第99.1展示文本
管理层讨论和分析
财务状况和经营业绩的结果
本管理层讨论与分析旨在为您提供关于截至2023年和2024年6月30日的我们的财务状况和经营业绩的叙述性解释。本部分应与我们未经审计的简明合并财务报表及本中期报告中的相关附注一起阅读。我们还建议您阅读我们2023财年的管理层讨论与分析以及审计的合并财务报表及附注,这些内容包含在我们于2023年12月31日结束之前申报给美国证券交易委员会的招股书中,招股书于2024年10月17日提交。
在本报告中,如在本报告中使用,除非上下文另有说明,“Springview”,“公司”,“我们”,“我们”或“我们” 指的是SpringView Holdings Ltd及其子公司和其他合并实体的业务总称。对“美元”和“US$”的引用是指美元,美国的法定货币。对“S$”的引用是指新加坡元,新加坡的法定货币。对“SEC”的引用是指证券和交易委员会。
所有基本报表均按照美国通用会计准则或U.S. GAAP进行编制。我们对本管理层讨论和分析中包含的部分数字进行了四舍五入调整。因此,部分表格中显示的数字总额可能不是前面数字的算术聚合。本讨论包含涉及风险、不确定性和假设的前瞻性声明。由于各种因素,我们的实际结果可能与这些前瞻性声明中预期的结果有实质性不同。
概述
我们公司通过间接完全拥有的子公司Springview Enterprises Pte. Ltd.(“Springview Singapore”)在新加坡设计和建造住宅和商业建筑。
我们的项目涵盖四种主要工作类型:(i) 新建 施工, (ii) 重建, (iii) 添加和改装 (A&A),以及 (iv) 其他施工服务。对于新建施工,现有房屋将被拆除并重新建造。我们的重建工作涉及对房屋的部分实质性更换。对于A&A工作,我们专注于对现有建筑结构进行轻微修改以满足现有建筑的要求。我们还提供其他施工服务,例如为客户进行翻新和设计咨询。通过与客户的对话,以了解他们的愿景和预算限制,我们帮助他们制定出可行的设计概念。
我们的项目可以通过(a)设计施工模式或(b)施工模式开展。当我们担任设计施工角色时,我们提供设计意见并且担任主要承包商。对于施工模式,我们仅担任承包商角色。对于设计施工角色,我们与相关建筑公司合作,提供量身定制的解决方案,包括概念设计图纸和详细实施计划,然后通过我们经验丰富的设计团队和施工团队的共同努力来执行。对于承包商角色,我们基于团队经验和与建筑师和分包商的现有关系,为客户提供质量施工工作。
凭借自2002年迄今的相当悠久运营历史,我们相信通过与客户建立良好关系,在繁忙的新加坡房地产开发市场树立了积极的声誉,从而获得了老客户的推荐。我们的运营团队负责处理咨询和反馈,与分包商合作解决项目中出现的任何问题。我们认为通过电话和即时通讯进行有效沟通可以确保快速解决问题。反过来,我们认为我们对高质量服务的承诺和解决客户反馈对于扩大我们的市场份额和确保公司整体业务成功至关重要。
影响我们财务状况和运营结果的因素
我们的经营业绩受到并将继续受到多种因素的影响,包括以下所列因素:
我们在一个竞争激烈的行业板块中运营,我们的竞争对手可能在获得合同方面更加成功
我们在施工行业面临着激烈的竞争,某些竞争对手可能拥有更多的财力和人力资源,更强大的业绩记录和更加 established的声誉,从而让他们在寻找新客户和业务机会方面具有优势。此外,我们的竞争对手可能会在定价政策上更有侵略性,或者提供额外的服务来在我们参与的招标中获得合同。我们相信我们在市场上已建立起了良好的声誉和显著的品牌,为高质量项目的完成以及我们与客户、分包商、供应商和外部顾问的牢固关系,连同这些关系作为可靠的新项目推荐来源,都将帮助我们在市场上保持竞争力并有效地获得新客户。但是,如果我们无法保持按时向客户交付高质量项目的声誉,可能会导致我们无法成功竞争我们的竞争对手,且可能会对我们的业务和运营结果产生不利影响。
由于我们业务的性质,我们的营业收入和盈利能力是不可预测的
我们的施工项目营业收入具有非经常性质,且以项目为基础,这导致我们的营业收入和盈利在不同时期出现不可预测性。我们根据已完成工作的比例确认进行中合同的营业收入,某些进行中合同可能持续一年以上,这类项目的营业收入可能在不同财政年度中确认。根据我们进行中合同的完成阶段,某财政期间确认的营业收入和盈利可能会波动,因此,短期财务状态的结果可能不代表我们业务未来的财务表现和前景。为了确保营业收入增长,我们不断通过参与招标和从各种渠道寻求推荐积极构建合同储备。然而,并不能保证我们能够成功地获得新项目来替代已完成的项目,或者持续获得具有更高或可比合同价值和利润率的项目,这可能对我们的业务和运营结果产生重大不利影响。
通常,我们依赖承包商和供应商履行其义务,以完成我们的项目并满足客户的要求
提供施工服务是非常苛刻的,并需要我们的公司有效地协调和利用内部和外部资源,后者主要涉及分包商和供应商。我们依赖于分包商和供应商为我们提供我们委托他们提供的建筑材料和通风工作等质量产品或服务,以履行我们向客户交付基于合同工作范围和设计的完工项目的承包责任。虽然我们已经与几家可靠的供应商和分包商建立并保持了良好的关系和融洽,他们一直按时向我们提供优质产品和服务,但不能保证他们将来会继续提供符合我们质量和时间要求的产品和服务。此外,尽管我们公司已经尽最大努力对我们的项目中参与的分包商进行筛选,评估其能力基于包括业绩记录、声誉和价格竞争力在内的几个因素,我们仍然承担着与分包商不符合要求或未履约的某些风险,因为分包商与我们的客户没有直接的合同关系。此外,我们与分包商或供应商没有任何长期协议,因此不能保证我们能以符合我们预算的合理费率从现有的分包商或供应商那里采购类似的安排,或者如果发生这样的事件,我们可以成功地与其他提供者合作,这可能导致我们的业务和经营业绩受到重大和不利影响。
我们受制于几个宏观经济、监管、社会以及其他我们无法控制的因素
我们在新加坡的建筑和主要的A&A行业中进行业务,受到宏观经济、监管、社会和政治等多种因素的影响,这些因素超出了我们公司的控制范围。我们依赖新加坡继续成为一个稳定而具吸引力的居住地,因为我们的大多数客户都是寻求建造符合他们愿望的物业的住宅业主。我们在新加坡的目标客户群体增长可能会受到该国政治和社会稳定性、与税收和移民相关的关键政策和法规以及整体商业和市场情绪等因素的影响,所有这些都超出了我们的控制。此外,我们的业务还会受通货膨胀和利率环境的影响。截至招股说明书日期,我们已经看到通胀对我们业务的影响。例如,由于通货膨胀的影响,我们看到建筑材料的价格和劳工工资上涨。未来如果通胀压力加剧,我们的项目成本可能会进一步提高。我们无法保证我们能够将这些成本上涨的结果有效地转嫁给客户。利率上升还可能导致我们业务的借款成本增加。不能保证我们无法预测超出我们控制范围的这些因素是否会发展成为可能对我们未来业务运营产生不利和重大影响的方式。
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经营结果
截至2023年和2024年6月30日的六个月
以下表格详细列出了我们未经审计的综合经营成果,包括绝对金额和截至2023年和2024年6月30日的净收入百分比。这些信息应与我们未经审计的基本报表和相关说明一起阅读。任何时期的经营成果未必能反映将来任何时期可能出现的结果。
2021年6月30日止六个月 | ||||||||||||||||||||
2023 | 2024 | 2024 | 涨跌 | |||||||||||||||||
S$ | S$ | 美元 | S$ | % | ||||||||||||||||
营业收入 | 3,203,460 | 4,961,318 | 3,657,710 | 1,757,858 | 47.0 | |||||||||||||||
来自关联方的营业收入 | 171,467 | - | - | (171,467 | ) | (100 | ) | |||||||||||||
总收入 | 3,374,927 | 4,961,318 | 3,657,710 | 1,586,391 | 47.0 | |||||||||||||||
营业收入成本 | (2,314,210 | ) | (3,632,390 | ) | (2,677,964 | ) | (1,318,180 | ) | 46.6 | |||||||||||
相关方营业成本 | (163,302 | ) | - | - | 163,302 | (100 | ) | |||||||||||||
营业成本合计 | (2,477,512 | ) | (3,632,390 | ) | (2,677,964 | ) | (1,154,878 | ) | 46.6 | |||||||||||
毛利润 | 897,415 | 1,328,928 | 979,746 | 431,513 | 48.1 | |||||||||||||||
营业费用 | ||||||||||||||||||||
一般及管理费用 | (571,789 | ) | (954,366 | ) | (703,602 | ) | (382,577 | ) | 66.9 | |||||||||||
营业费用总计 | (571,789 | ) | (954,366 | ) | (703,602 | ) | (382,577 | ) | 66.9 | |||||||||||
营业利润 | 325,626 | 374,562 | 276,144 | 48,936 | 15 | |||||||||||||||
其他收入(费用) | ||||||||||||||||||||
利息费用,净额 | (28,309 | ) | (53,874 | ) | (39,718 | ) | (25,565 | ) | 90.3 | |||||||||||
其他收入 | 3,570 | 2,789 | 2,056 | (781 | ) | (21.9) | ||||||||||||||
其他综合支出, 净额 | (24,739 | ) | (51,085 | ) | (37,662 | ) | (26,346 | ) | 106.5 | |||||||||||
税前收入 | 300,887 | 323,477 | 238,482 | (388,774 | ) | 7.5 | ||||||||||||||
所得税支出 | (35,128 | ) | (76,053 | ) | (56,070 | ) | (40,925 | ) | 116.5 | |||||||||||
净收入 | 265,759 | 247,424 | 182,412 | (18,335 | ) | (6.9) | ||||||||||||||
综合收益 | 265,759 | 247,424 | 182,412 | (18,335 | ) | (6.9 | ) |
2023年和2024年截至6月30日六个月的比较
营业收入
我们主要通过施工项目获取营业收入,主要涵盖以下几大类工作:(i) 新建筑、(ii) 改建、(iii) 增加和改建(A&A),以及(iv) 其他一般承包服务,如翻新和设计咨询。由于我们的业务特性,我们的大部分营业收入来自具有不同合同规模的独立项目,是一次性收入。我们根据施工项目的完成程度和实际成本相对于项目总估算成本的为基础,通过输入法识别并逐步确认我们的营业收入。
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下表列明了我们按营业收入类别和期间指示的营业收入。
2021年6月30日止六个月 | ||||||||||||||||||||
2023 | 2024 | 2024 | 差异 | |||||||||||||||||
S$ | S$ | 美元 | S$ | % | ||||||||||||||||
新建施工 | 1,061,220 | 4,734,096 | 3,490,192 | 3,672,876 | 346 | |||||||||||||||
重建施工 | 835,098 | - | - | (835,098 | ) | (100 | ) | |||||||||||||
A&A | 1,031,272 | 227,222 | 167,518 | (804,050 | ) | (78 | ) | |||||||||||||
其他一般承包服务 | 447,337 | - | - | (447,337 | ) | (100 | ) | |||||||||||||
总收入 | 3,374,927 | 4,961,318 | 3,657,710 | 1,586,391 | 47 |
截至2023年6月30日和2024年,涉及新建施工项目的项目占我们营业收入的最大比例,分别占总营业收入的约31.4%和95.4%。重建工作的营业收入分别占截至2023年和2024年6月30日的总营业收入约24.7%和0%,而A&A工作的营业收入分别占总营业收入的约30.6%和4.6%。
Our total revenue increased by S$1,586,391, or 47.0%, from S$3,374,927 for the six months ended June 30, 2023, to S$4,961,318 ($3,657,710) for the six months ended June 30, 2024. This increase is primarily driven by an increase in revenue recognized from new construction work of S$3,672,875, or 346%, from S$1,061,220 for the six months ended June 30, 2023 to S$4,734,096 ($3,490,192) for the six months ended June 30, 2024. This substantial increase is primarily attributed to two factors: First, we initiated a major new construction project with a contract sum of S$2.9 million in the first two quarters of 2024, which generated approximately S$0.9 million in revenue. Second, we ramped up work on three existing sizeable projects that started in the second half of 2023. These projects are worth up to S$7.4 million in total, with S$3.2 million revenue recognized in the first half of 2024.
