Key Highlights

● Padachi M, a Subsidiary of Kandal M Venture, terminated a planned direct purchase of a 15% Equity stake in Dumaine International and instead purchased $2.5 million of Dumaine's senior unsecured convertible bonds due 2031.

● The bonds carry a 6% annual Interest Rate paid semi-annually and are convertible into shares representing 15% of Dumaine's fully diluted equity, keeping Padachi M's ultimate ownership target unchanged.

● The transaction is a related-party deal, since Dumaine's chairman Miao Duncan also holds a director position and 45% ownership of DMD Venture Limited, the controlling Shareholder of Kandal M itself.

● Dumaine International is an Investment Holding Company with subsidiaries in luxury handbag manufacturing, incorporated in the British Virgin Islands and headquartered in Hong Kong.

Kandal M Venture Limited (NASDAQ:FMFC) disclosed in a Form 6-K filed September 25, 2026 that its subsidiary, Padachi M, scrapped a planned purchase of a 15% equity stake in Dumaine International and replaced it with a $2.5 million purchase of Dumaine's convertible bonds, a deal that keeps Padachi M's eventual 15% ownership target intact but changes the instrument used to get there.

The restructured transaction, effective September 25, 2026, ties Kandal M more closely to Dumaine's chairman, Miao Duncan, who also serves as a director and part-owner of Kandal M's own controlling shareholder.

From Equity Purchase to Convertible Bond

Padachi M originally agreed to buy a direct 15% equity stake in Dumaine, but that sales and purchase agreement was terminated by mutual consent on September 25, 2026, with Mr. Miao Duncan and Mr. Miao Tai Wai, David, Dumaine's controlling shareholders. In its place, Padachi M purchased $2.5 million of Dumaine's senior unsecured convertible bonds due 2031.

The bonds carry a 6% annual interest rate, paid semi-annually in cash, and are convertible into shares representing 15% of Dumaine's fully diluted equity, meaning Padachi M's ultimate ownership target of 15% is unchanged even though the mechanism shifted from an outright stock purchase to a convertible Debt instrument. Funds previously paid under the terminated stock agreement were redirected into the new bond purchase.

Related-Party Ties

The transaction runs through a tight web of related parties. Kandal M's chairman, Miao Duncan, holds a director position and owns 45% of DMD Venture Limited, the controlling shareholder of Kandal M itself, while Mr. Miao Tai Wai, David owns the remaining 55% of DMD Venture. Those same two individuals are also the sellers on the Dumaine side of the transaction.

Following the bond purchase, Padachi M holds a 15% economic interest in Dumaine on an as-converted basis, with the Miao family controlling the remaining 85%. The filing frames the deal as a related-party transaction given the overlapping ownership and directorships involved.

Dumaine's Business

Dumaine International is described in the filing as an investment holding company, with subsidiaries focused on luxury handbag manufacturing. It is incorporated in the British Virgin Islands and headquartered in Hong Kong. The filing does not disclose Dumaine's revenue, profitability, or the total number of handbag Manufacturing facilities or brands under its umbrella, limiting how much investors can independently assess the bonds' underlying Credit quality. Because the bonds are senior and unsecured, their repayment ultimately depends on Dumaine's overall financial health rather than any specific pledged collateral, a point the filing does not elaborate on further.

Company Background

Kandal M Venture Limited is a foreign private issuer incorporated in Cambodia, and Padachi M operates as its Wholly Owned Subsidiary carrying out the investment. The 6-K does not disclose Kandal M's core operating Business beyond identifying it as the parent of Padachi M, and it does not specify a Maturity conversion mechanism timeline beyond the five-year bond term running to 2031. It also does not state what specific covenants, if any, protect Padachi M as a bondholder in the event Dumaine's handbag manufacturing business underperforms.

Tracking the Conversion Decision

Because the bonds are convertible into a fixed 15% stake in Dumaine, investors should watch for whether and when Padachi M elects to convert, since that decision would formally convert Kandal M's exposure from a fixed-income instrument paying 6% annual interest into a direct equity position in a private handbag manufacturer. The semi-annual cash interest payments on the bonds also provide a recurring cadence to track the investment's performance ahead of the 2031 maturity, and any further disclosure detailing Dumaine's financial condition would help clarify the credit risk embedded in the $2.5 million commitment.