Current Status:

The proposed acquisition is progressing well. Due diligence has been completed, and we are finalizing key commercial terms in the Share Purchase Agreement (SPA).

Key Developments:

The target company provided Q1 2025 financials, revealing contingent liabilities of approximately RM2.3 million from outstanding distributor claims. We have incorporated appropriate warranty and indemnity provisions to address these exposures. Purchase price negotiations are resolved. The parties agreed to a locked-box mechanism at RM45 million enterprise value, eliminating completion account requirements.

Outstanding Issues:

Two material matters require resolution. First, the target's Cyberjaya lease expires December 2025 without confirmed renewal terms. We are securing lease extension as a condition precedent. Second, we are narrowing the vendor's non-compete clause from "technology solutions" across Malaysia to "enterprise software solutions" within Klang Valley to ensure enforceability under Malaysian restraint of trade laws.

Regulatory Compliance:

No Competition Act 2010 notifications required as market share thresholds are not triggered. MITI approval unnecessary for this wholly Malaysian-owned target.

Next Steps:

Revised SPA draft will be circulated by 2 July 2025, addressing lease and non-compete issues. We target signing by 10 July 2025 and completion by 15 August 2025.