Revenue recognized from reconstruction work declined by S$835,098, or 100%, from S$835,098 for the six months ended June 30, 2023 to S$0 ($0) for the six months ended June 30, 2024. This decline resulted from the completion of the last project in August and November 2023, with no new reconstruction projects initiated in the subsequent period. Similarly, revenue recognized from A&A work declined by S$804,050 or 78%, from S$1,031,272 for the six months ended June 30, 2023 to S$227,222 ($167,518) for the six months ended June 30, 2024, due to more work was performed in the earlier period with two major projects done to near completion in December 2023, and no new A&A work initiated in the subsequent period. Additionally, our other general contracting services also decreased by 447,337, or 100%, from S$447,337 for the six months ended June 30, 2023 to S$0 (US$0) for the six months ended June 30, 2024, primarily due to the absence of new design consultancy services in the first two quarters of 2024.
For the six months ended June 30, | ||||||||||||||||||||
2023 | 2024 | 2024 | Variances | |||||||||||||||||
S$ | S$ | US$ | S$ | % | ||||||||||||||||
Commercial customers | 1,223,723 | - | - | (1,223,723 | ) | (100 | ) | |||||||||||||
Residential customers | 2,151,204 | 4,961,318 | 3,657,710 | 2,810,114 | 130.6 | |||||||||||||||
Total revenue | 3,374,927 | 4,961,318 | 3,657,710 | 1,586,391 | 47.0 |
All of our revenue is derived from projects contracted with residential customers for the six months ended June 30, 2024. Revenue from commercial customers decreased by S$1,223,723, or 100% from S$1,223,723 for the six months ended June 30, 2023 to nil for the six months ended June 30, 2024. This decrease is primarily due to no revenue being recognized for this project in the first half of 2024, and the absence of design consultancy services during this period. Revenue from residential customers increased by S$2,810,114, or 130.6% from S$2,151,204 for the six months ended June 30, 2023 to S$4,951,318 for the six months ended June 30, 2024. This increase is primarily due to more revenue being recognized for the new construction projects in the first half of 2024.
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Cost of revenue
For the six months ended June 30, | ||||||||||||||||||||
2023 | 2024 | 2024 | Variances | |||||||||||||||||
S$ | S$ | US$ | S$ | % | ||||||||||||||||
Subcontracting costs | 860,651 | 1,669,193 | 1,230,605 | 808,542 | 93.9 | |||||||||||||||
Material costs | 642,743 | 782,421 | 576,836 | 139,678 | 21.7 | |||||||||||||||
Labor costs | 522,256 | 661,511 | 487,696 | 139,255 | 26.7 | |||||||||||||||
Equipment rental and site costs | 144,526 | 179,074 | 132,022 | 34,548 | 23.9 | |||||||||||||||
Other direct costs | 307,336 | 340,191 | 250,805 | 32,855 | 10.7 | |||||||||||||||
Total cost of revenue | 2,477,512 | 3,632,390 | 2,677,964 | 1,154,878 | 46.6 |
The cost of revenue primarily consisted of subcontracting costs, material costs, labor costs, equipment rental and site costs and other direct costs incurred in contract performance. The total cost of revenue increased by S$1,154,878, or 46.6%, from S$2,477,512 for the six months ended June 30, 2023, to S$3,632,390 ($2,677,964) for the six months ended June 30, 2024. The approximately 93.9% overall increase in cost of revenue was in line with our increase in revenue, and primarily driven by a higher subcontracting cost incurred, which increased by S$ 808,542, or 93.9%, from S$860,651 for the six months ended June 30, 2023 to S$1,669,193 ($1,230,605) for the six months ended June 30, 2024. This increase was primarily driven by our strategic decision to secure and execute larger projects, which necessitated higher engagement with subcontractors. The larger projects with higher contract sums required more specialized subcontractor services, resulting in a significant increase in subcontracting expenses.
On the other hand, material costs showed a modest increase, rising by S$139,678, from S$642,743 to S$782,421 ($576,836). This 21.7% increase can be attributed to the procurement of higher-quality materials to meet the specifications of our larger projects, although the increase was contained through better pricing negotiations with suppliers. Labor costs increased by S$139,255, from S$522,256 to S$661,511 ($487,696), reflecting a 26.7% increment. This increase was largely due to higher number of workers. Lastly, equipment rental and site costs also rose slightly by S$34,548, from S$144,526 to S$179,074 ($34,548), representing an 23.9% increment, driven by the need for additional equipment to support our expanding project portfolio. These increases reflect our strategic investments in quality materials, skilled labor, and necessary equipment to meet project demands.
Gross Profit
For the six months ended June 30, 2023 and 2024, our gross profits were S$897,415 and S$1,328,928 ($979,746), respectively, and our gross profit margins were approximately 26.6% and 26.8%, respectively. Our gross profit increased by S$431,513, or approximately 48.1% primarily due to the significant increase in revenue recognized due to the larger projects that we worked on for the six months ended June 30, 2024.
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General and Administrative Expenses
The following table sets forth a breakdown of our general and administrative expenses for the periods indicated.
For the six months ended June 30, | ||||||||||||||||||||
2023 | 2024 | 2024 | Variances | |||||||||||||||||
S$ | S$ | US$ | S$ | % | ||||||||||||||||
Staff expenses | 339,352 | 379,607 | 279,864 | 40,255 | 11.9 | |||||||||||||||
Depreciation and amortization | 32,826 | 14,049 | 10,358 | (18,777 | ) | (57.2 | ) | |||||||||||||
Lease expenses | 63,916 | 79,916 | 58,918 | 16,000 | 25.0 | |||||||||||||||
Medical and insurance expenses | 35,353 | 32,064 | 23,639 | (3,289 | ) | (9.3 | ) | |||||||||||||
Transport and entertainment | 41,252 | 40,792 | 30,074 | (460 | ) | (1.1 | ) | |||||||||||||
Professional fees | 12,300 | 365,297 | 269,314 | 352,997 | 2,869.9 | |||||||||||||||
Provision for fines and charges | - | 15,225 | 11,225 | 15,225 | 100 | |||||||||||||||
Other miscellaneous expenses | 46,790 | 27,416 | 20,210 | (19,374 | ) | (41.4 | ) | |||||||||||||
General and administrative expenses | 571,789 | 954,366 | 703,602 | 382,577 | 66.9 |
General and administrative expenses consisted primarily of staff expenses, depreciation and amortization, operating lease expenses, medical and insurance, transport and entertainment, professional fees, provision for fines and charges and other miscellaneous expenses. General and administrative expenses increased by S$382,577 or approximately 66.9%, from S$571,798 for the six months ended June 30, 2023, to S$954,366 ($703,602) for the six months ended June 30, 2024, mainly due to an increase in professional fees resulted from incurrence of accounting, auditing in connection with the preparation and audit of financial statements under US GAAP. Additionally, staff expenses increased by S$40,255, or approximately 11.9%, from S$339,352 to S$379,607 ($279,864), mainly due to the increased number of employees from 63 to 74 to support our business and operation expansion. Lease expenses increased by S$16,000 or approximately 25.0% from S$63,916 to S$79,916 ($58,918) due to the new staff accommodation.
Interest Expenses, Net
Interest expenses, net mainly included accrued interest from loans and borrowings, lease liabilities and amount due to a related party. Interest expenses, net increased by S$25,565, or approximately 90.3% from S$28,309 for the six months ended June 30, 2023, to S$53,874 ($39,718) for the six months ended June 30, 2024. The increase was mainly due to an increased in amount borrowed from loans and borrowings from S$28,309 for the six months ended June 30, 2023 to S$49,015 (US$36,136) for the six months ended June 30, 2024
Other Income
Other income primarily consisted of government grants and other miscellaneous income. Other income decreased by S$781 or approximately 21.9% from S$3,570 for the six months ended June 30, 2023, to S$2,789 (US$2,056) for the six months ended June 30, 2024. This decline was primarily due to a reduction in government support.
Income Tax Expense
Our income tax expenses were S$35,128 and S$76,053 ($56,070) for the six months ended June 30, 2023 and 2024, respectively. We incurred higher income tax expenses for the six months ended June 30, 2024 which is in line with our higher income before income taxes provision resulting primarily from higher revenue and gross profit recognized for the period.
Net Income
As a result of the foregoing, our profit for the year decreased by S$18,335, or approximately 6.9%, from S$265,759 for the six months ended June 30, 2023, to S$247,424 ($182,412) for the six months ended June 30, 2024.
Earnings Per Share
Our earnings per share decreased by approximately S$0.002, or 19.4%, from approximately S$0.013 for the six months ended June 30, 2023 to approximately S$0.012 ($0.009) for the six months ended June 30, 2024. The computation of earnings per share is based on 20,000,000 of the total issued and outstanding shares of our Class A Shares and Class B Shares, retrospectively after a reorganization of our company.
6
Liquidity and Capital Resources
As of December 31, 2023 and June 30, 2024, our cash balances amounted to approximately S698,106 and S$153,914 ($113,472), respectively, and our current assets were S$6,048,082 and S$5,590,235 ($4,121,377), respectively, and our current liabilities were S$3,363,968 and S$2,966,337 ($2,186,919), respectively. For the six months ended June 30, 2023 and 2024, we generated profit of S$265,759 and S$247,424 ($182,412), respectively.
On October 17, 2024, we completed the initial public offering (the “IPO”) by issuing 1,500,000 Class A Ordinary Shares at a public offering price of $4.00 per share, for aggregate gross proceeds of approximately $6.0 million. The net proceeds to the Company from the IPO, after deducting the underwriting discount, the underwriters’ fees and expenses, and the Company’s estimated offering expenses, were approximately $5.2 million.
Cash Flows Analysis
For the six months ended June 30, 2024 and 2023
The following table sets forth a summary of our cash flows for the periods indicated.
