#nasdaq Archives - Hexcellence Consulting

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: 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’ 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 August 15, 2023, VinFast Auto Ltd. (NASDAQ: VFS), a Vietnamese electric vehicle company owned by Vietnam’s wealthiest individual, Pham Nhat Vuong, successfully merged with Black Spade Acquisition Co., a special purpose acquisition company under the stewardship of Lawrence Ho Yau Lung and was successfully listed on the NASDAQ stock market. On its debut trading day, VinFast’s stock price increased by an astonishing 254.64%, briefly propelling its market capitalization to approximately $86.05 billion, solidifying its leading position in the Vietnamese electric vehicle sector.

▲ VinFast’s CEO, Le Thi Thu Thuy

During the bell-ringing ceremony, VinFast’s CEO, Le Thi Thu Thuy, expressed optimism, stating, “Listing on the U.S. capital market represents a monumental achievement for us. This listing opens doors to our future engagement with the capital market.” Today’s success not only highlights VinFast’s commitment to sustainable global mobility but also presents opportunities for expanding its presence in the capital market and future growth.

As VinFast expands beyond Vietnam, the company is preparing to unveil three innovative vehicle models. Concurrently, VinFast’s factory in North Carolina, USA, has begun operations, marking a significant step in the company’s global expansion and the development of its North American supply chain.

It’s worth noting that prior to VinFast, the only Vietnamese company to enter the U.S. capital market was Cavico Corp (“Cavico”). Cavico achieved Nasdaq listing status with the ticker symbol CAVO on September 18, 2009. Regrettably, Cavico was delisted from Nasdaq less than two years later due to non-compliance with disclosure requirements. Since then, no Vietnamese company has managed to penetrate the U.S. market successfully.

VinFast’s successful entry into the U.S. market not only signifies their remarkable achievement but also serves as an inspiration for other Vietnamese enterprises seeking international expansion. This accomplishment challenges the notion that Vietnamese companies cannot thrive in foreign markets, offering boundless possibilities for those aspiring to follow in VinFast’s footsteps.

“Uplisting” is a global practice where companies, whether foreign or domestic, move their stocks from being quoted on alternative trading platforms like the OTC Markets, TSX, or ASX to major stock exchanges like the NASDAQ or NYSE. This transition is sought after by micro or small cap companies as it provides several advantages such as increased market visibility, improved credibility, and the ability to attract institutional investors.

However, company leaders should be cautious of potential pitfalls that could come with uplisting. While the excitement of surging stock prices may be enticing, it is important to note that being listed on a major exchange also exposes companies to increased scrutiny and higher regulatory requirements. Failure to meet these requirements can lead to delisting, which could have severe consequences for the company’s reputation and financial stability.

The Basics of Uplisting

Uplisting refers to the process where a company’s stock uplist from trading on an alternative stock exchange to a major one, such as moving from OTC Markets or a small international exchange to the Nasdaq or NYSE. This event is sometimes likened to a second initial public offering (“IPO”) because it opens up the company to a larger pool of potential investors and can lead to increased trading volume.

Uplisting to a higher-tier exchange is generally seen as a positive development for businesses as it provides opportunities for growth and expansion. A total of 9 companies which operate in 4 different sectors made up the 2023 Q1 class of uplisted companies.

However, the uplisting process does come with its challenges. Companies may face increased regulatory scrutiny and must meet strict listing rules set by the exchanges, such as the Nasdaq uplisting requirements and the Securities & Exchange Commission (“SEC”) guidelines. These rules often encompass criteria like minimum share price thresholds, financial performance standards, and corporate governance requirements.

The Reasons Why Companies Uplist

Companies have various motivations for uplisting their stocks to larger, official exchanges. Two real-life examples illustrate these reasons.

