THIS NOTE. Except for Section 3(d), which may not be amended, modified or waived by the parties hereto, the prior written
consent of the Holder shall be required for any change, waiver or amendment to this Note.
18. TRANSFER.
This Note and any Ordinary Shares issued upon conversion of this Note may be offered, sold, assigned or transferred by the Holder without
the consent of the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement.
19. REISSUANCE
OF THIS NOTE.
20. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and
consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise
by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or
remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any of the documents shall
not be deemed to be an election of Holder’s rights or remedies under such documents or at law or equity. The Company covenants to
the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth
or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received
by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that
the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary
and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of
proving actual damages and without posting a bond or other security. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of
this Note (including, without limitation, compliance with Section 7).
21. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to
enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts
due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original Principal
amount hereof.
22. CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be construed against
any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Note instead of just the provision in which
they are found. Unless expressly indicated otherwise, all section references are to sections of this Note. Terms used in this Note and
not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to such terms on the Closing
Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
23. FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 23 shall permit any waiver of any
provision of Section 3(d).
24. DISPUTE
RESOLUTION.
(i) In
the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a Black-Scholes
Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate or the applicable Redemption Price
(as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or
the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two (2)
Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating
to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion Price, such Black-Scholes Consideration
Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption Price
(as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder
(as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select
an independent, reputable investment bank reasonably acceptable to the Company (so long as such consent or approval by the Company is
not unreasonably or untimely delayed) to resolve such dispute.
(ii) The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 24 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the Holder
selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding
clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood
and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission
Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives
its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such
investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank
prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested
by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other
support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii) The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder
of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of
such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
25. NOTICES;
CURRENCY; PAYMENTS.
26. CANCELLATION.
After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this Note
shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.
27. WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other
demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase
Agreement.
28. GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the internal laws of the State of Delaware, without giving effect to any provision
or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Delaware. Except as otherwise required by Section 24 above, the Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce
a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of
Section 24. The Company (on behalf of itself and each of its Subsidiaries) hereby appoints the agent for service of process listed in
[Schedule 9(a)] to the Securities Purchase Agreement, as its agent for service of process in Delaware. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The choice of the laws of the State of Delaware as the governing
law of this Note is a valid choice of law and would be recognized and given effect to in any action brought before a court of competent
jurisdiction in the British Virgin Islands, except for those laws (i) which such court considers to be procedural in nature, (ii) which
are revenue or penal laws or (iii) the application of which would be inconsistent with public policy, as such term is interpreted under
the laws of the British Virgin Islands. The choice of laws of the State of Delaware as the governing law of this Note will be honored
by competent courts in the PRC, subject to compliance with relevant PRC civil procedural requirements. The Company or any of their respective
properties, assets or revenues does not have any right of immunity under British Virgin Islands, the PRC or Delaware law, from any legal
action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from set-off or counterclaim,
from the jurisdiction of any British Virgin Islands and the PRC, Delaware or United States federal court, from service of process, attachment
upon or prior to judgment, or attachment in aid of execution of judgment, or from execution of a judgment, or other legal process or proceeding
for the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or
any other matter under or arising out of or in connection with this Note; and, to the extent that the Company, or any of its properties,
assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may
at any time be commenced, the Company hereby waives such right to the extent permitted by law and hereby consents to such relief and enforcement
as provided in this Note and the other Transaction Documents.
29. JUDGMENT
CURRENCY.
(a) If
for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 29 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:
(i) the
date actual payment of the amount due, in the case of any proceeding in the courts of Delaware or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(ii) the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which
such conversion is made pursuant to this Section 29(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).
(b) If
in the case of any proceeding in the court of any jurisdiction referred to in Section 29(a)(ii) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c) Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.
30. SEVERABILITY.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining
provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions of
the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question
does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).
31. MAXIMUM
PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that
the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of
such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
32. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
33. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this
Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public
information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business
Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Report of Foreign Private
Issuer on Form 6-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating
to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately
upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification
from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained
in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained
in this Section 33 shall limit any obligations of the Company, or any rights of the Holder, under Section [4(i)] of the Securities Purchase
Agreement.
34. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may
possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
35. TAXES.
(a) Without
limiting any other provision of this Note, any and all payments by the Company hereunder shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto
(collectively referred to as “Taxes”) unless the Company is required to withhold or deduct any amounts for, or on account
of Taxes pursuant to any applicable law. If the Company shall be required to deduct any Taxes from or in respect of any sum payable hereunder
to the Holder, (i) the sum payable shall be increased by the amount by which the sum payable would otherwise have to be increased (the
“make-whole amount”) to ensure that after making all required deductions (including deductions applicable to the make-whole
amount) the Holder would receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Company
shall make such deductions and (iii) the Company shall pay the full amount withheld or deducted to the relevant governmental authority
within the time required. Upon the request of the Company, the Holder shall provide the Company with such duly completed and executed
forms or certificates prescribed by law as a basis for claiming an exemption from, or a reduction of, any Taxes imposed on payments made
hereunder.
(b) In
addition, the Company agrees to pay to the relevant governmental authority in accordance with applicable law any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or in
connection with the execution, delivery, registration or performance of, or otherwise with respect to, this Note (“Other Taxes”).
(c) The
Company shall deliver to the Holder official receipts, if any, in respect of any Taxes and Other Taxes payable hereunder promptly after
payment of such Taxes and Other Taxes or other evidence of payment reasonably acceptable to the Holder.
(d) If
the Company fails to pay any amounts in accordance with this Section 35, the Company shall indemnify the Holder within ten (10) calendar
days after written demand therefor, for the full amount of any Taxes or Other Taxes, plus any related interest or penalties, that are
paid by the Holder to the relevant governmental authority or other relevant governmental authority as a result of such failure.
(e) The
obligations of the Company under this Section 35 shall survive the termination of this Agreement and the payment of all amounts payable
hereunder.
IN WITNESS WHEREOF, the Company
has caused this Note to be duly executed as of the Issuance Date set out above.
☐ If this Conversion Notice is being delivered
with respect to an Alternate Conversion, check here if Holder is electing to use the following Alternate Conversion Price:
We hereby consent to the inclusion of our report dated September 28, 2023 to the Registration Statement on Form F-1 of NewGenIvf Group
Limited, relating to the audit of the consolidated balance sheets of NewGenIvf Limited and its subsidiaries (collectively the “Company”)
as of December 31, 2022, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’
deficit, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the financial statements)
included herein.
We consent to the incorporation by reference in this Registration
Statement on Form F-1 of NewGenIvf Group Limited of our report dated August 16, 2024, relating to the consolidated balance sheet of NewGenIvf
Limited and its subsidiaries as of December 31, 2023, and the related consolidated statement of operations and comprehensive income,
changes in shareholder’s equity, and cash flows for the years ended December 31, 2023 and the related notes, included in its Annual
Report on Form 20-F of NewGenIvf Group Limited for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission
on August 20, 2024. We also consent to the reference to us under the heading “Experts” in this Registration Statement.