For the six months ended June 30, | ||||||||||||
2023 | 2024 | 2024 | ||||||||||
S$ | S$ | US$ | ||||||||||
Net cash used in operating activities | (106,977 | ) | (186,104 | ) | (137,205 | ) | ||||||
Net cash provided by investing activities | - | - | - | |||||||||
Net cash used in financing activities | (127,032 | ) | (358,088 | ) | (263,999 | ) | ||||||
Net changes in cash | (234,009 | ) | (544,192 | ) | (401,204 | ) | ||||||
Cash at the beginning of the period | 348,685 | 698,106 | 514,676 | |||||||||
Cash at the end of the period | 114,676 | 153,914 | 113,472 |
Operating Activities
Changes in cash flow from operating activities from the six months ended June 30, 2023 to the month ended June 30, 2024
We had net cash used in operating activities of S$186,104 ($137,205) for the six months ended June 30, 2024, compared to net cash used in operating activities of S$106,977 for the six months ended June 30, 2023. The increase in cash flow used in operating activities for six months ended June 30, 2024, is primarily a result of:
(1) | a decrease in net income of S$51,483 mainly due to an increase in professional fees resulted from incurrence of accounting, auditing and legal fees in connection to our preparation of an initial public offering; and |
(2) | a decrease in accounts receivable of S$291,713 ($215,065) for the six months ended June 30, 2024, as compared to an increase in accounts receivable of S$136,972 for the six months ended June 30, 2023, mainly due to most accounts receivables being collected as of June 30, 2024 and |
(3) | an increase in contract assets of S$483,734 ($356,631) for the six months ended June 30, 2024, as compared to an increase in contract assets of S$163,925 for the six months ended June 30, 2023, as more work was performed for the latter period resulting in higher amount of revenue recognized but has yet to be billed to the customers; and |
7
(4) | partially offset by a decrease in accounts payable of S$725,371 ($534,777) for the six months ended June 30, 2024, as compared to a decrease in accounts payable of S$402,477 for the six months ended June 30, 2023, as the Company settled more accounts payable during the six months ended June 30, 2024 since the payment due dates has been arrived. |
Investing Activities
For the six months ended June 30, 2023 and 2024, no investing activities occurred.
Financing Activities
For the six months ended June 30, 2023, net cash used in financing activities was S$127,032 which was primarily consisted of proceeds from loans and borrowings of S$300,000 and offset by repayment of loans and borrowings of S$195,589, repayment of amount due to a related party of S$202,715 and payment for finance lease obligations of S$28,728.
For the six months ended June 30, 2024, net cash provided by financing activities was S$358,089 ($263,999) which was primarily consisted of consisted of proceeds from loans and borrowings of S$319,713 ($235,708) and offset by repayment of loans and borrowings of S$233,756 ($172,336) and payment of offering cost of S$435,297 ($320,921).
Contingencies
In the normal course of business, our 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. Our 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. Our company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
As of June 30, 2024 and December 31, 2023, our company is subject to legal proceeding from a charge by Ministry of Manpower for an offence under Section 12(1) of the Workplace Safety and Health Act for failure to take measure to ensure the safety of its employees at work in one of its construction projects in 2019 which resulted in injuries to one worker and one fatality. Our company has claimed trial to this charge. For the same incident, our company was also charged under Section 5 of the Building Control Act for carrying out building work that was not approved by the Commissioner of Building Control. Additionally, our company is also subject to a claim from an employee of a subcontractor for a construction project for damages arising out of injuries and loss suffered as a result of work accident at the project site. The claimant seeks to hold our company and the subcontractor jointly and severally liable for the claim.
As of June 30, 2024 and December 31, 2023, our company’s accrued provision for the legal proceedings was S$385,000 ($283,840) and $385,000, respectively. For the six months ended June 30, 2023 and 2024, our company’s provision for estimated litigation loss was nil and nil, respectively
Capital Expenditures
No capital expenditures were incurred for the six months ended June 30, 2023 and 2024, as there were no purchases of property, plant, or equipment.
Off-Balance Sheet Commitments and Arrangements
We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s deficit/(equity) or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.
8
Contractual Obligations
For the six months ended June 30, 2024
The following table sets forth certain contractual obligations as of June 30, 2024 and the timing and effect that such obligations are expected to have on our liquidity and capital requirements in future periods:
As of June 30, | 2025 | 2026 | 2027 | 2028 | 2029 | Total | Total | |||||||||||||||||||||
S$ | S$ | S$ | S$ | S$ | S$ | US$ | ||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||
Loans and borrowings | 411,477 | 264,951 | 256,713 | 225,720 | 32,266 | 1,191,127 | 878,153 | |||||||||||||||||||||
Operating lease obligations | 161,388 | 41,803 | 20,000 | - | - | 223,191 | 164,547 | |||||||||||||||||||||
Finance lease obligations | 50,172 | 50,172 | 34,454 | 22,494 | 2,449 | 159,741 | 117,768 | |||||||||||||||||||||
Total contractual obligations | 623,037 | 356,926 | 311,167 | 248,214 | 34,715 | 1,574,059 | 1,160,468 |
Concentration of Credit Risk
Financial instruments that potentially subject our company to the concentration of credit risks consist of cash, accounts receivable and amounts due from a related party. The maximum exposures of such assets to credit risks are their carrying amounts as of the balance sheet dates. Our company deposits its cash with financial institutions located in Singapore. As of December 31, 2023 and June 30, 2024, S$698,106 and S$153,914 ($113,472) were deposited with financial institutions located in Singapore. The Deposit Protection Scheme introduced by the Singapore Government insured each depositor at one bank for a maximum amount of S$75,000. Our company believes that no significant credit risk exists as these financial institutions have high credit quality and our company has not incurred any losses related to such deposits.
For the credit risk related to accounts receivable, our company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. Our company determines its allowance for credit losses for account receivable using an aging schedule. Our company estimates the credit loss rates based on historical loss information, aging of receivables and management’s judgements, including current and reasonable and supportable forecasted economic conditions compared to the economic conditions using the historical information. The management believes that its contract acceptance, billing and collection policies are adequate in minimizing material credit risk. Application of progress payment of contract work is made on a regular basis. Our company seeks to maintain strict control over its outstanding receivables.
Credit risk on amounts due from a related party is not significant as the timing of payment is controlled by common director and shareholders taking into account cash flow requirements of our company and there has been no significant increase in the risk of default nor impairment recognized on the amounts due from a related party since initial recognition.
Currency risk
Our company’s operating activities are transacted in S$. Foreign exchange risk may arise from future commercial transactions, and from fluctuations and the degree of volatility of foreign exchange rates between $ and S$.
Concentration of Customers
For the six months ended June 30, 2023, four customers accounted for approximately 23%, 18%, 17% and 16% of the company’s total revenue. For the six months ended June 30, 2024, four customers accounted for approximately 28%, 24%, 18% and 13% of the company’s total revenue.
As of December 31, 2023, three customers accounted for approximately 12%, 23% and 65% of the total accounts receivable. As of June 30, 2024, three customers accounted for approximately 45%, 44% and 11% of the total accounts receivable.
9
Concentration of Vendors
For the six months ended June 30, 2023 and 2024, our company did not have significant suppliers or subcontractors accounting for more than 10% of total purchases.
The table below sets out the suppliers or subcontractors who accounted for 10% or more of our company’s total accounts payable as of December 31, 2023 and June 30, 2024.
Percentage of accounts payable (%) | ||||||||||
Name of Supplier/Subcontractor | Products/services supplied | As of December 31, 2023 | As of June 30, 2024 | |||||||
Subcontractor A | Subcontract service | 18 | 27 | |||||||
Subcontractor D | Subcontract service | 11 | 3 |
Critical Accounting Policies and Use of Estimates
Our consolidated financial statements included elsewhere in this prospectus have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The preparation of 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. Out of our significant accounting policies, which are described in Note 3 — Summary of Significant Accounting Policies of our consolidated financial statements included elsewhere in this Form F-1, certain accounting policies are deemed “critical”, as they require management’s highest degree of judgement, estimates and assumptions. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. Authoritative pronouncements, historical experience and information, information that is currently available to our company and assumptions that our company believes to be reasonable under the circumstances are used as the basis for making estimates and judgements. Actual results may differ from these estimates.
Revenue Recognition
Our company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), on January 1, 2021 using the modified retrospective approach. Our company’s accounting for revenue recognition remains substantially unchanged prior to adoption of ASC 606. The effect from the adoption of ASC 606 was not material to our company’s consolidated financial statements.
Our company recognizes revenue to depict the transfer of promised goods or services (that is, an asset) to customers in an amount that reflects the consideration to which our company expects to receive in exchange for those services. The following five steps defined under ASC 606 are applied to achieve the core principle of revenue standard:
(i) | identify the contract with the customer; |
(ii) | identify the performance obligations in the contract; |
(iii) | determine the transaction price; |
(iv) | allocate the transaction price to the performance obligations in the contract; and |
(v) | recognize revenue when our company satisfies a performance obligation. |
10
Our company generates revenue mainly from construction projects with the following major categories of works: (i) new construction, (ii) reconstruction, (iii) A&A, and (iv) other general contracting services, such as renovation and design consultation. For new construction, the existing house will be demolished, and a new house will be rebuilt. Reconstruction works involve replacement of substantial part of the house. For A&A works, minor modifications are made to existing structures within the existing building requirements while other general contracting services include renovation and design consultation services.
For the six months ended June 30, | ||||||||||||
2023 | 2024 | 2024 | ||||||||||
S$ | S$ | $ | ||||||||||
New construction | 1,061,220 | 4,734,096 | 3,490,192 | |||||||||
Reconstruction | 835,098 | - | - | |||||||||
A&A | 1,031,272 | 227,222 | 167,518 | |||||||||
Other general contracting services | 447,337 | - | - | |||||||||
Total revenue | 3,374,927 | 4,961,318 | 3,657,710 |
Our company assessed that the four major categories of revenue share the substantially the same characteristics and nature of terms in our contracts with customers and follows the same pattern of transfer of promised services to customers, and thus apply the same revenue recognition policies to all our revenue.
Our company enters into construction contracts with customers that create enforceable rights and obligations and for which it is probable that our company will collect the consideration to which it will be entitled as services are transferred to the customers. It is standard practice for our company to have the agreements with our customers in writing. All the agreements have commercial substance, as each contract with the customer has payment terms specified based upon fulfilment of certain conditions and agreed methods charged on monthly basis. Our company will submit monthly progress claim to the customer, and after our company receives the interim progress certificate certified by the appointed quantity surveyor, our company will issue a sales invoice to the customer. As our company’s customers are required to pay at different billing stages over the contract period, such progress payments limit our company’s exposure to credit risk. Our company also reasonably expects that the effects on the financial statements of applying ASC 606 to the portfolio of contracts would not differ materially from applying ASC 606 to the individual contracts within that portfolio.
Our company is responsible for a series of work including but not limited to those stated under the scope of work, which can include the design of the project, obtaining the relevant permits and approvals from authorities, engineering, site clearance, procurement of materials, construction and interior fitting-out/installation as part of the contract. Our company believes these services are not distinct as they are highly interrelated and the contract includes a significant service of integrating the various services into the combined work the customer is contracting for, which is the completed property. The contracts may include retentions paid at the end of the project as a warranty to ensure our company meets the contract requirements. However, since the customer does not have the option to separately purchase the warranty and there are no additional services to the customer during the retention period, such warranty is not recognized as a separate performance obligation. Our company has concluded that the promises to be delivered on the construction contract would be one single performance obligation, and therefore no allocation of the transaction price is required.
Our company’s contracts with each customer are with fixed price and provide for milestone billings based upon the attainment of specific project objectives to ensure our company meets the contractual requirements. The contract does not have variable consideration. However, the contract subject to modification in the form of unpriced or pending change orders or claims that either increase or decrease the contract price. Contract modification is accounted for as part of the existing contract as the remaining work is not distinct and form part of a single performance obligation that is partially satisfied at the date of the contract modification. The impact of contract modification has on the contract price and our company’s measure of progress towards complete satisfaction of the performance obligation is recognized as a cumulative catch-up adjustment to revenue at the date of contract modification.
Our company is not required to assess whether a contract contains a significant financing component if our company expects, at contract inception, that the period between payment by the customers and the transfer of promised services to the customers will be less than one year. Further, our company believes that with its monthly progress billings there is no financing component in its contracts. There are no non-cash and payable consideration for any services provided by our company.
