IPOs | News

Kuala Lumpur, Malaysia – On October 31, 2023, a remarkable event brought together industry leaders and visionaries. OTC Markets, an U.S. marketplace for international companies seeking to access U.S. investors, hosted an event, aptly named “OTC Markets: Marketplace for International Companies to Access U.S. Investors.” As the first approved OTC Markets premium provider in Asia, Hexcellence Consulting jointly co-hosting and served as the prime sponsor for this occasion, alongside OTC Markets.

▲ Pathways for Companies Aiming to Enter the U.S. Capital Market

The event focused on three essential pathways for companies aiming to enter the U.S. capital market: Cross-trading, Initial Public Offering (IPO), and Reverse Takeover (RTO). Each of these pathways presents distinct opportunities and challenges for international companies looking to access the vast pool of U.S. investors.

Among the notable guests in attendance was OTC Markets’ Head of APAC Business Development, International Corporate Services, Catherine (Chao) Shang. Her presence underscored the significance of the event and the growing importance of the APAC region in the global investment landscape.

Hexcellence Consulting’s Managing Director, Seah Chia Yee, graced the event with his presence, reaffirming the firm’s commitment to providing advisory services for companies seeking to navigate the U.S. capital markets. He was accompanied by the firm’s Partner, Yee Chee Yong, and Dennis Loh Yee Nam, as well as thier core management team.

The event also welcomed representatives from various organizations, including Agape ATP Corp, Call W Berhad, Capitale Ventures Pte Ltd, Emergence Innovative Sdn Bhd, Esente Advisory, Fin8 Corporate Advisory Sdn Bhd, Gemilang Media Utama Sdn Bhd, Hampstead Pergola Capital Limited, Hueck Capital Sdn Bhd, Proneer Global Sdn Bhd, Vcorp Capital Sdn Bhd, WYNCORP Advisory Sdn Bhd, Zul Rafique & Partners, Marcum Asia CPAs LLP, FirstTrust China Ltd., Semenyih Eco Venture Resort & Recreation Sdn. Bhd., Integrated Gaming Platform, CSH Bakery & Confectionery Sdn Bhd, Sierra Pools, MRCB, and Primus Advisory.

▲ OTC Markets’ Head of APAC Business Development, International Corporate Services, Catherine (Chao) Shang

During the event’s opening speech, Ms. Catherine (Chao) Shang, shared insights on the advantages of Cross-Border Trading. She highlighted the cost-effectiveness of making shares publicly tradable in the U.S., with expenses as low as 1% of what an IPO would entail. This approach carries no additional legal risks, compliance burdens, or accounting complexities. Moreover, it enhances company valuation and trading liquidity while expanding the U.S. investor base.

Supporting these insights, data from the Oxford Metric Study provided convincing evidence for companies to explore Cross-Trading on OTC Markets. The study revealed a marked surge in share valuation within the OTC QX market and a substantial uptick in trading volume, both in the U.S. and the companies’ respective home markets. Furthermore, this strategy has proven to broaden the shareholder base and strengthen corporate presence in the U.S.

▲ Managing Partner of Hexcellence Consulting, Seah Chia Yee

Following Ms. Catherine (Chao) Shang’s enlightening speech, Hexcellence Consulting’s Managing Partner, Seah Chia Yee, took the stage to elaborate the processes and challenges associated with two other listing pathways: Initial Public Offering (IPO) and Reverse Takeover (RTO). He also pointed out the main differences between these approaches. Mr. Seah Chia Yee highly recommended Small and Medium Enterprises (SMEs) to consider uplisting to OTCQB and OTCQX. This strategic move can enhance liquidity and boost their visibility to a global investor audience, providing SMEs with a valuable opportunity for growth and success.

As a Southeast Asia consulting firm, our primary objective is to establish valuable connections between local businesses and the global financial market. Nestled in the heart of Southeast Asia, we’ve have witnessed the emergence of numerous promising companies venturing into the international financial arena. With our team of professionals, which includes legal experts, financial advisors, and communication specialists, we are fully confident in our ability to offer comprehensive assistance to these companies. Our mission is to guide them through the processes of listing and fundraising, supporting their growth and success in the global market.

▲ CEO, Director of Marketing & Founding Partner of Esente Advisory, Dr. Darren Wong

▲ Senior Partner of Marcum Asia CPAs LLP, Jason Tang

In the subsequent discussion, Dr. Darren Wong, the CEO, Director of Marketing, and Founding Partner of Esente Advisory, has emphasized the crucial role of investor relations (IR) for publicly listed companies. He made a simple yet essential point: companies that actively engage with their investors tend to see higher stock prices compared to those that don’t prioritize IR. Dr. Wong’s insights highlight how investor relations significantly impacts a company’s overall performance and success.

