Company: MAGH
Filing Date: 2025-09-15
Form Type: 20-F
Source: 0001493152-25-013424
Chunk: 20

Company: Magnitude International Ltd
Filing Date: 2025-09-15
Form: 20-F
Item: Item 3
Chunk 20
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 or services to us, the lack of an adequate workforce in
parts or all of our operations and communications and transportation disruptions. The occurrence of the global COVID-19 pandemic has
caused, and these factors could also cause, consumer confidence and spending to decrease or result in increased volatility in the United
States and global financial markets and economy. Such occurrences have had and could in the future have a material adverse effect on
us and could also have indirect consequences, such as increases in the costs of insurance, if they result in significant loss of property
or other insurable damage.

  11  

We
are obliged to provide performance bonds backed by cash or other collateral and/or guarantees to secure our obligations under the project
contracts which could affect our liquidity as well as our ability to secure further bank financing.

Approximately
one-third of our projects during the fiscal years ended April 30, 2023 and 2024 required us to provide performance bonds issued by banks
or insurance companies backed by cash or other collateral and/or guarantees in favor of our customers to secure our performance under
the project contracts with our customers. As of April 30, 2024, we had paid security deposits of approximately S$0.1 million and had
purchased insurance bonds to secure performance bonds with an aggregate value of approximately S$0.4 million. As of April 30, 2025, we
have purchased insurance bonds to secure performance bond with an aggregate value of S$1.47m. The use of substantial amounts of cash
collateral to secure performance of our projects may adversely affect our liquidity position as well as our ability to secure further
bank financing. If we fail to provide the performance bonds required under the project contracts with our customers, our customers will
have the right to terminate such contracts with us. If such contracts are terminated, our business, results of operations and financial
condition may be materially and adversely affected. If we fail to perform our obligations under the project contracts, the banks or insurance
companies will compensate our customers up to the amount of the performance bond on demand. We will then become liable to compensate
the banks or insurance companies, as applicable, or our collateral could be seized. In such circumstances, our business, results of operations
and financial condition will be adversely affected.

Our
work in the public sector exposes us to additional risks inherent in the government contracting environment.

As
an integrated one-stop electrical installation services provider, we engage in electrical installation works for public housing and various