11
Critical Accounting Estimates
Our company recognizes revenue based on our company’s actual contract costs incurred to the satisfaction of a performance obligation relative to the total estimated costs for the satisfaction of that performance obligations. This input method faithfully depicts the transfer of value to the customer when our company is satisfying a performance obligation that includes several interrelated tasks or activities for a combined output that requires our company to coordinate the work of subcontracts and employees. The critical estimate is the total estimated costs, which includes labor, materials, overhead, and subcontractor expenses. Accurate estimates are vital to avoid cost overruns and ensure profitability and is crucial to the revenue recognition based on the calculation of percentage of completion. To ensure the reasonableness of the total estimated cost, we usually rely on historical data, industry benchmarks, and professional expertise to develop these estimates on individual project level. Regular reviews and adjustments are necessary as new information becomes available throughout the project lifecycle. The following describes how we apply the key assumptions:
Project Scope: Changes in the project scope can affect cost estimates and, consequently, the completion percentage.
Schedule Variability: Delays or accelerations in project timelines can impact the percentage of completion.
Cost Overruns and Underruns: Unexpected increases or decreases in costs can skew percentage calculations. Regularly updating estimates is critical.
Forecasting Future Costs: Accurate forecasting of remaining costs is crucial. This may involve historical data, industry standards, and professional judgment based on project specifics and conditions.
Contract costs typically include direct labor, subcontract, professional costs, material and indirect costs related to contract performance. Changes in estimated costs to complete these obligations result in adjustments to revenue on a cumulative catch-up basis, which causes the effect of revised estimates to be recognized in the current period. No significant changes to estimated costs has occurred and there is no material impact on its revenue recognition for the six months ended June 30, 2023 and 2024.
When the current estimates of the total amount of consideration expected to be received in exchange for transferring promised goods or services to the customer, and contract costs indicate a loss, a provision for the entire loss on the contract is made as soon as the loss become evident. An adjustment is also made to reflect the effects of the customer’s credit risk. The loss on a contract is reported as an additional contract cost (an operating expenses), and not as a reduction of revenue or a non-operating expense. The total loss on contracts is negligible for the six months ended June 30, 2023 and 2024.
Our company recognizes revenue over time for all projects throughout the contract period.
Recently Issued Accounting Pronouncements
Our company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), our company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements and is intended to improve disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Our company is currently evaluating this ASU to determine its impact on our company’s disclosures.
Except as mentioned above, our company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our company’s consolidated balance sheets, statements of operations and comprehensive income and statements of cash flows.
12
SPRINGVIEW HOLDINGS LTD
INDEX TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
F-1
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, |
As of June 30, |
|||||||||||
2023 | 2024 | 2024 | ||||||||||
S$ (Audited) |
S$ (Unaudited) |
$ (Unaudited) |
||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash | 698,106 | 153,914 | 113,472 | |||||||||
Accounts receivable, net | 314,572 | 22,858 | 16,852 | |||||||||
Accounts receivable due from a related party | 145,842 | 105,053 | 77,450 | |||||||||
Contract assets | 4,813,313 | 5,297,048 | 3,905,226 | |||||||||
Other assets – current | 76,249 | 11,362 | 8,377 | |||||||||
Total current assets | 6,048,082 | 5,590,235 | 4,121,377 | |||||||||
Non-current assets | ||||||||||||
Property and equipment, net | 7,861 | 5,703 | 4,205 | |||||||||
Right-of-use assets, net | 295,174 | 357,070 | 263,248 | |||||||||
Other assets – non-current | 411,070 | 631,245 | 465,382 | |||||||||
Total non-current assets | 714,105 | 994,018 | 732,835 | |||||||||
Total assets | 6,762,187 | 6,584,253 | 4,854,212 | |||||||||
Liabilities and shareholders’ deficit | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | 1,354,368 | 628,998 | 463,726 | |||||||||
Contract liabilities | — | 50,000 | 36,862 | |||||||||
Other payables and accruals | 776,424 | 839,228 | 618,717 | |||||||||
Amount due to related parties | 604,229 | 904,040 | 666,500 | |||||||||
Loans and borrowings – current | 429,603 | 343,410 | 253,178 | |||||||||
Operating lease liabilities – current | 136,566 | 156,807 | 115,605 | |||||||||
Finance lease liabilities – current | 62,778 | 43,854 | 32,331 | |||||||||
Total current liabilities | 3,363,968 | 2,966,337 | 2,186,919 | |||||||||
Non-current liabilities | ||||||||||||
Deferred tax liabilities, net | 578,383 | 654,436 | 482,481 | |||||||||
Loans and borrowings – non-current | 836,662 | 689,099 | 508,035 | |||||||||
Operating lease liabilities – non-current | 42,217 | 55,922 | 41,228 | |||||||||
Finance lease liabilities – non-current | 73,173 | 103,251 | 76,121 | |||||||||
Total non-current liabilities | 1,530,435 | 1,502,708 | 1,107,865 | |||||||||
Total liabilities | 4,894,403 | 4,469,045 | 3,294,784 | |||||||||
Commitments and contingencies | ||||||||||||
Shareholders’ equity | ||||||||||||
*Class A Ordinary Shares, $0.0001 par value, 400,000,000 shares authorized, 10,000,000 shares issued and outstanding as of December 31, 2023 and June 30, 2024 | 1,352 | 1,352 | 1,000 | |||||||||
*Class B Ordinary Shares, $0.0001 par value, 100,000,000 shares authorized, 10,000,000 shares issued and outstanding as of December 31, 2023 and June 30, 2024 | 1,352 | 1,352 | 1,000 | |||||||||
Additional paid-in capital | 997,296 | 997,296 | 735,246 | |||||||||
Accumulated earnings | 867,784 | 1,115,208 | 822,182 | |||||||||
Total shareholders’ equity | 1,867,784 | 2,115,208 | 1,559,428 | |||||||||
Total liabilities and shareholders’ equity | 6,762,187 | 6,584,253 | 4,854,212 |
* | The shares and per share information are presented on a retrospective basis to reflect the reorganization. |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
SPRINGVIEW HOLDINGS LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the six months ended June 30, | ||||||||||||
2023 | 2024 | 2024 | ||||||||||
S$ (Unaudited) | S$ (Unaudited) | $ (Unaudited) | ||||||||||
Revenue | 3,203,460 | 4,961,318 | 3,657,710 | |||||||||
Revenue from a related party | 171,467 | — | — | |||||||||
Total revenue | 3,374,927 | 4,961,318 | 3,657,710 | |||||||||
Cost of revenue | (2,314,210 | ) | (3,632,390 | ) | (2,677,964 | ) | ||||||
Cost of revenue from a related party | (163,302 | ) | — | — | ||||||||
Total Cost of revenue | (2,477,512 | ) | (3,632,390 | ) | (2,677,964 | ) | ||||||
Gross profit | 897,415 | 1,328,928 | 979,746 | |||||||||
Operating expenses | ||||||||||||
General and administrative expenses | (571,789 | ) | (954,366 | ) | (703,602 | ) | ||||||
Total operating expenses | (571,789 | ) | (954,366 | ) | (703,602 | ) | ||||||
Income from operations | 325,626 | 374,562 | 276,144 | |||||||||
Other income (expenses) | ||||||||||||
Interest expenses, net | (28,309 | ) | (53,874 | ) | (39,718 | ) | ||||||
Other income | 3,570 | 2,789 | 2,056 | |||||||||
Total other expense, net | (24,739 | ) | (51,085 | ) | (37,662 | ) | ||||||
Income before income taxes | 300,887 | 323,477 | 238,482 | |||||||||
Income tax expenses | (35,128 | ) | (76,053 | ) | (56,070 | ) | ||||||
Net income | 265,759 | 247,424 | 182,412 | |||||||||
Comprehensive income | 265,759 | 247,424 | 182,412 | |||||||||
Weighted average number of outstanding ordinary shares | ||||||||||||
*Basic and diluted | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||
Earnings per share | ||||||||||||
Basic and diluted | 0.01 | 0.01 | 0.01 |
* | The shares and per share information are presented on a retrospective basis to reflect the reorganization. |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
SPRINGVIEW HOLDINGS LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT)/ EQUITY
Class A Ordinary shares | Class B Ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | ||||||||||||||||||||||||
*Shares | Amount | *Shares | Amount | capital | deficit | deficit | ||||||||||||||||||||||
S$ | S$ | S$ | S$ | S$ | ||||||||||||||||||||||||
Balance at January 1, 2023 | 10,000,000 | 1,352 | 10,000,000 | 1,352 | 997,296 | (1,522,382 | ) | (522,382 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 265,759 | 265,759 | |||||||||||||||||||||
Balance at June 30, 2023 (Unaudited) | 10,000,000 | 1,325 | 10,000,000 | 1,325 | 997,296 | (1,256,623 | ) | (256,623 | ) | |||||||||||||||||||
Balance at June 30, 2023 ($) (Unaudited) | 10,000,000 | 1,000 | 10,000,000 | 1,000 | 737,481 | (929,249 | ) | (189,768 | ) |
Class A Ordinary shares | Class B Ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | ||||||||||||||||||||||||
*Shares | Amount | *Shares | Amount | capital | earnings | equity | ||||||||||||||||||||||
S$ | S$ | S$ | S$ | S$ | ||||||||||||||||||||||||
Balance at January 1, 2024 | 10,000,000 | 1,352 | 10,000,000 | 1,352 | 997,296 | 867,784 | 1,867,784 | |||||||||||||||||||||
Net income | — | — | — | — | — | 247,424 | 247,424 | |||||||||||||||||||||
Balance at June 30, 2024 (Unaudited) | 10,000,000 | 1,352 | 10,000,000 | 1,352 | 997,296 | 1,115,208 | 2,115,208 | |||||||||||||||||||||
Balance at June 30, 2024 ($) (Unaudited) | 10,000,000 | 1,000 | 10,000,000 | 1,000 | 735,246 | 822,182 | 1,559,428 |
* | The shares and per share information are presented on a retrospective basis to reflect the reorganization. |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
SPRINGVIEW HOLDINGS LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, | ||||||||||||
2023 | 2024 | 2024 | ||||||||||
S$ (Unaudited) | S$ (Unaudited) | $ (Unaudited) | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income | 265,759 | 247,424 | 182,412 | |||||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||
Depreciation of property and equipment | 1,653 | 2,157 | 1,590 | |||||||||
Amortization of right-of-use assets | 91,748 | 106,865 | 78,786 | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Accounts receivable, net | 136,972 | 291,713 | 215,064 | |||||||||
Contract assets | (163,925 | ) | (483,734 | ) | (356,631 | ) | ||||||
Accounts receivable due from a related party | (171,467 | ) | 40,789 | 30,072 | ||||||||
Other assets | 6,402 | 404,439 | 298,171 | |||||||||
Accounts payable | (402,477 | ) | (725,371 | ) | (534,777 | ) | ||||||
Other payables and accruals | (29,585 | ) | (61,625 | ) | (45,433 | ) | ||||||
Contract liabilities | 183,132 | 50,000 | 36,862 | |||||||||
Income tax payable | 35,172 | — | — | |||||||||
Deferred tax liabilities | — | 76,053 | 56,070 | |||||||||
Operating lease liabilities | (60,361 | ) | (134,814 | ) | (99,391 | ) | ||||||
Net cash used in operating activities | (106,977 | ) | (186,104 | ) | (137,205 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Proceeds from loans and borrowings | 300,000 | — | — | |||||||||
Proceeds from a related party | — | 319,713 | 235,708 | |||||||||
Payment for deferred offering costs | — | (435,297 | ) | (320,921 | ) | |||||||
Repayment of amount to a related party | (202,715 | ) | (19,902 | ) | (14,673 | ) | ||||||
Repayment of loans and borrowings | (195,589 | ) | (233,756 | ) | (172,336 | ) | ||||||
Payments for finance lease liabilities | (28,728 | ) | 11,154 | 8,223 | ||||||||
Net cash used in financing activities | (127,032 | ) | (358,088 | ) | (263,999 | ) | ||||||
Net changes in cash | (234,009 | ) | (544,192 | ) | (401,204 | ) | ||||||
Cash at beginning of the year | 348,685 | 698,106 | 514,676 | |||||||||
Cash at end of the year | 114,676 | 153,914 | 113,472 | |||||||||
Supplement disclosures of cash flow information | ||||||||||||
Interest paid | 28,309 | 43,552 | 32,109 | |||||||||
Offset amount due to a related party | 499,925 | 663,737 | 489,337 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 and 2024
Note 1 — NATURE OF BUSINESS AND ORGANIZATION
Springview Holdings Ltd (the “Company” or “Springview (Cayman)”) is a holding company incorporated on September 27, 2023 in Cayman Islands while Springview (BVI) Ltd was incorporated on October 11, 2023 in the BVI with the Company being the sole shareholder of Springview (BVI) Ltd. The Company conducts its business primarily through its indirect wholly-owned subsidiary in Singapore, Springview Enterprises Pte. Ltd., providing four main types of works: (i) new construction, (ii) reconstruction, (iii) Additions and Alterations (A&A), and (iv) other general contracting services. For new construction, the existing house will be demolished, and a new house will be rebuilt. Reconstruction works involve replacement of substantial part of the house. For A&A works, minor modifications are made to existing structures within the existing building requirements while other general contracting services include renovation and design consultation services. The Company is a holding company with no business operation.
