FOS CAPITAL LTD
On behalf of the Board, I have great pleasure in inviting you to become a Shareholder of FOS Capital Ltd (the Company).
The Company offers investors the opportunity to acquire Shares in an established and innovative Australian lighting company that intends
to grow operations, both organically and through the acquisition of industrial, electrical and technology businesses that offer clear synergies
to FOS Group’s existing business operations.
The Company, through its wholly-owned subsidiaries, operates an Australian based lighting design, engineering and manufacturing business
serving the commercial, retail and industrial lighting sectors.
The Company’s wholly owned subsidiary, FOS Lighting Group Pty Ltd, commenced trading in April 2019, and in June 2019 it acquired
FOS Lighting (formerly Frend Lighting Industries Pty Ltd) from Gerard Lighting Holdings Pty Ltd. The Frend lighting business was established
in 1996 and continues to manufacture a broad range of commercial indoor and outdoor luminaires at its Brisbane manufacturing facility.
In November 2020 the Company acquired a 50% shareholding in Baker & McAuliffe Holdings Pty Ltd, trading as ‘JSB Lighting’ from ASX listed
HGL limited and in February 2021 the Company acquired 100% ownership. JSB Lighting was established over 28 years ago and has offices
in each Australian state as well as New Zealand. JSB Lighting represents an exciting turn-around opportunity due to its recent significant
trading losses. The Company has already made significant positive progress with the turn-around strategy, details of which are contained
in Section 3.
The acquisitions of Frend and JSB Lighting provide the Company with a platform to grow business operations leveraging the Directors’ extensive
experience in the lighting industry and opportunities that comes with expanded supplier and distribution networks. The Company will continue
to explore complementary value adding acquisitions as part of its overall growth strategy.
The Australian lighting market (estimated at $2.67 billion per annum7
) is a dynamic industry that is undergoing major technological change as
it moves to new and innovative technology, mainly through LED. The Company’s experienced management team understands the demands
of the lighting market, thus ensuring the Company is well positioned to capitalise on these industry changes.
The directors believe that COVID-19 has led to a clear shift for customers to prefer to source Australian-made products rather than from
overseas suppliers. FOS is very well positioned to take advantage of this change as it is one of very few Australian lighting companies to have
a fully integrated local manufacturing facility.
The Company is seeking to raise $3 million (before costs of the Offer) through the issue of 12 million Shares at the Offer Price of $0.25 per Share.
Upon the successful Completion of the Offer, the Company will have 45,000,000 Shares on issue and a market capitalisation of $11,250,000 at
the Offer Price.
The purpose of the Offer is to provide FOS with access to capital markets (that the Company expects will give it added financial flexibility
to pursue further growth opportunities), broaden the Shareholder base and provide a liquid market for its Shares. All proceeds from the Offer
will be used to assist FOS Group to continue its business growth, including sales and marketing and to meet the costs of the Offer.
Upon Completion of the Offer, new Shareholders are expected to hold 22% of the Shares and the Existing Shareholders (including management)
will retain up to 78% of the Shares. Existing Shares held by the Existing Shareholders are expected to be subject to mandatory escrow for
This Prospectus contains important information about the Offer, the industry the Company operates in as well as the financial performance
and position, operations, and the management team of the Company. The key risks associated with an investment in the Company are set
out in Section 5. Key risks include implementation risk associated with the JSB turn-around strategy, loss of key personnel, the fact that the
combined FOS Group has a limited trading history under current management, that it operates in a highly competitive industry.
I encourage you to read this document carefully and in its entirety before making an investment decision.
The Directors and senior management are excited about the future of the Company and the FOS Group and we look forward to welcoming
you as a Shareholder.