▲ Fubotv Inc. (NYSE: FUBO)

1. Fubotv Inc.
At the beginning of 2020, FuboTV’s shares were trading at $9.58. However, during the COVID-19 outbreak and the subsequent market crash, the company’s stock price dropped. As the market started to rebound, FuboTV’s stock gradually recovered, reaching $22 per share in May. To further enhance the company’s visibility and capitalize on the momentum of the broader market, FuboTV decided to uplist from the OTC to the NYSE in October 2020. The uplisting contributed to a significant increase in the stock price, aligning with FuboTV’s growth strategy and ambitions to differentiate itself from competitors and improve liquidity.

▲ Hertz Global Holdings Inc. (NASDAQ: HTZ)

2. Hertz Global Holdings Inc.
In the summer of 2021, Hertz officially emerged from bankruptcy, benefiting from increased demand for rental vehicles during the summer holidays and the return to domestic travel. The company’s stock on the OTC market surged nearly 600% in a year as investors hoped for an uplisting. Responding to its rapid success and to perpetuate further growth, Hertz uplisted its stock to the Nasdaq by summer 2021. By doing so, Hertz aimed to access a larger pool of investors, as it had outgrown the limitations of the OTC markets.

Risk Considerations for Uplisting Companies

Not all public companies are able to successfully uplist, and some may be forced to move to a different exchange involuntarily if they fail to meet financial or regulatory requirements. For major exchanges like the NYSE and Nasdaq, there is a minimum stock price that companies must maintain, and a business may face delisting if any of its stocks fall below $1 for 30 consecutive days. An example of this is Long Blockchain Corp., which had its shares delisted by US regulators after failing to file financial reports for an extended period.

The uplisting process can present challenges for businesses, including meeting new requirements such as minimum share prices, financial reporting deadlines, robust reporting practices, and governance standards. Failure to comply with these obligations can lead to delisting or legal disputes. Companies may also face pressure to consistently deliver positive results, meet growth targets, and satisfy the demands of investors. Like other public companies, those undergoing uplisting also face management liability, new exposures, and heightened public scrutiny.

To mitigate these risks, OTC Markets-listed companies considering uplisting should have directors and officers (D&O) insurance. This insurance is crucial as directors and officers can be sued by shareholders, competitors, or investors, putting their personal assets at risk. D&O insurance protects the company’s leadership from personal financial loss and lawsuits alleging wrongful acts or mismanagement of corporate assets.

Uplisting from OTC Markets to major exchanges like Nasdaq can offer numerous benefits, but the process can be complex and challenging. While some companies manage to uplist without external assistance, it can be costly and time-consuming. Thorough research and careful planning are essential before making the move to ensure the company is adequately prepared and aware of the coverage needed to navigate potential risks successfully.

Our Previous Successful Uplisting Case

Addentax Group Corp. (NASDAQ: ATXG)

On July 24, 2023, BioNexus Gene Lab Corp. (“BioNexus” or the “Company”) (Nasdaq: BGLC), a Kuala Lumpur-based emerging firm involved in selling chemical raw materials and pioneering safe, effective, and non-invasive liquid biopsy tests for early diagnosis and personalized health management, successfully uplisted from OTC Markets to the esteemed Nasdaq Capital Market, becoming the first Malaysian company to join Nasdaq through uplisting.

BioNexus completed its IPO, pricing its shares at US$4.00 each, which resulted in total gross proceeds of US$5.75 million. The Company’s units have been trading on the Nasdaq stock exchange since July 20, 2023, under the ticker symbol “BGLC.”

Apart from BioNexus Gene Lab Corp., there are currently four other Malaysian companies that have successfully listed on Nasdaq through conventional IPOs since August 23, 2022. The increasing number of Malaysian companies opting to list on Nasdaq reflects the confidence and attractiveness of the US market for international firms seeking global exposure and access to a wide investor base. This trend highlights the strong potential and competitiveness of Malaysian businesses in various industries, as well as their ability to meet the stringent listing requirements and regulatory standards set by Nasdaq.