As at June 30, 2024, subsidiary of the Company includes the following entity:
Entity | Date of incorporation |
Place of incorporation |
Ownership | Principal activities | ||||
Springview (BVI) Ltd (Springview (BVI)) | October 11, 2023 | British Virgin Islands | 100% owned by Springview (Cayman) | Investment holding | ||||
Springview Enterprises Pte. Ltd. (Springview (S)) | June 3, 2002 | Singapore | 100% owned by Springview (BVI) | General contractors (Building construction including major upgrading works) |
Pursuant to a group reorganization (the “Reorganization”) to rationalize the structure of the Company and its subsidiary in preparation for the listing of the Company’s shares, the Company became the holding company on December 1, 2023. The Company and its subsidiary were under common control of the shareholders and their entire equity interests were also ultimately held by the shareholders immediately prior to the Reorganization, which have been accounted for as reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of the Company.
Note 2 — LIQUIDITY
In assessing the Company’s liquidity, the Company monitors and analyzes its cash balances and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations.
As of December 31, 2023 and June 30, 2024, the Company’s cash balances amounted to approximately S$698,106 and S$153,914 ($113,472) respectively. For the six months ended June 30, 2023 and 2024, we generated profit of S$265,759 and S$247,424 ($182,412), respectively. In addition to cash in bank, the Company has other current assets mainly composed of accounts receivable, accounts receivable due from a related party, contract assets and amounts due from a related party amounting to approximately S$5,273,727 and S$ 5,424,959 ($3,999,527) as of December 31, 2023 and June 30, 2024. All of them are short-term in nature and can be collected back within the Company’s operating cycles to support the Company’s liquidity needs.
On October 17, 2024, the Company completed its initial public offering (the “IPO”) by issuing 1,500,000 Class A Ordinary Shares at a public offering price of $4.00 per share, for aggregate gross proceeds of approximately $6.0 million. The net proceeds to the Company from the IPO, after deducting the underwriting discount, the underwriters’ fees and expenses, and the Company’s estimated offering expenses, were approximately $5.2 million.
F-6
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — LIQUIDITY (cont.)
Based on the management’s assessment of the future liquidity and performance of the Company and its available sources of financing, the Company believes that the current cash and cash flows generated from the Company’s future operating and financing activities will be sufficient to meet the cash requirements to fund planned operations and other commitments for at least the next twelve months from the date of the issuance of the consolidated financial statements.
Note 3 — Summary of Significant Accounting Policies
Basis of presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
Principles of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiary. All inter-company transactions and balances between the Company and its subsidiary have been eliminated upon consolidation. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.
Risks and uncertainties
The main operations of the Company are in Singapore. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in Singapore, as well as by the general state of the economy in Singapore. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in Singapore. The Company believes that it is following existing laws and regulations including its organization and structure disclosed in Note 1, such experience may not be indicative of future results.
Use of estimates and assumptions
The preparation of 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. On an ongoing basis, management evaluates estimates, including but not limited to, those related to allowance for credit losses, determination of the useful lives of property and equipment, impairment of long-lived assets, right-of-use assets, financing lease liabilities, revenue recognition, allowance for deferred tax assets and contingencies. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable. As a result, management makes judgments regarding the carrying values of the Company’s assets and liabilities that are not readily apparent from other sources. Authoritative pronouncements, historical experience and information, information that is currently available to the Company and assumptions that the Company believes to be reasonable under the circumstances are used as the basis for making estimates and judgements. Actual results may differ from these estimates.
F-7
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
Foreign currency translation
The accompanying consolidated financial statements are presented in the Singapore Dollars (“S$”), which is the reporting currency of the Company. The functional currency of the Company in the Cayman Islands is United States Dollars (“$”), its subsidiaries which are incorporated in British Virgin Islands and Singapore are United States Dollars (“$”) and Singapore Dollars (“S$”) respectively, which are their respective local currencies based on the criteria of ASC 830, “Foreign Currency Matters”.
In the consolidated financial statements of the Company, transactions in currencies other than the functional currency are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at the balance sheet date.
Convenience translation
Translations of amounts in the consolidated balance sheet, consolidated statements of income and comprehensive income and consolidated statements of cash flows from S$ into $ as of and for the six months ended June 30, 2024 are solely for the convenience of the reader and were calculated at the noon buying rate of $1 = S$1.3564, as published in H.10 statistical release of the United States Federal Reserve Board. No representation is made that the S$ amounts could have been, or could be, converted, realized or settled into $ at such rate or at any other rate.
Cash
Cash consists of demand deposit placed with commercial banks, which is unrestricted as to withdrawal and use and have original maturities of less than three months. Cash balances in bank accounts in Singapore with maximum amount of S$75,000 are insured under the Deposit Protection Scheme introduced by the Singapore government. Management believes that the commercial banks are of high credit quality and continually monitors the credit worthiness of these commercial banks.
Accounts receivable, net
On January 1, 2022, the Company adopted ASU 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology, which requires consideration of a broader range of information to estimate credit losses over the lifetime of the asset, including current conditions and reasonable and supportable forecasts in addition to historical loss information, to determine expected credit losses and applies to the measurement of impairment on financial assets measured at amortized cost, which includes trade receivable. Therefore, estimates of expected credit losses on trade receivables over their life will be required to be recorded at inception, based on historical information, current conditions, and reasonable and supportable forecasts.
Under ASU 2016-13, the Company has exposure to credit losses for financial assets, which include accounts receivable. The Company considered various factors, including nature, historical collection experience, the age of the accounts receivable balances, credit quality and specific risk characteristics of its customers, current economic conditions, forward-looking information including economic, regulatory, technological, environmental factors (such as industry prospects, GDP, employment, etc.), reversion period, and qualitative and quantitative adjustments to develop an estimate of credit losses. The Company has adopted the loss rate method to calculate the credit loss and considered the reverent factors of the historical and future conditions of the Company to make reasonable estimation of the risk rate.
Financial assets are presented as net of the allowance for credit losses in the consolidated balance sheets. The measurement of the allowance for credit losses is recognized through current expected credit loss expense. Current expected credit loss expense is included as a component of general and administrative expenses in the consolidated statements of income and comprehensive income. Write-offs are recorded in the period in which the asset is deemed. to be uncollectible. As of December 31, 2023 and June 30, 2024, the allowance for credit losses of accounts receivable was S$30,916 and S$19,735 ($14,550), respectively.
F-8
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
Other assets
Other assets, current and non-current, primarily consist of prepaid expenses, advance to suppliers and deposits for leases and tenders. These amounts bear no interest. Management reviews its prepayments, advances and refundable deposits placed with counterparties on a regular basis to determine if the allowance is adequate and adjusts the allowance when necessary. As of June 30, 2024, no allowance was deemed necessary. Management believes that these counterparties are of high credit quality and continually monitors the credit worthiness of these counterparties.
Deferred offering costs
Deferred offering costs consist of legal, underwriting fees and other costs incurred through the balance sheet date that are directly related to the proposed public offering. These costs, together with the underwriting discounts and commissions. will be charged to additional paid-in capital upon completion of the proposed public offering. Should the proposed public offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. As of December 31, 2023 and June 30, 2024, the Company has incurred S$324,955 and S$559,727 ($412,656) of deferred offering costs, respectively.
Property and equipment, net
Property and equipment are stated at cost, less accumulated depreciation, and impairment loss, if applicable. Depreciation is computed using the straight-line method after consideration of the estimated useful lives. The estimated useful lives are as follows:
Useful life | ||
Office equipment | 5 years | |
Computer equipment | 3 years |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterment, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Impairment for long-lived assets
The Company’s long-lived assets with finite lives, including property and equipment, net are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company will reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. For the six months ended June 30, 2024, no impairment of long-lived assets was recognized.
Fair value measurement
Accounting guidance defines fair value as the exchange price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.
F-9
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
Accounting guidance establishes a three-level fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are as follows:
● | Level 1 applies to assets or liabilities for which there are quoted prices, in active markets for identical assets or liabilities. |
● | Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
● | Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The Company considers the carrying value of its financial assets and liabilities, which consist of cash, accounts receivable, contract assets and contract liabilities, prepayments and other current assets, amounts due from related parties, accounts payable, lease liabilities — current, income tax payable, other payables and accruals approximate the fair value of the respective assets and liabilities as of December 31, 2023 and June 30, 2024 due to their short-term nature.
Contract assets and contract liabilities
Construction projects with performance obligations recognized over time that have revenue recognized to date in excess of cumulative billings are reported on the Company’s consolidated balance sheets as “contract assets”. Contract retentions, included in contract assets, represent amounts withheld by clients, in accordance with underlying contract terms until certain conditions are met. Provisions for estimated losses of contract assets on uncompleted contracts are made in the period in which such losses are determined. The majority of these amounts are expected to be billed and collected from clients within twelve months and are classified as current assets.
Contract liabilities on uncompleted construction contracts represent the amounts of cash collected from clients, billings to clients on contracts in advance of work performed and revenue recognized and provisions for losses. The majority of these amounts are expected to be earned within twelve months and are classified as current liabilities.
Leases
The Company accounts for leases under ASC 842. The Company determines if an arrangement is a lease at inception. A lease is classified at the inception date as either a finance lease or an operating lease. As the lessee, a lease is a finance lease when the lease meets any of the following criteria at lease commencement:
a) | The lease transfers ownership of the underlying asset to the lessee by the end of the lease term; |
b) | The lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise; |
c) | The lease term is for 75% or more of the remaining economic life of the underlying asset, unless the commencement date falls within the last 25% of the economic life of the underlying asset; |
d) | The present value of the sum of the lease payments equals or exceeds 90% of the fair value of the underlying asset; and |
e) | The underlying asset is of such as specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. |
F-10
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
Leases that do not meet any of the above criteria are accounted for as operating leases.
The Company entered into lease agreements as lessee to lease motor vehicles, office equipment and buildings from third parties.