Next up, Jason Tang, a senior partner at Marcum Asia CPAs LLP, shared important insights about the difficulties companies face when trying to list on U.S. Capital Markets, especially in relation to accounting standards. Mr. Tang explained the complex challenges and problems that businesses encounter when they need to meet the strict U.S. accounting standards. This information sheds light on the crucial financial aspects that companies need to deal with when thinking about listing on these markets.

Overall, this event marks a significant advance in enhancing understanding and access to U.S. capital markets for international companies. It served as an active hub for knowledge exchange, fostering valuable connections and offering invaluable insights to all attendees.

PANEL SESSION

NETWORKING SESSION

On August 23, 2023, VNG Limited (“VNG” or the “Company”) submitted its initial public offering (“IPO”) application to the U.S. Securities and Exchange Commission (“SEC”), positioning the company for a listing on the Nasdaq. According to documents filed by VNG with the SEC, the company plans to offer approximately 21.7 million shares in the IPO. However, the fundraising size and the offering price have yet to be determined.

VNG’s diverse business operations encompass gaming, music sharing, information services, streaming, news portals, and mobile payment solutions. Notably, the company owns Zalo, a social communication platform that outpaced Meta’s FB Messenger in 2020, making it Vietnam’s top chat app with an impressive 75 million monthly active users.

As a Vietnamese unicorn company, VNG has received significant investments, primarily from Tencent Holdings Ltd (HKG: 0700), the Chinese tech giant. Other notable shareholders include B Capital Group, led by Facebook co-founder Eduardo Saverin, Mirae Asset Financial Group under Hyeon Joo Park, and Singaporean state-linked investment firms GIC Limited and Temasek Holdings Limited.

VNG’s IPO closely follows the recent listing of VinFast (NASDAQ: VFS) in the U.S., once again signifying Vietnam’s growing presence in the global tech industry. These developments highlight Vietnam’s increasing influence on the global tech innovation stage, offering both opportunities and challenges for companies in the region.

On August 23, 2023, Arm Holdings (“Arm” or the “Company”), the UK-based chip design company, formally submitted its Initial Public Offering (“IPO”) prospectus to the NASDAQ stock exchange. Arm’s significance in the world of semiconductor intellectual property (IP) is undeniable; its technology powers a remarkable 95% of smartphones globally, including both iPhones and most Android devices. In addition, Arm’s influence stretches far beyond the devices we hold in our hands.

Rivian Automotive Nasdaq
Rivian Automotive Company

▲ Rivian Automotive (NASDAQ: RIVN)

Although the IPO prospectus doesn’t reveal the exact terms of the stock sale, leaving its valuation undetermined, experts speculate that Arm could be valued as high as US$60 to $70 billion. If the IPO proceeds as planned, this valuation will make it the largest IPO since Rivian Automotive (NASDAQ: RIVN) raised a staggering US$13.7 billion in October 2021.

Arm Holdings Rene Haas

▲ Arm Holdings’ CEO, Rene Haas

At present, Arm is actively engaging with potential investors, with plans to go public in September 2023. The Company holds strong confidence in its potential to further enhance its enterprise value. Rene Haas, Arm’s CEO, emphasized in an interview that the Company’s focus is on expanding into various markets, particularly addressing the recent slowdown in the smartphone sector, and venturing into advanced computing areas, including chips for data centres and artificial intelligence applications.

On June 27, 2023, Hexcellence Consulting and HongYe Financial Group for (宏业金融集团) (“HongYe”), join force as the lead consultant of cross-border listing, and had attended “FOR U” Strategic Press Conference of QiLin XianPin’s (奇麟鲜品) (“QiLin”).

▲ “FOR U” Strategic Conference Site

The event was graced by the presence of QiLin’s Chairman, Liu Hui (刘辉), along with Vice Presidents Dong XingTu (董星图), Xiong Dan (熊丹), and Wang AiGuo (汪爱国), accompanied by the company’s core management team. HongYe’s President, Hong ZhiDa (洪志达), was also in attendance, alongside their core management team including Seah Chia Yee (谢家棋), Yee Chee Yong (余子杨), Zhou KunLun (周昆仑), Jiao HaoTing (焦浩庭), and Wang RuiWen (王锐雯). Representatives from QiLin XianPin’s market board, such as Xu YiMin (徐义民), and market core partners including Hu ChengWen (胡程雯), Deng XiaoYing (邓小英), and Qu WenLiang (曲文良), as well as numerous outstanding service providers of QiLin, were present. Several prominent domestic media platforms, including HangZhou RiBao (杭州日报), QianJiang WanBao (钱江晚报), ZheJiang RiBao (浙江日报), ZhongGuo Lan (中国蓝), and ZheJiang ZhiSheng (浙江之声), also attended the event for coverage.