About Uplisting

Uplisting refers to the process where a company already listed on stock exchange (such as OTC Markets or the Pink Sheets) decides to move its shares to a major stock exchange, like the Nasdaq or New York Stock Exchange (NYSE). Uplisting typically occurs when the company meets the specific listing requirements of the larger exchange, including higher financial standards, a certain minimum share price, and increased reporting and compliance obligations.

We have been receiving numerous inquiries from individuals interested in understanding the process of listing on NASDAQ exchange and obtaining a listing code, as well as the associated costs and significance of such a move.

The NASDAQ main board is known for its stringent regulatory oversight by the U.S. Securities and Exchange Commission (“SEC”), the exchange itself, and the Public Company Accounting Oversight Board (“PCAOB”). Among the critical stages of listing is the financial audit, which goes beyond mere financials to encompass rigorous due diligence on legal and operational aspects. Listing in the U.S. requires adherence to International Financial Reporting Standards (“IFRS”), setting it apart from the accounting practices of many smaller businesses.

Obtaining a NASDAQ listing code may not be overly complex, but navigating the SEC and NASDAQ inquiry process can be intricate. The listing journey involves transforming a company’s equity assets into tradable securities, and as such, it requires rigorous due diligence to safeguard investor interests and build market trust. A successful listing opens up new opportunities for trading, financing, and expansion, potentially leading to increased valuation and the possibility of mergers and acquisitions.

However, it is essential to clarify that acquiring a NASDAQ listing code does not equate to a successful listing; rather, it is just one step in the overall process. True success is achieved when a company successfully navigates SEC and NASDAQ inquiries, gains listing approval, and commences trading.

Key Steps in the NASDAQ Listing Process

To achieve legal compliance, stable operations, and fulfil listing requirements, it is imperative for the company, especially newer ones, to undertake a comprehensive financial “clean-up” process. This involves standardizing financial reporting and engaging a team of seasoned professionals, including U.S. lawyers, Cayman lawyers, U.S. auditors, brokers, and broker lawyers, to meticulously draft the prospectus.

The prospectus should encompass essential aspects, starting with a well-crafted introduction, followed by a comprehensive business overview, including a detailed explanation of the business model. The financial section must include audited financial data for at least two periods, accompanied by audit reports.

Apart from financials, the prospectus should also encompass a thorough explanation of the company’s structure and legal considerations, including compliance with both Malaysian and U.S. laws, ensuring transparent and detailed disclosures throughout. Professional guidance firms play a crucial role in coordinating various intermediaries to successfully submit the initial version of the prospectus to the SEC.

Companies have the option to choose between confidential and public submission methods. Confidential submission restricts access to the disclosed information solely to the SEC, while public submission makes the information accessible to anyone with internet access via the SEC’s official website.

However, it is essential to emphasize that the prospectus should adhere strictly to all regulatory requirements. Mere disclosure of information does not guarantee listing; the company must be prepared to undergo rigorous SEC and NASDAQ inquiries, secure listing approval, and successfully complete the initial public offering (IPO) financing for a successful listing.

Potential Pitfalls with Non-Standard Listing Approaches

Opting for a NASDAQ code before focusing on standard prospectus disclosure may cause delays and increased communication, time, and cost in subsequent steps.
Even with public transparency, insufficient information disclosure and poor response to SEC inquiries can hinder the listing process, prolonging time and increasing costs.
Regardless of where the listing takes place, drafting the prospectus with great care is crucial because listing is a significant undertaking.
The SEC requires timely and comprehensive responses to inquiries. Failure to provide complete information may lead to multiple queries, potentially hindering the listing process.

Hence, it is crucial for companies seeking to list on NASDAQ to ensure a high level of standardization when submitting their initial documents to the SEC. Opting for public transparency should not compromise the meticulousness and regulatory compliance of the disclosed information, as adherence to standardization forms the bedrock of a successful listing process!