The Company accounts for those motor vehicle and office equipment leases in accordance with ASC 842. The two primary accounting provisions the Company uses to classify transactions as financing leases or operating leases are (i) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term and (ii) the lease term is for 75% or more of the remaining economic life of the underlying asset unless the commencement date falls within the last 25% of the economic life of the underlying asset. The motor vehicle and office equipment leases contain one of the two terms, and the Company believes that the motor vehicle and office equipment leases should be classified as finance leases.
The Company accounts for those building leases in accordance with ASC 842. The Company believes that the building leases agreements do not contain nor meet any of the five primary accounting provisions the Company uses to classify transactions as financing leases. The building leases are classified as operating leases.
Finance lease assets and operating leases are included in right-of-use (“ROU”) assets, and finance lease liabilities are included in current and non-current finance lease liabilities, while operating lease liabilities are included in current and non-current operating lease liabilities, in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Finance and operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.
When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company used the rate implicit in the lease, if available, or the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
The Company elected the practical expedients under ASC 842 that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, the Company elected not to recognize lease assets and liabilities on its consolidated balance sheets.
The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. For the six months ended June 30, 2023 and 2024, the Company did not recognize impairment loss on its finance and operating lease ROU assets.
Revenue recognition
The Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), on January 1, 2021 using the modified retrospective approach. The Company’s accounting for revenue recognition remains substantially unchanged prior to adoption of ASC 606. The effect from the adoption of ASC 606 was not material to the Company’s consolidated financial statements.
The Company recognizes revenue to depict the transfer of promised goods or services (that is, an asset) to customers in an amount that reflects the consideration to which the Company expects to receive in exchange for those services. The following five steps defined under ASC 606 are applied to achieve the core principle of revenue standard:
(i) | Identify the contract with the customer |
(ii) | Identify the performance obligations in the contract |
(iii) | Determine the transaction price |
F-11
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
(iv) | Allocate the transaction price to the performance obligations in the contract |
(v) | Recognize revenue when the company satisfies a performance obligation |
The Company generates revenue mainly from construction projects with the following major categories of works: (i) new construction, (ii) reconstruction, (iii) A&A, and (iv) other general contracting services, such as renovation and design consultation. For new construction, the existing house will be demolished, and a new house will be rebuilt. Reconstruction works involve replacement of substantial part of the house. For A&A works, minor modifications are made to existing structures within the existing building requirements while other general contracting services include renovation and design consultation services.
The following table shows the Company’s revenue by revenue categories for the periods indicated.
For the six months ended June 30, | ||||||||||||
2023 (Unaudited) | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
New construction | 1,061,220 | 4,734,096 | 3,490,192 | |||||||||
Reconstruction | 835,098 | — | — | |||||||||
A&A | 1,031,272 | 227,222 | 167,518 | |||||||||
Other general contracting services | 447,337 | — | — | |||||||||
Total revenue | 3,374,927 | 4,961,318 | 3,657,710 |
The Company assessed that the four major categories of revenue share the substantially the same characteristics and nature of terms in its contracts with customers and follows the same pattern of transfer of promised services to customers, and thus apply the same revenue recognition policies to all its revenue.
The Company enters into construction contracts with customers that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services are transferred to the customers. It is standard practice for the Company to have the agreements with the Company’s customers in writing. All the agreements have commercial substance, as each contract with the customer has payment terms specified based upon fulfilment of certain conditions and agreed methods charged on monthly basis. The Company will submit monthly progress claim to its customer, and after the Company receives the interim progress certificate from the customer, the Company will issue a tax invoice to the customer. As the Company’s customers are required to pay at different billing stages over the contract period, such progress payments limit the Company’s exposure to credit risk. The company also reasonably expects that the effects on the financial statements of applying ASC 606 to the portfolio of contracts would not differ materially from applying ASC 606 to the individual contracts within that portfolio.
The Company is responsible for a series of work including but not limited to those stated under the scope of work, which can include the design of the project, obtaining the relevant permits and approvals from authorities, engineering, site clearance, procurement of materials, construction and interior fitting-out/installation as part of the contract. The Company believes these services are not distinct as they are highly interrelated and the contract includes a significant service of integrating the various services into the combined work the customer is contracting for, which is the completed property. The contracts may include retentions paid at the end of the project as a warranty to ensure the Company meets the contract requirements. However, since the customer does not have the option to separately purchase the warranty and there are no additional services to the customer during the retention period, such warranty is not recognized as a separate performance obligation. The Company has concluded that the promises to be delivered on the construction contract would be one single performance obligation, and therefore no allocation of the transaction price is required.
The Company’s contracts with each customer are with fixed price and provide for milestone billings based upon the attainment of specific project objectives to ensure the Company meets the contractual requirements. The contract does not have variable consideration. However, the contract subject to modification in the form of unpriced or pending change orders or claims that either increase or decrease the contract price. Contract modification is accounted for as part of the existing contract as the remaining work is not distinct and form part of a single performance obligation that is partially satisfied at the date of the contract modification. The impact of contract modification has on the contract price and the Company’s measure of progress towards complete satisfaction of the performance obligation is recognized as a cumulative catch-up adjustment to revenue at the date of contract modification.
F-12
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
The Company is not required to assess whether a contract contains a significant financing component if the Company expects, at contract inception, that the period between payment by the customers and the transfer of promised services to the customers will be less than one year. Further, the Company believes that with its monthly progress billings there is no financing component in its contracts. There are no non-cash and payable consideration for any services provided by the Company.
The Company recognizes revenue based on the Company’s actual contract costs incurred to the satisfaction of a performance obligation relative to the total estimated costs for the satisfaction of that performance obligation. This input method faithfully depicts the transfer of value to the customer when the Company is satisfying a performance obligation that includes several interrelated tasks or activities for a combined output that requires the Company to coordinate the work of subcontracts and employees. Contract costs typically include direct labor, subcontract, professional costs, material and indirect costs related to contract performance. Changes in estimated costs to complete these obligations result in adjustments to revenue on a cumulative catch-up basis, which causes the effect of revised estimates to be recognized in the current period. No significant changes to estimated costs have occurred and there is no material impact on its revenue recognition for the years ended December 31, 2023 and for the six months ended June 30, 2023 and 2024.
When the current estimates of the total amount of consideration expected to be received in exchange for transferring promised goods or services to the customer, and contract costs indicate a loss, a provision for the entire loss on the contract is made as soon as the loss become evident. An adjustment is also made to reflect the effects of the customer’s credit risk. The loss on a contract is reported as an additional contract cost (an operating expenses), and not as a reduction of revenue or a non-operating expense. The total loss on contracts is negligible for the years ended December 31, 2023 and for the six months ended June 30, 2023 and 2024.
The Company recognizes revenue over time for all projects throughout the contract period.
Warranty
The Company generally provides limited warranties for work performed under its contracts. At the time a sale is recognized, the Company records estimated future warranty costs under ASC 460. At completion, costs for warranties are estimated and these warranties are not service warranties separately sold by the Company. The estimated claim rates of warranty are based on actual warranty experience or Company’s best estimate. There were no such reserves for the six months ended June 30, 2023 and 2024 because the Company’s historical warranty expenses were immaterial to the Company’s consolidated financial statements.
Cost of revenue
Cost of revenue for construction contracts primarily consisted of material costs, subcontracting costs, direct labor costs, rental of equipment and other expenses incurred in contract performance. These costs are expenses as incurred.
Borrowing costs
All borrowing costs are recognized in interest expenses in the consolidated statement of income and comprehensive income in the period in which they are incurred.
General and administrative expenses
General and administrative expenses consist primarily of motor vehicle running expenses, travelling and entertainment and general administrative expenses such as of staff costs, rental expenses, depreciation, legal and professional fees and other miscellaneous administrative expenses.
F-13
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
Employee benefit
Defined contribution plan
The Company participates in the national pension schemes as defined by the laws of Singapore’s jurisdictions in which it has operations. Contributions to defined contribution pension schemes are recognized as an expense in the period in which the related service is performed.
Government grants
Government grants are compensation for expenses already incurred or for the purpose of giving immediate financial support to the Company. The government evaluates the Company’s eligibility for the grants on a consistent basis, and then makes the payment. Therefore, there are no restrictions on the grants.
Government grants are recognized when received and all the conditions for their receipt have been met and are recorded as part of “other income”. The total grants received from the Singapore Government were S$4,296 and S$2,784 ($2,052) for the year ended December 31, 2023 and for the six months ended June 30, 2024, respectively.
Income taxes
The Company accounts for income taxes under ASC 740. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No penalties and interest incurred related to underpayment of income tax for the six months ended June 30, 2024. The Company had no uncertain tax positions as of December 31, 2023 and June 30, 2024. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
As of June 30, 2024, the tax years ended December 31, 2020 through 2023 for the Company’s Singapore subsidiary remain open for statutory examination by Singapore tax authorities.
Related parties’ transactions
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence, such as a family member or relative, shareholder, or a related corporation.
F-14
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
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. As of December 31, 2023 and June 30, 2024, the Company’s accrued provision for its ongoing litigation matters was S$385,000 and S$385,000 ($291,821) respectively in its consolidated financial statements. For more information see “Note 15 — Commitments and Contingencies”.
Earnings per share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average number of ordinary shares outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of December 31, 2023 and June 30, 2024, there were no dilutive shares.
Segment reporting
ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in consolidated financial statements for detailing the Company’s business segments. Based on the criteria established by ASC 280, the Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. As a whole and hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. As the Company’s long-lived assets are located in Singapore, no geographical segments are presented.
Significant Risks
Currency risk
The Company’s operating activities are transacted in S$. Foreign exchange risk may arise from future commercial transactions, and from fluctuations and the degree of volatility of foreign exchange rates between $ and S$.
Concentration and Credit Risk
Financial instruments that potentially subject the Company to the concentration of credit risks consist of cash, accounts receivable, and amounts due from a related party. The maximum exposures of such assets to credit risks are their carrying amounts as of the balance sheet dates. The Company deposits its cash with financial institutions located in Singapore. As of December 31, 2023 and June 30, 2024, S$698,106 and S$153,914 ($113,472)(unaudited) were deposited with financial institutions located in Singapore, respectively. The Deposit Protection Scheme introduced by the Singapore Government insured each depositor at one bank for a maximum amount of S$75,000. The Company believes that no significant credit risk exists as these financial institutions have high credit quality and the Company has not incurred any losses related to such deposits.
For the credit risk related to accounts receivable, the Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company determines its allowance for credit losses for account receivable using an aging schedule. The Company estimates the credit loss rates based on historical loss information, aging of receivables and management’s judgements, including current, reasonable and supportable. forecasted economic conditions compared to the economic conditions using the historical information. The management believes that its contract acceptance, billing and collection policies are adequate in minimizing material credit risk. Application of progress payment of contract works is made on a regular basis. The Company seeks to maintain strict control over its outstanding receivables.
F-15
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
Credit risk on amounts due from a related party is not significant as the timing of payment is controlled by common director and shareholders taking into account cash flow requirements of the Company and there has been no significant increase in the risk of default nor impairment recognized on the amounts due from a related party since initial recognition.
For the six months ended June 30, 2023, four customers accounted for approximately 23%, 18%, 17% and 16% of the Company’s total revenue. For the six months ended June 30, 2024, four customers accounted for approximately 28%, 24%, 18% and 13% of the Company’s total revenue.
As of December 31, 2023, three customers accounted for approximately 12%, 23% and 65% of the total accounts receivable. As of June 30, 2023, one customer accounted for 100% of the total accounts receivable. As of June 30, 2024, three customers accounted for approximately 45%, 44% and 11% of the total accounts receivable.
For the six months ended June 30, 2023 and 2024, the Company did not have significant suppliers or subcontractors accounting for more than 10% of total purchases.
The table below sets out the suppliers or subcontractors who accounted for 10% or more of the Company’s total accounts payable as of December 31, 2023 and June 30, 2024.
