Company: MAGH
Filing Date: 2025-07-18
Form Type: F-1/A
Source: 0001641172-25-020173
Chunk: 31

Company: Magnitude International Ltd
Filing Date: 2025-07-18
Form: F-1/A
Chunk 31
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 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.

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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 hadpaid 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. 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 types of A&A works for public facilities from time to time. Our government work carries various risks inherent in the government contracting process. These risks include, but are not limited to, the following:

| ● | Government                                                                                     
 contracts are subject to heightened reputational and contractual risks compared to contracts   
 with commercial customers. For example, government contracts and the proceedings surrounding   
 them are often subject to more extensive scrutiny and publicity. Negative publicity, including 
 an allegation of improper or illegal activity, regardless of its accuracy, may adversely       
 affect our reputation.                                                                         |

| ● | Terms                                                                                            
 and conditions of government