No Signboard Holdings says it will operate its streamlined businesses with funds from its investor in order to resuscitate its businesses and to effect a resumption of the trading of its shares.
As at June 19, No Signboard Holdings currently operates two food and beverage (F&B) outlets, Little Sheep Hotpot at Orchard Gateway and No Signboard Sheng Jian at Northpoint City. The group had closed its loss-making No Signboard Seafood Esplanade outlet on April 1, 2022.
The group’s investor is Gazelle Ventures, which had invested $5 million into the company on July 1, 2022. Gazelle Ventures is jointly owned by Gazelle Capital and Valiant Investments and invests in food, agri-tech and sustainable agriculture-related businesses. Gazelle Capital is a Singapore-incorporated family office while Valiant Investments is a boutique family office incorporated in Hong Kong.
Following the resumption of trading, No Signboard Holdings intends to undergo a re-branding exercise which may include the renaming of its existing brands.
The group says it has also been actively searching for acquisition targets and is in the final stages of discussions to acquire two F&B businesses. The acquisitions will be funded by the investment amount put in by Gazelle Ventures.
Further to its statement, the group notes that it is facing “significant operational issues” amid the dispute with GuGong, an entity controlled by its executive chairman and CEO Lim Yong Sim. As Lim is a joint signatory of some of the group's operational bank accounts, the differing opinions between him and the group’s board, along with the “serious financial challenges faced by the group” has made it more difficult for the group to pay the salaries of some of its employees and creditors.
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Although Gazelle Ventures has requested for the return of the balance of its investment amount till conditions under the agreement are fulfilled or waived on May 26, it has now agreed to release $60,000 to pay No Signboard’s employees for the month of May. It is also releasing an additional $90,000 to pay the group’s landlords and other creditors.
As at June 19, the group is demanding the repayment of franchise fees of $103,440 for the No Signboard restaurant at 414 Geylang Road (the Matter Road restaurant). It has issued a letter to the restaurant demanding repayment on June 14.
“With regards to the implementation agreement, the investor and the company are working closely together to try to resolve all outstanding issues and fulfil (or waive) all the outstanding conditions precedent so as to effect completion as soon as possible. This includes revising the trade resumption proposal which will set out the plans to inject fresh related businesses into the group. A resumption of trading would also allow the company to raise further funds from the secondary market, if necessary,” says No Signboard.
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On the dispute with GuGong, No Signboard says the former has applied to Singapore’s High Court to seek an interim injunction against the transactions proposed in the circular dated Nov 8, 2022, for No Signboard’s extraordinary general meeting (EGM). The circular has proposed the consolidation of every six shares in the capital of the company held by shareholders into one share, as well as the proposed allotment and issue of subscription shares to Gazelle Ventures, which represents 75% of the total shares in the company on a fully diluted basis.
The proposed whitewash resolution for the waiver by No Signboard’s independent shareholders of their rights to receive a mandatory general offer from Gazelle Ventures for all the issued shares in No Signboard was also detailed in the circular.
GuGong has also applied to the high court to reinstate the independent contractor agreement between itself and No Signboard to which the latter has agreed to do so.
On June 16, GuGong sent a letter to the board to request for an EGM to remove Lim Teck-Ean, Tan Keng Tiong Alvin, Lo Kim Seng, Francis Ding Yin Kiat, Benjamin Cho Kuo Kwang and to appoint Lim Lay Hoon, Choo Cheng San, Cheo Tian Feng, Cheo Bee Hwa and Lim Yi with effect from the date of the EGM. The EGM was requested to be held as soon as practiceable but not later than two months after receiving the letter.
Lim Teck-Ean is a director of Gazelle Ventures while Tan is the chief operating officer (COO) of the investor.
The new board is said to consist of people related to Lim Yong Sim.
“The board is currently seeking legal advice in relation to the notice of requisition. As the new board consist of persons related to Lim, it is unclear how the new board would comply with Principle 2 of the Code of Corporation Governance 2018, which requires the board to have an appropriate level of independence and diversity of thought and background in its composition,” says No Signboard.
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On June 18, No Signboard had also issued an offer to settle with Lim and GuGong where both parties will agree to reinstate the agreements and resume their respective obligations and liabilities as if they had not been terminated. Alternatively, GuGong will pay No Signboard $300,000 for the purchase of the intellectual property and No Signboard will pay GuGong $365,000 in full for the settlement of the proceedings.
The settlement offer is open for acceptance till 5pm on June 21.
Shares in No Signboard last traded at 3.1 cents before its suspension.
