F-1/A: BrilliA Inc Eyes NYSE American Listing with 2.5 Million Share IPO

BrilliA Inc, a Cayman Islands-based holding company, plans to raise capital through an initial public offering of 2.5 million Class A shares on the NYSE American.

Summary

• BrilliA Inc, a holding company with operations in the BVI and Indonesia, is planning an initial public offering (IPO) of 2,500,000 Class A shares.
• The anticipated IPO price is between $4.00 and $5.00 per share, with an assumed price of $4.00 for prospectus purposes.
• The company intends to list its Class A shares on the NYSE American under the ticker symbol BRIA.
• Post-IPO, BrilliA's issued and outstanding shares will consist of 25,000,000 Class A shares and 5,625,000 Class B shares.
• Mr. Salim, the controlling shareholder, will own approximately 56.8% of Class A shares and 100% of Class B shares, representing approximately 92.1% of the total voting power.
• Net proceeds from the offering are estimated at $7.5 million, which will be used for developing a digital marketing platform, research and development, expanding the existing B2B business, and general working capital.
• The company plans to develop the DIANA brand of lingerie and apparel products, diversifying its business and potentially increasing margins.
• A.G.P./Alliance Global Partners is the sole book-running manager for the offering and will receive warrants to purchase 5.0% of the aggregate number of Class A Shares sold in the offering.

Sentiment

Score: 6

Explanation: The document presents a balanced view, highlighting both the opportunities and risks associated with the company's IPO and future plans. While the company has strengths and growth strategies, it also faces challenges and risks that could impact its business and financial performance.

Positives

• The company has strong design and sourcing capabilities.
• BrilliA maintains strong and stable relationships with key customers.
• The management team has extensive industry expertise.
• The company has a vertically integrated operation offering one-stop apparel supply chain services.

Negatives

• The company is dependent on its major customers.
• Developing the DIANA brand with limited brand recognition is challenging.
• Any disruption to the supply of and any increase in the prices of raw materials could adversely affect the company's production, turnover and profitability.

Risks

• The company is dependent on its customers, and failure to successfully provide stylish and quality products to its customers may materially and adversely affect its business and results of operations.
• There could be a potential conflict of interest between the controlling shareholder Mr. Salim and the company in the future with respect to the license of the DIANA brand.
• Launching the DIANA brand raises risks such as an erosion of trust and reputation with the company's customers, conflicts of interest with its customers, market fragmentation leading to reduced margins, customer alienation, and innovation stagnation.
• The company's business is subject to supply chain interruptions.
• The company is dependent on third-party manufacturers and raw material suppliers for its lingerie and other apparel products.
• Bra Pro historically has had substantial customer concentration, with a limited number of customers accounting for a substantial portion of its revenues.
• Any significant damage to the company's primary facility could have a material adverse effect on its results of operations.
• The company relies on its ability to design in response to changes in its consumers preference in a timely manner.
• The company may be unable to successfully implement its business objectives and its expansion plans may not be successful.
• The company's success depends upon its key management personnel.
• If the company is unable to maintain and protect its intellectual property, or if third parties assert that it infringes on their intellectual property rights, its business could suffer.
• The company's business and operations may be affected by its ability to enter into or renew the existing license agreement for the DIANA Brand.
• The company's business and operations may be materially and adversely affected in the event of a re-occurrence of an outbreak of COVID-19 or of another pandemic of similar scale to COVID19.
• The company is exposed to risks arising from fluctuations of foreign currency exchange rates.
• The company's business operations may be subject to seasonality.
• The effect and impact of the recently enacted Omnibus Law on job creation in Indonesia are not immediately known and subject to ongoing review.
• Current political and social events in Indonesia may adversely affect the company's business.
• Deterioration of political, economic and security conditions in Indonesia may adversely affect the company's operations and financial results.
• Terrorist activities in Indonesia could destabilize Indonesia, which would adversely affect the company's business, financial condition and results of operations, and the market price of its securities.
• Fluctuations in the value of the Indonesian Rupiah may materially and adversely affect the company.
• Indonesia is vulnerable to natural disasters and events beyond the company's control, which could adversely affect its business and operating results.
• The company may be affected by uncertainty in the balance of power between local governments and the central government in Indonesia.
• An active trading market for the company's Class A Shares may not be established or, if established, may not continue and the trading price for its Class A Shares may fluctuate significantly.
• The company may not maintain the listing of its Class A Shares on the NYSE American which could limit investors ability to make transactions in its Class A Shares and subject it to additional trading restrictions.
• The trading price of the company's Class A Shares may be volatile, which could result in substantial losses to investors.
• The company may experience extreme stock price volatility, including any stock-run up, unrelated to its actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of its Class A Shares.
• If securities or industry analysts do not publish research or reports about the company's business, or if they adversely change their recommendations regarding its Class A Shares, the market price for its Class A Shares and trading volume could decline.
• Because the company does not expect to pay dividends in the foreseeable future, you must rely on price appreciation of its Class A Shares for a return on your investment.
• The sale or availability for sale of substantial amounts of the company's Class A Shares could adversely affect their market price.
• Short selling may drive down the market price of the company's Class A Shares.
• Because the company's public offering price per share is substantially higher than its net tangible book value per share, you will experience immediate and substantial dilution.
• You must rely on the judgment of the company's management as to the uses of the net proceeds from this offering, and such uses may not produce income or increase its share prices.
• If the company is classified as a passive foreign investment company, United States taxpayers who own its securities may have adverse United States federal income tax consequences.
• As a company incorporated in the Cayman Islands, the company intends to adopt certain home country practices in relation to corporate governance matters that differ significantly from NYSE American Company guide, namely (i) there will not be a necessity to have regularly scheduled executive sessions with independent Directors; and (ii) there will be no requirement for the Company to obtain shareholder approval prior to an issuance of securities in connection with (a) the acquisition of stock or assets of another company; (b) equity-based compensation of officers, directors, employees or consultants; (c) a change of control; and (d) transactions other than public offerings. These practices may afford less protection to shareholders than they would enjoy if the company complied fully with NYSE American corporate governance listing standards.
• The company's controlling shareholder has substantial influence over the company. Its interests may not be aligned with the interests of its other shareholders, and it could prevent or cause a change of control or other transactions.
• The company's controlling shareholder may have potential conflicts of interest with the company, which may materially and adversely affect its business and financial condition.
• As a controlled company under the rules of NYSE American, the company may choose to exempt its Company from certain corporate governance requirements that could have an adverse effect on its public shareholders.
• You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because the company is incorporated under Cayman Islands law.
• The company is an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
• The company is a foreign private issuer within the meaning of the Exchange Act, and as such it is exempt from certain provisions applicable to United States domestic public companies.
• The company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses to it.
• The company's management team lacks experience in managing a U.S.-listed public company and complying with laws applicable to such company, the failure of which may adversely affect its business, financial conditions and results of operations.
• The company will incur significantly increased costs and devote substantial management time as a result of the listing of its Class A Shares on the NYSE American.
• If the company fails to maintain an effective system of internal controls, it may be unable to accurately or timely report its results of operations or prevent fraud, and investor confidence and the market price of its Class A Shares may be materially and adversely affected.
• Certain judgments obtained against the company or its auditor by its shareholders may not be enforceable.
• Further issuances of Class B Shares may result in a dilution of the percentage ownership of the existing holders of Class A Shares as a total proportion of Ordinary Shares in the Company.
• The company intends to grant employee share options and other share-based awards in the future. The company will recognize any share-based compensation expenses in its statements of comprehensive loss. Any additional grant of employee share options and other share-based awards in the future may have a material adverse effect on its results of operation.
• The company may be exposed to liabilities under the Foreign Corrupt Practices Act. Any determination that the company violated the Foreign Corrupt Practices Act could have a material adverse effect on its business.