Percentage of accounts payable (%) | ||||||||||
Name of Supplier/Subcontractor | Products/services supplied | As of December 31, 2023 | As of June 30, 2024 (Unaudited) | |||||||
Subcontractor A | Subcontract service | 18 | 27 | |||||||
Subcontractor D | Subcontract service | 11 | 3 |
Interest rate risk
Fluctuations in market interest rates may negatively affect the Company’s financial condition and results of operations. The Company is exposed to floating interest rate on cash deposit and floating rate borrowings, and risks due to changes in interest rates is not material. The Company has not used any derivative financial instruments to manage interest rate exposure.
Recently issued accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements and is intended to improve disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses. The amendments are effective for fiscal year beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the transparency and decision usefulness of the annual income tax disclosures. The two primary enhancements include disaggregating existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in ASU 2023-09 should be applied on a prospective basis; however, retrospective application in all prior periods presented in the annual financial statements is permitted. The adoption of ASU 2023-09 is not expected to have a material effect on the Company’s consolidated financial statements.
Except as mentioned above, 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 sheets, statements of income and comprehensive income and statements of cash flows.
F-16
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)
Except as mentioned above, 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 sheets, statements of income and comprehensive income and statements of cash flows.
Note 4 — ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consisted of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Accounts receivable | 345,488 | 42,593 | 31,402 | |||||||||
Less: Allowance for credit losses | (30,916 | ) | (19,735 | ) | (14,550 | ) | ||||||
Accounts receivable, net | 314,572 | 22,858 | 16,852 |
Movements of allowance for credit losses are as follows:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Allowance for expected credit losses, beginning | — | 30,916 | 22,793 | |||||||||
Deductions | 30,916 | (11,181 | ) | (8,243 | ) | |||||||
Allowance for expected credit losses, ending | 30,916 | 19,735 | 14,550 |
F-17
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 5 — CONTRACT ASSETS/(LIABILITIES)
Contract assets consisted of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Revenue recognized to date | 12,903,448 | 17,864,766 | 13,170,721 | |||||||||
Less: Progress billings to date | 8,090,135 | 12,505,134 | 9,219,356 | |||||||||
Less: Credit losses | — | (62,584 | ) | (46,139 | ) | |||||||
Contract assets, net | 4,813,313 | 5,297,048 | 3,905,226 | |||||||||
Contract liability | — | (50,000 | ) | (36,862 | ) |
All contract assets recognized are current with billings expected within the next twelve months.
Movement of the allowance for contract assets were as follows:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Beginning balance | — | — | — | |||||||||
Addition | — | 62,584 | 46,139 | |||||||||
Write-off | — | (62,584 | ) | (46,139 | ) | |||||||
Ending balance | — | — | — |
Contract liabilities consisted of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Billings in advance of performance obligation under contracts | — | 50,000 | 36,862 |
Contract liabilities related to contracts are balances due to customers under contracts. These arise if a particular milestone payment exceeds the revenue recognized to date under the cost-to-cost method. All contract liabilities recognized are current with revenue expected to be recognized within the next twelve months.
The movement in contract liabilities is as follows:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Balance at beginning of the year/period | 136,464 | — | — | |||||||||
Decrease in contract liabilities as a result of recognizing revenue during the year was included in the contract liabilities at the beginning of the year/period | (136,464 | ) | — | — | ||||||||
Increase in contract liabilities as a result of billings in advance of performance obligation under contracts | — | 50,000 | 36,862 | |||||||||
Balance at end of the year/period | — | 50,000 | 36,862 |
F-18
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6 — OTHER ASSETS
Other assets — current consisted of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Prepayments | 76,249 | 1,762 | 1,299 | |||||||||
Short-term deposits | — | 9,600 | 7,078 | |||||||||
Other assets – current | 76,249 | 11,362 | 8,377 |
Other assets — non-current consisted of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Advance to suppliers | 32,077 | 10,916 | 8,048 | |||||||||
Long-term deposits | 54,038 | 60,602 | 44,678 | |||||||||
Deferred offering costs | 324,955 | 559,727 | 412,656 | |||||||||
Other assets – non-current | 411,070 | 631,245 | 465,382 |
Short-term deposits include deposits for tenders while long-term deposits primarily include deposits for leases.
Note 7 — PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consist of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Computers | 24,668 | 24,668 | 18,187 | |||||||||
Office equipment | 2,202 | 2,202 | 1,623 | |||||||||
Subtotal | 26,870 | 26,870 | 19,810 | |||||||||
Less: Accumulated depreciation | (19,011 | ) | (21,167 | ) | (15,605 | ) | ||||||
Property and equipment, net | 7,861 | 5,703 | 4,205 |
Depreciation expenses of owned assets for the year ended December 31, 2023 and for the six months ended June 30, 2024 amounted to S$4,619 and S$2,158 ($1,591), respectively.
No impairment loss had been recognized during the year ended December 31, 2023 and for the six months ended June 30, 2024.
F-19
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — LEASES
Finance leases as lessee
As of December 31, 2023 and June 30, 2024, the Company has finance leases on its consolidated balance sheets for hire purchase of motor vehicle and lease of office equipment.
The following table shows finance lease liabilities and the associated financial statement line items:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Liabilities | ||||||||||||
Finance lease liabilities – current | 62,778 | 43,854 | 32,331 | |||||||||
Finance lease liabilities – non-current | 73,173 | 103,251 | 76,121 | |||||||||
Total | 135,951 | 147,105 | 108,452 |
As of December 31, 2023 and June 30, 2024, “Right-of-use assets, net” consisted of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Motor vehicles under hire purchase | 230,334 | 230,334 | 169,813 | |||||||||
Leased office equipment | 73,830 | 145,182 | 107,034 | |||||||||
Disposal | — | (73,830 | ) | (54,431 | ) | |||||||
Subtotal | 304,164 | 301,686 | 222,416 | |||||||||
Less: Accumulated amortization | (186,084 | ) | (216,286 | ) | (159,455 | ) | ||||||
Disposal | — | 55,373 | 40,823 | |||||||||
Right-of-use assets (finance lease), net | 118,080 | 140,773 | 103,784 |
Information related to finance lease activities during the periods are as follows:
For the six months ended June 30, | ||||||||||||
2023 (Unaudited) | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Finance lease expenses | ||||||||||||
Amortization | 31,173 | 25,444 | 18,758 | |||||||||
Interest of financing lease liabilities | 4,818 | 4,017 | 2,962 |
F-20
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — LEASES (cont.)
Future finance lease payments as of June 30, 2024 (unaudited) are detailed as follows:
For the year ending June 30, | S$ | $ | ||||||
2025 | 50,172 | 36,989 | ||||||
2026 | 50,172 | 36,989 | ||||||
2027 | 34,454 | 25,401 | ||||||
2028 | 22,494 | 16,584 | ||||||
2029 | 2,449 | 1,805 | ||||||
Total future lease payment | 159,741 | 117,768 | ||||||
Less: Imputed interest | (12,636 | ) | (9,316 | ) | ||||
Present value of finance lease liabilities | 147,105 | 108,452 | ||||||
Less: Current portion | (43,854 | ) | (32,331 | ) | ||||
Long-term potion of finance lease liabilities | 103,251 | 76,121 |
The following table shows the weighted-average lease terms and discount rates for finance leases:
As of | As of June 30, | |||||||
December 31, 2023 | 2024 (Unaudited) | |||||||
Weighted average remaining lease term (Years) | ||||||||
Finance leases | 2.70 | 3.38 | ||||||
Weighted average discount rate (%) | ||||||||
Finance leases | 5.67 | 5.25 |
Operating leases as lessee
As of December 31, 2023 and June 30, 2024, the Company has operating leases on its consolidated balance sheets rentals of leasehold buildings.
The following table shows operating lease liabilities and the associated financial statement line items:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Liabilities | ||||||||||||
Operating lease liabilities – current | 136,566 | 156,807 | 115,605 | |||||||||
Operating lease liabilities – non-current | 42,217 | 55,922 | 41,228 | |||||||||
Total | 178,783 | 212,729 | 156,833 |
As of December 31, 2023and June 30, 2024, “Right-of-use assets, net” consisted of the following:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Leasehold buildings | 518,964 | 634,830 | 468,026 | |||||||||
Less: Accumulated amortization | (341,870 | ) | (418,533 | ) | (308,562 | ) | ||||||
Right-of-use assets (operating lease), net | 177,094 | 216,297 | 159,464 |
F-21
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — LEASES (cont.)
Information related to operating lease activities during the periods are as follows:
For the six months ended June 30, | ||||||||||||
2023 (Unaudited) | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Operating lease expenses | ||||||||||||
Amortization | 60,575 | 76,664 | 56,520 | |||||||||
Interest of operating lease liabilities | 3,341 | 3,252 | 2,398 |
Future operating lease payments as of June 30, 2024 are detailed as follows:
For the year ending June 30, | S$ | $ | ||||||
2025 | 161,388 | 118,982 | ||||||
2026 | 41,803 | 30,819 | ||||||
2027 | 20,000 | 14,745 | ||||||
Total future lease payment | 223,191 | 164,547 | ||||||
Less: Imputed interest | (10,462 | ) | (7,713 | ) | ||||
Present value of operating lease liabilities | 212,729 | 156,834 | ||||||
Less: Current portion | (156,807 | ) | (115,605 | ) | ||||
Long-term potion of operating lease liabilities | 55,922 | 41,228 |
The following table shows the weighted-average lease terms and discount rates for operating leases:
As of | As of June 30, | |||||||
December 31, 2023 | 2024 (Unaudited) | |||||||
Weighted average remaining lease term (Years) | ||||||||
Operating leases | 1.35 | 1.39 | ||||||
Weighted average discount rate (%) | ||||||||
Operating leases | 3.75 | 3.75 |
F-22
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9 — LOANS AND BORROWINGS
Long-term and short-term loans and borrowings are as follows:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Total loans and borrowings | 1,266,265 | 1,032,509 | 761,213 | |||||||||
Less: loans and borrowings – current | 429,603 | 343,410 | 253,178 | |||||||||
Loans and borrowings – non-current | 836,662 | 689,099 | 508,035 |
Bank borrowings comprised of the following:
As of | As of June 30, | |||||||||||||||||||||
Loans and borrowings | Principal amount | Maturity Date | Interest Rate | Repayment Method | December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | |||||||||||||||
S$ | S$ | S$ | $ | |||||||||||||||||||
DBS SME Working Capital Loan | 50,000 | August 5, 2024 | Fixed at 7.00% | Monthly Repayment | 7,663 | 1,963 | 1,447 | |||||||||||||||
Standard Chartered Bank Enterprise Financing Temporary Bridging Loan I | 452,000 | March 31, 2024 | 6.25% below prevailing Business Instalment Loan Board Rate, subject to a cap of 5% | Monthly Repayment | 39,149 | - | - | |||||||||||||||
Standard Chartered Bank Enterprise Financing Temporary Bridging Loan II | 275,000 | July 31, 2025 | 4.12% below prevailing Business Instalment Loan Board Rate, subject to a cap of 5% | Monthly Repayment | 150,339 | 103,701 | 76,453 | |||||||||||||||
ETHOZ Capital Ltd Temporary Bridging Loan | 300,000 | November 29, 2024 | Fixed at 5.00% | Monthly Repayment | 105,010 | 53,146 | 39,182 | |||||||||||||||
ANEXT Bank Loan | 300,000 | January 26, 2028 | Fixed at 8.80% | Monthly Repayment | 254,370 | 227,889 | 168,010 | |||||||||||||||
Standard Chartered Bank Business Installment Loan | 300,000 | August 31, 2028 | 0.72% below prevailing Business Instalment Loan Board Rate | Monthly Repayment | 282,664 | 257,215 | 189,631 | |||||||||||||||
OCBC Business Term Loan | 300,000 | August 31, 2028 | 4.25% below prevailing Business Term Rate | Monthly Repayment | 285,360 | 259,755 | 191,503 | |||||||||||||||
DBS SME Working Capital Loan II | 150,000 | August 9, 2028 | Fixed at 7.75% | Monthly Repayment | 141,710 | 128,840 | 94,987 | |||||||||||||||
Total loans and borrowings | 1,266,265 | 1,032,509 | 761,213 |
For the year ended December 31, 2023 and the six months ended June 30, 2024, the effective interest rate of the Company’s loans and borrowings ranges from 2.75% to 8.80%, and 4.88% to 8.80%,respectively.