Indeed, the entire process of going public requires careful planning and seeking assistance from professional teams to ensure adherence to standard procedures The significance of well-structured prospectuses and transparent disclosure cannot be overstated, and our experience with multiple successful cases empowers us to facilitate a smoother listing journey. Let us always bear in mind that going public is a serious endeavour, and it is only through rigorous processes and thorough evaluations that a company can achieve success in listing on NASDAQ.

Learn More about Nasdaq Listing:

On June 30, 2023, Bukit Jalil Global Acquisition 1 LTD (“BUJAU” or the “Company”) (NASDAQ: BUJAU), a special purpose acquisition company (“SPAC”) headquartered in Kuala Lumpur, Malaysia, successfully made its debut on the Nasdaq. BUJAU announced the completion of its initial public offering (IPO), raising US$57.5 million by issuing 5,750,000 units at a price of US$10 per unit. The units have been trading on the Nasdaq stock exchange since June 28, 2023, under the ticker symbol “BUJAU.”

BUJAU is sponsored by Bukit Jalil Global Investment Ltd., the company aims to engage in business combinations with one or more businesses or entities through mergers, stock exchanges, asset acquisitions, stock purchases, reorganizations, or similar business combinations. The company is actively seeking a potential target business, without any specific industry or geographic limitations.

Although BUJAU has not yet identified its target industry, its focus will be on emerging growth companies that already generate or have the potential to generate cash flows. Neil Foo, the Chairman and Director of BUJAU, “We have certain targets in mind, such as asset-light, tech, and healthcare companies. We will broadly consider companies that have an asset-light structure, strong management and technology, particularly those with high growth potential and significant market opportunities.” By going public through a SPAC, the company gains access to more international options.

BUJAU is not the first ever Malaysia-based SPAC in the market. Prior to BUJAU, there were others Malaysian-based SPACs listed on Nasdaq, such as Fellazo Inc. (“Fellazo”) (NASDAQ: FLLCU), which conducted its IPO in July 2019. However, Fellazo was unable to secure a qualified business combination or asset injection within the designated timeframe and was subsequently delisted.

Additionally, Kairous Acquisition Corp. Ltd. (“Kairous”) (NASDAQ: KACLU) is listed in December 2021 and has recently announced a one-month extension for the completion of a business combination from July 16, 2023, to August 16, 2023. The purpose of the extension is to provide time for Kairous to complete a business combination.

ARB Berhad is a Malaysian technology company that provides IT software and platform services and is listed on Bursa Malaysia. The company recently spin-off ARB IOT LTD (ARBB) and rasied USD 5 Millions IPO on Nasdaq. This event marks them as the fourth Malaysian issuer to list on Nasdaq since 2022.

What is Corporate Spin-Off ?

Corporate spin-off refers to the process of separating a subsidiary or division of a company into a new, independent entity. While the new entity operates independently, it is still managed by the same management team, and be allowed to present its financial information independently from the parent company.

Why ARB IOT Group Limited Spin-Off From Its Parent Company?

1. Drive Higher Stock Prices

Separating a subsidiary from its parent company enables investors to evaluate its financial performance and potential independently, leading to a potentially higher stock exchange valuation by eliminating the influence of the parent company’s other businesses.

2. Simplify Business Operations and Drive Greater Brand Success

By becoming an industry leader and focusing solely on its core business, it allows them to streamline their operations and improve efficiency and profitability. This creates an attractive proposition for new stakeholders and drives profits, without being hindered by unrelated operations

3. Unlocking Potential

Focusing solely on developing and commercializing a unique product or technology can enable a subsidiary to demonstrate its capability of successfully bringing innovative products or technology to market, which can attract additional investment and partnerships.

ARB IOT Group's CEO
Dato' Sri Larry Liew Kok Leong

According to ARB IOT Group’s CEO, Datuk Seri Larry Liew Kok Leong, the company intends to become the top IoT player in the ASEAN region, using its listing on NASDAQ to fuel its growth.

“We believe that being listed on NASDAQ, a globally recognized stock exchange, will not only leverage our listing status but also enhance our business profile and visibility.”

