Issues to be spotted:

1. Connected Transactions and Conflicts of Interest
One core concern arises from relationships among the company’s senior figures. TechVision’s main supplier, SupplyPro Limited, is owned by Sarah (COO and spouse of Dr. Wang), making it a connected person under LR 14A. Similarly, the company shares office space with the Wang family’s private business, which lacks a formal lease and thus may also entail a connected transaction. TechVision acquired its Shenzhen subsidiary from the Wang family based on an internal valuation; this transaction may require independent valuation and shareholder approval depending on applicable LR 14A thresholds.

Proposed Solutions:
First, TechVision should enter into a formal lease agreement for the shared office space with clearly defined rent, term, and termination clauses. To regularize the acquisition of the Shenzhen subsidiary, the company should engage an independent valuer to confirm a fair price; if necessary, the transaction should be disclosed and approved in accordance with connected transaction requirements. Additionally, TechVision must put in place transparent supply agreements with SupplyPro Limited, supported by arm’s-length terms and robust due diligence, to demonstrate that the arrangement reflects commercial rates.

2. Board Composition and Independence
Under LR 3.13, independent non-executive directors (“INEDs”) must have no material interest in or relationship with the company that could affect their impartial judgment. Questions arise where one proposed INED provides IT consultancy to TechVision, while another holds a 2% equity stake. These circumstances potentially undermine their independence. In addition, there is pervasive family involvement at senior levels—Dr. Wang’s wife is COO, his brother is Chief Commercial Officer, and the largest customer is linked to his brother’s prior employment—highlighting the need for robust governance structures.

Proposed Solutions:
TechVision should assess whether the identified INEDs genuinely meet independence criteria. If not, the company should consider replacing them or otherwise ensuring their relationships (for instance, IT consultancy) are discontinued before appointment. Clear and separate reporting lines for Dr. Wang, Sarah, and other family members should be established, and the board should be broadened to include directors without personal or financial links to the Wang family. This ensures balanced oversight and minimizes perceived conflicts of interest.

3. Business Viability and Revenue Concentration
A key requirement under LR 8.04 concerns the company’s sufficiency of operations and sustainable profitability. TechVision depends on five customers for 75% of its revenue, and the largest customer contract is set to expire in three months. The HKEX may question whether TechVision can readily renew or replace this contract and whether its current operations are robust enough to support a Main Board listing.

Proposed Solutions:
Proactive efforts to renew or renegotiate the expiring contract are crucial for reassuring the Exchange that TechVision’s revenue stream remains stable. The company should also pursue diversification strategies—whether through broadening its customer base or entering new markets—to reduce reliance on a small number of major customers. Demonstrating long-term sustainability through revised business projections or additional signed contracts would help establish TechVision’s compliance with LR 8.04.

4. Auditor Changes and Financial Reporting
TechVision changed auditors after disagreements over accounting treatments, heightening concerns about the reliability of its financial disclosures. Under LR 4.03 and LR 8.13, consistent and transparent accounting practices are critical to building investor trust.

Proposed Solutions:
The company should provide a full account of the circumstances that led to the auditor’s change, including the nature of any disputes and how these were resolved. TechVision’s new auditors must verify that past financial records and current practices follow applicable accounting standards. Clear disclosure in both the prospectus and to the HKEX of why the earlier disagreement arose—and why it no longer poses a concern—will be necessary to allay potential investor doubts.

5. Intellectual Property Ownership
TechVision’s core AI technology was initially developed during Dr. Wang’s doctoral studies, yet some historical IP assignment documents appear to be missing. Without unequivocal ownership, TechVision may struggle to demonstrate it has the full legal rights to commercialize its AI platform, thereby undermining compliance with LR 2.13 (disclosure) and LR 8.04’s viability requirement.

Proposed Solutions:
The company should locate or formally recreate the missing IP assignment agreements. If necessary, Dr. Wang’s university or research funding entities may need to sign further releases or waivers. TechVision should engage IP counsel proficient in cross-border intellectual property matters (since Dr. Wang’s PhD might have been done outside Hong Kong) to ensure this is properly documented. Solidifying the IP framework will help confirm TechVision’s lawful, exclusive rights to its core product.

6. Pre-IPO Share Options for Major Customer Employees
Offering pre-IPO share options to employees of major customers potentially engages connected transaction or disclosure issues, depending on the personal or corporate ties involved. Where such individuals constitute “connected persons,” the transaction may require compliance with LR 14A. More generally, best practice recommends transparent disclosure of the rationale for these grants and their terms.

Proposed Solutions:
TechVision should verify whether any of these employees or entities fall within the definition of connected persons. If so, it must comply with the relevant LR 14A procedures or seek a waiver if allowed and appropriate. In all cases, the share option scheme should be clearly outlined in the listing documents, indicating the vesting timetable, strike price, and any lock-up arrangements. Properly addressing this issue helps avoid allegations of favoring key stakeholders at the expense of public shareholders.