Interest expenses arising from the Company’s loans and borrowings for the year ended December 31, 2023 and the six months ended June 30, 2024 amounted to S$65,085 and S$ 43,257 ($ 31,891 ), respectively.
All loans and borrowings are secured over the joint and several personal guarantees from Ms. Siew Yian Lee and Mr. Heng Kong Chuan, the director and shareholders of the Company.
F-23
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9 — LOANS AND BORROWINGS (cont.)
The maturity dates for the Company’s outstanding loans and borrowings as of June 30, 2024 are as follows:
For the year ending June 30, | S$ | $ | ||||||
2025 | 411,477 | 303,359 | ||||||
2026 | 264,951 | 195,334 | ||||||
2027 | 256,713 | 189,261 | ||||||
2028 | 225,720 | 166,411 | ||||||
2029 | 32,266 | 23,788 | ||||||
Total loans and borrowings | 1,191,127 | 878,153 | ||||||
Less: Imputed interest | (158,618 | ) | (116,940 | ) | ||||
Present value of loans and borrowings | 1,032,509 | 761,213 |
Note 10 — OTHER PAYABLES AND ACCRUALS
The components of other payables and accruals are as follows:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Accrued expenses | 131,435 | 44,953 | 33,141 | |||||||||
Other payables | 553,161 | 697,502 | 514,231 | |||||||||
GST payable, net | 91,828 | 96,773 | 71,345 | |||||||||
Other payables and accruals | 776,424 | 839,228 | 618,717 |
Accrued expenses mainly consisted of staff expenses and professional service fees and costs incurred for operating activities which are yet to bill. Other payables included the provision for legal claims amounting to S$385,000 and S$385,000 ($283,840) as of December 31, 2023 and June 30, 2024 respectively. For more information see “Note 15 — Commitments and Contingencies”.
F-24
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 11 — OTHER INCOME
For the six months ended June 30, | ||||||||||||
2023 (Unaudited) | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Interest income | 3 | 5 | 4 | |||||||||
Government grants | 3,567 | 2,784 | 2,052 | |||||||||
Total other income | 3,570 | 2,789 | 2,056 |
Note 12 — INCOME TAXES
Income tax
Cayman Islands
The Company 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 payments of dividends by the Company entities to their shareholders, no Cayman Islands withholding tax will be imposed. Accordingly, the Company does not accrue for taxes.
British Virgin Islands (“BVI”)
Under the current laws of the BVI, the Company’s subsidiary incorporated in BVI is not subject to tax on income or capital gains. Additionally, upon payments of dividends by the BVI company to its respective shareholders, no BVI withholding tax will be imposed.
Singapore
The Company’s main operating subsidiary is incorporated in Singapore and is subject to income taxes on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant tax laws and regulations of Singapore. The applicable tax rate is 17% in Singapore, with 75% of the first S$10,000 taxable income and 50% of the next S$190,000 taxable income exempted from income tax.
F-25
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12 — INCOME TAXES (cont.)
The following table reconciles Singapore statutory rates to the Company’s effective tax rate:
For the six months ended June 30, | ||||||||||||
2023 (Unaudited) | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Income tax expenses | ||||||||||||
Current income tax expenses | 35,831 | — | — | |||||||||
Deferred income tax expenses | (703 | ) | 76,053 | 56,070 | ||||||||
Income tax expenses | 35,128 | 76,053 | 56,070 | |||||||||
Income before tax | 300,887 | 323,477 | 238,482 | |||||||||
Singapore statutory income tax rate | 17 | % | 17 | % | 17 | % | ||||||
Income tax expenses computed at statutory rate | 51,151 | 54,991 | 40,542 | |||||||||
Reconciling items: | ||||||||||||
Non-deductible expenses | 1,402 | 3,948 | 2,911 | |||||||||
Tax exemption and rebates | (17,425 | ) | — | — | ||||||||
Others | — | 17,114 | 12,617 | |||||||||
Income tax expenses | 35,128 | 76,053 | 56,070 |
The Company measures deferred tax assets and liabilities based on the difference between the financial statement and tax bases of assets and liabilities at the applicable tax rates. Components of the Company’s deferred tax asset and liability are as follows:
As of | As of June 30, | |||||||||||
December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||
Deferred tax assets | ||||||||||||
Lease liability | 35,415 | 46,203 | 34,063 | |||||||||
Net operating loss carry-forwards | 226,384 | 243,758 | 179,709 | |||||||||
Deferred tax liabilities | ||||||||||||
Right-of-use assets | (33,244 | ) | (46,879 | ) | (34,561 | ) | ||||||
Property and equipment (Temporary depreciation difference) | (6,586 | ) | (5,520 | ) | (4,070 | ) | ||||||
Unbilled revenue | (800,352 | ) | (891,998 | ) | (657,622 | ) | ||||||
Deferred tax assets/(liabilities), net | (578,383 | ) | (654,436 | ) | (482,481 | ) |
As the deferred tax assets and deferred tax liabilities are generated from the same entity, Springview (S), hence the deferred tax assets and deferred tax liabilities are eligible to net off with each other.
F-26
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 13 — EQUITY
Ordinary shares
The Company was incorporated in the Cayman Islands on September 27, 2023, with an authorized share capital of $50,000 divided into 50,000,000 ordinary shares of par value of $0.001 per share. On November 16, 2023, the authorized share capital was subsequently amended to become $50,000 divided into 400,000,000 Class A Shares and 100,000,000 Class B Shares.
On December 1, 2023, the Company issued 10,000,000 Class A Shares and 10,000,000 Class B Shares to the controlling shareholders at par value of $0.0001 per share.
Each holder of Class A Shares is entitled to exercise one vote for each Class A Share held on any and all matters to be voted thereon in a general meeting of shareholders, and each holder of Class B Shares is entitled to exercise 20 votes for each Class B Share held on any and all matters to be voted thereon in a general meeting of shareholders. The Class B Shares are not convertible into Class A Shares and the Class A Shares are not convertible into Class B Shares. Holders of the Class A Shares may receive dividends paid by the Company and have the right to the surplus assets of the Company on its liquidation pursuant to the Amended and Restated Memorandum and Articles of Association. However. the holders of the Class B Shares have no right to any share of the dividends paid by the Company and no right to any share in the distribution of any surplus assets of the Company on its liquidation.
Note 14 — Related party balances and transactions
The Company’s relationships with related parties who had transactions with the Company are summarized as follows:
Related Party Name | Relationship to the Company | |
Springview Contracts Pte. Ltd. | Controlled by executive director and shareholder, Ms. Lee Siew Yian and shareholder, Mr. Heng Kong Chuan | |
GGL Enterprises Pte. Ltd. | Controlled by CEO and shareholder, Mr. Wang Zhuo, and shareholder, Mr. Heng Kong Chuan | |
Mr. Heng Kong Chuan | Shareholder and spouse of executive director, Ms. Lee Siew Yian | |
China International Corporate Management | Controlled by CEO and shareholder, Mr. Wang Zhuo |
a. | Accounts receivable due from a related party |
As of | As of June 30, | |||||||||||
Related Party Name | December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | |||||||||
S$ | S$ | $ | ||||||||||
Springview Contracts Pte. Ltd. | 145,842 | 105,053 | 77,450 | |||||||||
Total | 145,842 | 105,053 | 77,450 |
b. | Amount due from/(to) related parties |
As of | As of June 30, | |||||||||||
Related Party Name | December 31, 2023 | 2024 (Unaudited) | 2024 (Unaudited) | |||||||||
S$ | S$ | $ | ||||||||||
Springview Contracts Pte. Ltd. | — | — | — | |||||||||
Mr. Heng Kong Chuan | (19,902 | ) | — | — | ||||||||
China International Corporate Management | (584,327 | ) | (904,040 | ) | (666,500 | ) |
As of the date of this report, the accounts receivable due from Springview Contracts Pte. Ltd. has been fully collected.
During the year ended December 31, 2023 and the six months ended June 30, 2024, the Company received repayment of S$1,000,000 and S$40,789 ($30,072) from Springview Contracts Pte. Ltd., respectively.
During the year ended December 31, 2023 and the six months ended June 30, 2024, the Company repaid Mr. Heng Kong Chuan S$212,051 and S$19,902 ($14,673), respectively.
During the year ended December 31, 2023 and the six months ended June 30, 2024, the Company received proceeds of 584,328 and S$319,713 ($235,708) from China International Corporate Management, respectively.
F-27
SPRINGVIEW HOLDINGS LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 14 — Related party balances and transactions (cont.)
c. | Related party transactions |
For the six months ended June 30, | ||||||||||||||
Nature | Name | 2023 (Unaudited) | 2024 (Unaudited) | 2024 (Unaudited) | ||||||||||
S$ | S$ | $ | ||||||||||||
Construction service provided to Springview Contracts Pte. Ltd. | Springview Contracts Pte. Ltd.(1) | 171,467 | — | — | ||||||||||
Interior design service subcontracting cost provided by GGL Enterprises Pte. Ltd. | GGL Enterprises Pte. Ltd. | 12,778 | — | — |
(1) | Springview Contracts Pte. Ltd. engaged the Company to provide construction services for projects under Springview Contracts Pte. Ltd. The total charges are computed and issued as sales invoices to Springview Contracts Pte. Ltd. by the Company at the end of each fiscal year, which resulted in accounts receivable and amounts due from Springview Contracts Pte. Ltd. Such receivables are due within 120 days. As of June 30, 2024, no receivables are considered past due. |
Note 15 — COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Company records contingent liabilities resulting from such claim, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable per guidance of ASC Topic 450-20-Loss Contingencies.
As of December 31, 2023 and June 30, 2023, the Company is subject to legal proceeding from a charge by Ministry of Manpower for an offence under Section 12(1) of the Workplace Safety and Health Act for failure to take measure to ensure the safety of its employees at work in one of its construction projects in 2019 which resulted in injuries to one worker and one fatality. The Company has claimed trial to this charge. For the same incident, the Company was also charged under Section 5 of the Building Control Act for carrying out building works that were not approved by the Commissioner of Building Control. Additionally, the Company is also subject to a claim from an employee of a subcontractor for a construction project for damages arising out of injuries and loss suffered as a result of work accident at the project site. The claimant seeks to hold the Company and the subcontractor jointly and severally liable for the claim.
As of December 31, 2023 and June 30, 2024, the Company’s accrued provision for the legal proceedings was S$385,000 and S$385,000 ($283,840) respectively. For the year ended December 31, 2023 and the six months ended June 30, 2024, the Company’s provision for estimated litigation loss was nil.
Note 16 — SUBSEQUENT EVENTS
The Company evaluated all events and transactions that occurred up through October 29, 2024, which is the date that these consolidated financial statements are available to be issued, there were no other material subsequent events that require disclosure in these consolidated financial statements.
F-28