Additionally, he mentioned that ARB IOT Group will prioritize opportunities by focusing on strategic acquisitions to expand their international presence.

Corporate spin-off can be used as a strategy to explore other stock markets with various benefits. If you’re interested, please don’t hesitate to reach out and contact us !

US Stock Market Listing Seen As Growth Opportunity For ASEAN Firms

In February 2023, Bob McCooey, the Vice Chairman of Nasdaq, has expressed that ASEAN companies have the potential to flourish in 2023 by listing on the US stock market. He highlights that the region’s companies have seen substantial growth and have now achieved the necessary size and scale for US exchanges.

Challenges Encountered By ASEAN Corporations In Listing On The US Capital Market

However, there are challenges to listing on the US capital market, as outlined below:

1. Compliance With US Regulations

One of the biggest difficulties that ASEAN companies face when trying to get listed on the US stock market is that US authorities require them to follow strict rules and regulations. These include adhering to accounting standards that may differ from their home country, providing detailed financial disclosures, and following various corporate governance regulations.

2. Time And Cost

The process of getting listed on US stock market can be complicated and time-consuming that often requires the assistance of legal and financial experts. Small companies with limited resources may face even greater challenges in meeting the compliance of US stock exchanges and regulators. In addition, the listing process can take several months or years, which may distract management from their daily operations, resulting in added expenses to hire professional help.

3. Time Zone Differences And Communication Barriers With US Service Provider

Time zone differences between ASEAN and the US may cause communication delays, slow response times, and limited availability of support from US service providers, which may ultimately cause listing process delays. Furthermore, language and cultural differences between ASEAN and the US could create communication barriers, increasing the complexity of the listing process. Ultimately, misunderstandings and errors may occur due to ineffective communication.

4. Limited Brand Recognition

It can be challenging for ASEAN-based corporations in attracting US investors as they may not be familiar with them. Furthermore, there may be a lack of understanding about the ASEAN region and its business practices, leading to mistrust and reluctance to invest. Therefore, additional marketing and advertising efforts may be required to build brand awareness and establish a positive reputation among US investors.

US Stock Markets Welcome ASEAN Companies For Listings

Despite the difficulties that may come with listing on the US capital market, US exchanges have been actively promoting themselves as destinations for ASEAN companies seeking to go public, as outlined below:

1. Streamlining The IPO Process Using Technology

US stock exchanges are leveraging technology to simplify the IPO process for foreign companies, with NYSE Connect being a prime example. This digital platform provides a range of resources and tools to simplify the IPO process. The platform offers market data, educational materials, and access to service providers, as well as a virtual roadshow tool that facilitates remote meetings with investors, making the process more efficient and cost-effective.

2. Cross-listings Partnership

Nasdaq has established an office in Singapore and collaborated with the Singapore Exchange (SGX) to promote cross-listings and attract ASEAN firms. This partnership allowing businesses to simultaneously list on both platforms, resulting in a larger investor base. In addition, ASEAN companies can also enjoy numerous benefits from this collaboration, such as improved access to capital, greater visibility, and increased liquidity.

3. Offering Regulatory Relief

To attract more foreign companies to list on US stock exchanges, the US government has offered some regulatory relief. As a part of this relief, some reporting requirements that are obligatory for US companies have been waived. This action simplify and reduce the cost of foreign companies’ entry to US capital markets, and therefore allow them to expand their global presence.

4. Provide Listing Programs

US exchanges have introduced programs to attract international listings, including ASEAN companies. The NYSE International Listings program provides dedicated support and guidance to companies navigating the listing process, while the Nasdaq International Designation program offers access to market intelligence and trading data. These initiatives can help companies overcome regulatory challenges and increase their visibility and investor base in the US.

