F-1/A: Grande Group Seeks SEC Waiver for IPO Financial Statement Deadline

Grande Group Limited, a British Virgin Islands-based foreign private issuer, has filed an amendment to its Form F-1 registration statement, requesting a waiver from the SEC's 12-month audited financial statement requirement for its proposed U.S. initial public offering.

Summary

• Grande Group Limited, a foreign private issuer, is preparing for an initial public offering (IPO) and listing of its ordinary shares in the United States.
• The company has submitted a request to the U.S. Securities and Exchange Commission (SEC) to waive the requirement of Item 8.A.4 of Form 20-F, which mandates audited financial statements not older than 12 months from the offering date for IPOs.
• Grande Group's current registration statement includes audited consolidated financial statements for the two years ended March 31, 2024, and March 31, 2023, along with unaudited interim financial statements for the six months ended September 30, 2024.
• The company represents that it is not a public reporting company in any other jurisdiction and is not required to prepare audited interim consolidated financial statements elsewhere.
• Compliance with the 12-month requirement is deemed impracticable and involves undue hardship for the company.
• Audited financial statements for the fiscal year ended March 31, 2025, are not anticipated to be available until early July 2025.
• The company commits not to seek effectiveness of the Registration Statement if its audited financial statements are older than 15 months at the time of the IPO.
• The filing also details the company's corporate history, including its incorporation in August 2020, a reorganization in January 2023, a 100,000-for-1 share subdivision in June 2024, and subsequent share sales and reclassification into Class A and Class B Ordinary Shares in July and November 2024.
• As of November 18, 2024, the company has 17,750,000 Class A Ordinary Shares and 5,000,000 Class B Ordinary Shares issued and outstanding.

Sentiment

Score: 7

Explanation: The document indicates active progress towards a U.S. IPO, which is a positive strategic move. While a waiver request implies a procedural hurdle, the company's proactive approach and alignment with SEC guidance for foreign private issuers suggest a well-managed process. The detailed corporate history and governance information also contribute to a sense of transparency and readiness for public listing.

Positives

• The company is actively progressing towards its initial public offering in the U.S. market, indicating strategic growth ambitions.
• Management has proactively addressed a potential regulatory hurdle by formally requesting a waiver, demonstrating engagement with SEC requirements.
• The company has provided a clear commitment not to proceed with the IPO if financial statements are older than 15 months, aligning with SEC staff guidance for most IPOs.

Negatives

• The company is unable to meet the standard 12-month audited financial statement requirement for its IPO, necessitating a waiver.
• The delay in the availability of audited financial statements for the fiscal year ended March 31, 2025, until early July 2025, could potentially impact the IPO timeline.

Risks

• The SEC may not grant the requested waiver, potentially delaying or complicating the initial public offering.
• The company's ability to indemnify its directors and officers is subject to BVI law and the company's articles, with any indemnity given in breach of good faith/lawful conduct provisions being void.
• Indemnification for liabilities under the Securities Act of 1933 may be deemed against public policy by the SEC, potentially limiting protection for directors, officers, and controlling persons.

Future Outlook

Grande Group Limited is actively pursuing an initial public offering and listing of its ordinary shares in the United States. The company anticipates its audited financial statements for the fiscal year ended March 31, 2025, will be available in early July 2025, and has committed not to seek effectiveness of its Registration Statement if its audited financial statements are older than 15 months at the time of the IPO.

Management Comments

• "Please do not hesitate to contact me if you have any questions regarding the foregoing or if we can provide any additional information." Yujie, CHEN, Chief Executive Officer and Chair of the Board.

Industry Context

This filing is a procedural step for a foreign private issuer seeking to list on a U.S. exchange. It reflects the ongoing trend of international companies, particularly from Asia, seeking access to U.S. capital markets. The waiver request highlights the differences in financial reporting timelines and requirements between various jurisdictions and the U.S. SEC, a common challenge for foreign registrants.

Comparison to Industry Standards

• The company's request for a waiver from the 12-month audited financial statement rule aligns with the SEC's Financial Reporting Manual Section 6220.3 and the 2004 release 'International Reporting and Disclosure Issues,' which indicates that the staff will waive this requirement where it is not applicable in the registrant's other filing jurisdictions and is impracticable or involves undue hardship. This suggests the company is following established precedents for foreign private issuers, such as those seen with other non-U.S. companies like Alibaba Group Holding Limited or Baidu, Inc. during their initial U.S. listings, which also navigated specific SEC reporting requirements for foreign registrants.
• The company's commitment to ensure audited financial statements are not older than 15 months at the time of IPO aligns with the '15-month rule' that the SEC staff expects the vast majority of IPOs to be subject to, rather than the stricter 12-month rule, provided the conditions for waiver are met. This is a common practice for foreign private issuers not subject to similar interim audit requirements in their home jurisdictions.

Corporate Governance

Related Party Transactions

• On January 17, 2023, the two initial shareholders transferred their 45 and 55 Ordinary Shares to Grande Holding Limited (formerly Homei Holdings Inc.), making Grande Group Limited wholly owned by Grande Holding Limited. This was part of a reorganization.
• On July 4, 2024, Grande Holding Limited sold 4.9%, 4.8%, and 4.7% equity interests in Grande Group Limited to Beyond Worth Limited, Charming Apex Limited, and Merleos Technology Limited, respectively. These entities may be related parties or affiliates, given the specific percentages and simultaneous transactions.
• On November 18, 2024, the company issued additional Class A and Class B Ordinary Shares to Grande Holding Limited, Beyond Worth Limited, Charming Apex Limited, and Merleos Technology Limited, further solidifying their ownership stakes.

Stakeholder Impact

• **Shareholders**: Existing shareholders (Grande Holding Limited, Beyond Worth Limited, Charming Apex Limited, Merleos Technology Limited) will see their ownership structure evolve with the reclassification and new share issuances, and will be impacted by the upcoming IPO. New public shareholders will gain exposure to the company's performance.
• **Investors (Prospective)**: The waiver request and the company's commitment to the 15-month rule provide clarity on the financial reporting timeline for the IPO, aiding their due diligence.
• **Management/Directors**: The indemnification provisions offer protection against liabilities, which is beneficial for attracting and retaining leadership.
• **Regulators (SEC)**: The filing demonstrates the company's engagement with U.S. regulatory requirements and its efforts to comply with disclosure standards for foreign private issuers.

Next Steps

• The company awaits the SEC's decision on its waiver request for the 12-month audited financial statement requirement.
• The company anticipates the availability of its audited financial statements for the fiscal year ended March 31, 2025, in early July 2025.
• The company will not seek effectiveness of the Registration Statement if its audited financial statements are older than 15 months at the time of the IPO.
• The company will proceed with its proposed initial public offering and listing in the United States upon meeting all regulatory requirements and receiving SEC effectiveness.

Key Dates

Keywords

Grande Group Limited, IPO, Initial Public Offering, SEC Filing, Form F-1, Form 20-F, Financial Statement Waiver, Audited Financial Statements, Foreign Private Issuer, British Virgin Islands, Corporate Governance, Share Subdivision, Share Reclassification, Capital Raise