▲ QiLin XianPin’s Vice President, Dong XingTu

During the opening speech at the press conference, QiLin’s Vice President, Dong XingTu, shared insights on the significant challenges faced by the industry and discussed topics such as finding a path to survival and navigating the post-pandemic era.

He emphasized QiLin’s distinct approach of transcending industry trends, creating a new ecosystem, and refraining from engaging in price wars. QiLin remains dedicated to empowering team leaders, prioritizing service, experience, and health. Their plans include incubating leading brand supply chain companies in segmented tracks during the midterm stage, as well as developing quality solutions. In the long term, they aim to define a quality life for users through algorithmic utilization.

▲ Hexcellence Consulting “FOR U” Strategic Press Conference Team Photo

▲ Champagne Ceremony at “FOR U” Strategic Press Conference

QiLin had previously secured a Series A funding of RMB 30 million from the HeBi JinHe (鹤壁金鹤) Listing Advisory Investment Fund in 2020. Today, it has grown into a community group buying company with hundreds of self-pickup points and an annual transaction volume exceeding RMB 500-600 million.

As the lead consultant of QiLin, Hexcellence Consulting will leverage its professional expertise in the US public listing to provide comprehensive professional services, including support in finance, accounting, legal affairs, taxation, and capital-related areas to assist the project throughout the entire process of listing, from due diligence to stock listing and trading.

▲ QiLin & HongYe Achieving Strategic Cooperation

▲ HongYe’s Chairman, Hong ZhiDa

During the press conference, HongYe’s Chairman, Hong ZhiDa, delivered an important speech. He highlighted HongYe’s role as a public listing consultant and their track record of providing incubation services for numerous domestic and international companies to enter the capital market. Moving forward, HongYe will join forces with us to assist QiLin, taking a global capital perspective to facilitate a smooth listing process.

In late May of this year, QiLin’s executive team visited HongYe’s headquarters and officially signed the agreement for US listing guidance. The convening of this press conference signifies the acceleration of HongYe’s listing guidance work for QiLin.

▲ Managing Partner of Hexcellence Consulting, Seah Chia Yee

Seah Chia Yee, Managing Partner of Hexcellence Consulting, expressed during the press conference, “We are well equipped with capital market professional knowledge and expertise, and we will leverage our experiences and resources to help QiLin and their partners create greater value.”

As a Southeast Asia based consulting firm, our aim is to facilitate valuable connections between domestic enterprises and the international financial market by leveraging our expertise and experience. Situated in the Southeast Asian region, we have witnessed the emergence of numerous emerging growth companies in recent years, actively venturing into the international financial market. With our network of professionals, including legal experts, accountants, and investor relations specialists, we firmly believe that we can provide comprehensive support to these companies throughout the process of listing and fundraising, thus assisting them in their growth.

Transaction Overview

Addentax Group Corp. stated that it has entered an agreement with certain accredited investors for a private issuance of senior secured convertible notes for $15,000,000 on January 4, 2023. The company will issue two senior secured convertible notes with an original principal amount of $8,333,333.33 for total gross proceeds of $16,666,666.66.

The company issued convertible notes at a 10% initial discount. The notes bear a 5% annual interest rate, and the Company will be required to pay instalment amounts or, at its option, redeem such amounts under the Notes each month beginning on the last trading day of the calendar month in which the control account trigger date occurs, and thereafter, on the last trading day of each calendar month until the maturity date of July 4, 2024, at which time all outstanding amounts remaining, if any, will be due and payable in full. Beginning after the original date of issuance, the Convertible Notes are convertible into shares of Common Stock at an initial conversion price of $1.25 per share. The company also granted warrants to purchase up to 16,077,172 shares of common stock at $1.25 per share.

The Notes, Warrants, and shares issuable upon conversion of the Notes and exercise of the Warrants are offered and sold in accordance with exemptions from the Securities Act provided by Section 4(a)(2) and Rule 506 of Regulation D established thereunder.