Nasdaq Rolls Out Welcome Mat For Malaysian Companies

In October 2022, McCooey intends to encourage more Malaysian companies to list on Nasdaq, recognizing their potential to outperform in its extensive and diverse market. He emphasized that the combined value of all firms listed on American markets is more than 12 times that of the Hong Kong Stock Exchange, the biggest market in the area. This implies that Nasdaq has higher company valuations than other stock exchanges, which could potentially offer promising growth opportunities for Malaysian companies that aim to be listed on Nasdaq.

Highlight To Addentax Group Corporation (NASDAQ : ATXG)

In August 2022, our client, Addentax Group Corporation (NASDAQ: ATXG) has achieved a successful up-listing from OTCQB to Nasdaq Capital Market, with $25 million IPO raised. The company secured another $15 million in funding through a private issuance of senior with specific accredited investors within four months of its up-listing.

About Addentax Group Corporation (NASDAQ : ATXG)

Addentax Group Corp., founded in 2014 and based in Shenzhen, is a consulting firm that specializes in managing international supply chains for the textile and garment industry. It operates in two key areas: Garment Manufacturing, catering to wholesalers within China, and Logistics Services, offering delivery and courier services in specific provinces.

How Our Team Help Addentax Group During IPO Listing Process

1. Appointing US-based Auditor & Independent Director

Before Addentax Group was approved for listing on the US stock exchange, they were required to comply with certain regulations, including appointing an independent director based in the US and a US-based auditor with more experience and a larger team size to prevent mistrust issues. Our team helped the client by identifying a suitable audit firm and finding two trustworthy individuals who could serve as qualified independent directors, ensuring that they met all US regulatory requirements. This helped Addentax Group achieve compliance and gain approval for listing on the US stock exchange.

2. Providing Detailed Listing Timeline

The management of Addentax Group became distracted by the listing process, which prevented them from focusing on their daily operations and expanding their business. Besides, they overspent by engaging multiple service providers at the wrong timing. Our team provided a solution by creating a detailed listing timeline for the company. We advised them to engage suitable service providers at each specific timeline to ensure that they fulfill their responsibilities and avoid unnecessary costs. This approach allowed the company to manage their time and resources more effectively during the listing process.

3. Seamless Support Across Time Zones

Addentax Group, being an Asian company, faced various communication barriers such as language differences, diverse accounting standards, and limited knowledge of the listing process. Furthermore, the different time zones added complexity to the process, which had slowed down the listing process. Our team’s extensive experience in dealing with various service providers allowed us to overcome the communication barriers and streamline the listing process. Our expertise and professionalism assisted ATXG in promptly addressing important matters even under different time zones. Our efforts in this regard helped ATXG to avoid any potential regulatory issues, and ensured that all necessary disclosures were made in a timely and accurate manner.

4. Investor Relations Establishment

As Asian companies often struggle with limited brand recognition and reputation among US and global investors, it can be challenging for investors to identify the brand and IPO news of Addentax Group. We recommended that ATXG establish a suitable investor relations team and assisted them with matters related to IPO roadshows. This helped to increase the visibility and appeal of the company to potential investors, ultimately leading to increased investment in their business. Our efforts enabled ATXG to overcome the challenges of limited brand recognition and reputation, and successfully navigate the IPO process.

Addentax Group Corporation’s successful up-listing to the Nasdaq Capital Market and subsequent fundraising is a testament to their potential as a company, and our team’s ability to provide comprehensive solutions for clients facing common obstacles during the IPO listing process. By ensuring compliance with US regulations, managing time and cost, overcoming communication barriers, and enhancing brand recognition, we were able to support Addentax Group Corporation in achieving a successful IPO. We look forward to continuing to assist our clients in navigating the complex world of capital market regulations and IPO listing requirements.

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.

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ARB IOT Group's CEO
Dato' Sri Larry Liew Kok Leong

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ARB IOT Group's CEODato' Sri Larry Liew Kok Leong

Site Links

Partners

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©2023 Hexcellence Consulting Sdn. Bhd. All rights reserved.

ARB IOT Group's CEO
Dato' Sri Larry Liew Kok Leong