Future Outlook

The company plans to diversify its business through the licensed brand, DIANA, and expand its product range and geographical presence.

Industry Context

The global lingerie market is expected to grow at a CAGR of 5.7% through 2030, driven by factors such as increased spending power, fashion awareness, and body positivity. The Southeast Asia lingerie market is expected to grow at a CAGR of 5.3% from 2023 to 2030.

Comparison to Industry Standards

• The global lingerie market is marked by intense competition among established and emerging brands, including Tennor Holding B.V. (La Perla), Wacoal Holdings Co., Ltd., and Victorias Secret Stores, LLC.
• Major brands in the lingerie market prioritize quality, ethical and sustainable practices, and innovation.
• The company's strategy of new product launches and expansions aligns with the strategies of many companies in the Southeast Asia lingerie market.
• The company's focus on product quality and skill-intensive product offerings differentiates it from competitors in countries with lower labor costs, such as Bangladesh.

Related Party Transactions

• Bra Pro engages PT Star Alliance Intimates as a contract manufacturer.
• Bra Pro has enlisted SCP International as a service provider to manage the distribution of customer orders (contract terminated as of December 31, 2022).
• MAP entered into a trademark license agreement with PT Diana Mode Indonesia to use the trademark of DIANA.
• MAP leases the company office from Salim Podiono.
• Mr. Salim Podiono receives remuneration as commissioner of MAP.

Stakeholder Impact

• Shareholders will be subject to the risks associated with investing in a new public company.
• Employees may benefit from the company's growth and expansion plans.
• Customers may benefit from the company's plans to develop the DIANA brand and offer a wider range of products.
• Suppliers and contract manufacturers may benefit from the company's expansion plans.

Next Steps

• The company intends to list the Class A Shares on the NYSE American.
• The company plans to develop the DIANA brand of products and distribution channels.
• The company plans to develop new customers through digital marketing.
• The company plans to further develop design and development capabilities.
• The company plans for product and geographical expansion.
• The company will consider expanding business and operations through joint ventures, acquisitions and/or strategic alliances.

Key Dates

Keywords

IPO, initial public offering, Class A Shares, lingerie, apparel, DIANA brand, NYSE American, BrilliA Inc, investment, manufacturing, fashion, retail, Indonesia, BVI