F-1/A: Baiya International Group Seeks Waiver for IPO Financial Statement Requirements

Baiya International Group Inc. requests a waiver from the SEC regarding the 12-month requirement for audited financial statements in its Form F-1 registration statement for its proposed IPO.

Summary

• Baiya International Group Inc., a foreign private issuer, is seeking a waiver from the U.S. Securities and Exchange Commission (SEC) regarding Item 8.A.4 of Form 20-F.
• This item requires that an IPO registration statement on Form F-1 must contain audited financial statements as of a date not older than 12 months at the time of filing and effectiveness.
• The company is requesting this waiver because it anticipates that its audited financial statements for the fiscal year ended December 31, 2024, will not be available until April 2025.
• Baiya International Group Inc. represents that it is not required to comply with the 12-month updating requirement in any other jurisdiction outside the United States and that complying with this requirement is impracticable and involves undue hardship.
• The company assures that it will not seek effectiveness of the Registration Statement if its audited financial statements are older than 15 months at the time of its IPO.
• The company is offering 2,500,000 ordinary shares, with an option for underwriters to purchase an additional 375,000 shares.
• The underwriting discount is 7.5% of the gross proceeds, with a 1% non-accountable expense allowance.
• The company will pay an advisory fee of $150,000, with $60,000 already paid, and an accountable expense allowance of up to $150,000.
• Insiders have agreed to a 180-day lock-up period, while the company has agreed to a 90-day lock-up period, with certain exceptions.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. The company is proceeding with its IPO plans, but there are some challenges related to financial reporting and regulatory compliance. The presence of lock-up agreements and the right of first refusal agreement are positive signals.

Positives

• The company is taking steps to ensure compliance with regulations, including Sarbanes-Oxley.
• The company has obtained consents from legal counsel and auditors.
• The company has secured lock-up agreements from insiders to prevent stock dumping after the IPO.
• The company has a right of first refusal agreement with Revere Securities LLC for future investment banking services.

Negatives

• The company requires a waiver from the SEC, indicating a potential delay in financial reporting.
• The company's audited financial statements for the fiscal year ended December 31, 2024, will not be available until April 2025.
• The company is subject to PRC regulations, which could impact its operations and financial performance.
• The company is exposed to potential liabilities related to indemnification and contribution.

Risks

• The company's request for a waiver from the SEC may not be granted, potentially delaying the IPO.
• The company's reliance on PRC regulations could pose risks to its operations and compliance.
• The company's business operations could be affected by material adverse changes or events.
• The company's indemnification obligations could expose it to potential liabilities.
• The company's lock-up agreements may not prevent all insiders from selling shares after the IPO.

Future Outlook

The company intends to list its shares on the Nasdaq Capital Market and will use the net proceeds from the sale of the Securities as set forth under the caption Use of Proceeds in the Prospectus.

Management Comments

• Siyu Yang, Chief Executive Officer and Director, stated that the company is submitting the waiver request pursuant to Instruction 2 to Item 8.A.4 of Form 20-F.
• Siyu Yang stated that the company does not anticipate that its audited financial statements for the fiscal year ended December 31, 2024 will be available until April 2025.

Industry Context

The request for a waiver highlights the challenges faced by foreign private issuers in meeting U.S. financial reporting requirements for IPOs. The SEC's willingness to grant such waivers, as indicated in its Financial Reporting Manual, aims to facilitate access to U.S. capital markets for international companies while ensuring investor protection.

Comparison to Industry Standards

• The 15-month rule is generally applied to IPOs unless compliance with the 12-month rule is required in another jurisdiction or the audited financial statements are readily available.
• Comparable companies seeking IPOs in the US market typically adhere to either the 12-month or 15-month rule for audited financial statements, depending on their specific circumstances and the SEC's guidance.
• The underwriting fees and expense allowances are within the typical range for IPOs of similar size and complexity, but the specific terms may vary depending on the underwriter and the company's negotiation power.
• Lock-up agreements are standard practice in IPOs to prevent insiders from immediately selling their shares and potentially destabilizing the market.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of new shares.
• Employees may benefit from the company's growth and success following the IPO.
• Customers may benefit from the company's ability to invest in new products and services.
• Suppliers may benefit from increased business with the company.
• Creditors may be impacted by the company's financial performance and ability to repay debts.

Next Steps

• The company needs to obtain a waiver from the SEC regarding the 12-month requirement for audited financial statements.
• The company needs to file the Prospectus pursuant to Rule 424(b) within the prescribed time period.
• The company needs to ensure that the Securities are listed and admitted and authorized for trading on the Nasdaq Capital Market.
• The company needs to comply with the PRC laws and regulations governing the Companys listing on an exchange not in the PRC.

Key Dates

Keywords

IPO, waiver, registration statement, underwriting agreement, financial statements, lock-up agreement, ordinary shares, Baiya International Group, SEC, offering