F-1/A: Powell Max Limited Seeks Nasdaq Listing with 1.65 Million Share IPO

Powell Max Limited, a BVI-incorporated holding company with Hong Kong operations, is pursuing an initial public offering of 1.65 million Class A Ordinary Shares to list on the Nasdaq Capital Market.

Summary

• Powell Max Limited, a BVI company with operations in Hong Kong through its subsidiary JAN Financial, is planning an IPO of 1,650,000 Class A Ordinary Shares.
• The offering represents approximately 11.2% of the Ordinary Shares after completion, assuming the underwriters do not exercise their over-allotment option.
• The expected price range for the Class A Ordinary Shares is between $4.00 and $6.00 per share.
• The company has applied to list its Class A Ordinary Shares on the Nasdaq Capital Market under the symbol PMAX.
• Powell Max operates a dual-class share structure with Class A shares having one vote and Class B shares having twenty votes.
• The company conducts its operations in Hong Kong through JAN Financial Press Limited, its sole operating subsidiary.
• The company's revenue for the years ended December 31, 2022 and 2023 are HK$37,772,821 and HK$49,121,839 (approximately US$6,288,883), respectively.
• The company expects to receive approximately US$4.8 million of net proceeds from this offering, assuming an IPO price of $4.00 per share and the underwriters do not exercise their over-allotment option.
• The company plans to use the net proceeds for operating cash flow, repayment of bank loans, registration and operation of overseas business entities, and potential mergers and acquisitions.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While there's revenue growth and a recent profitable year, the going concern warning and existing liabilities raise concerns. The regulatory risks associated with operating in Hong Kong add further uncertainty.

Positives

• The company's revenue increased from HK$37,772,821 in 2022 to HK$49,121,839 in 2023.
• The company had a net profit after taxation of HK$7,079,243 during the year ended December 31, 2023.
• The company intends to expand into the U.S. market.
• The company intends to pursue selective strategic investments, relationships and acquisition opportunities.

Negatives

• The company's independent registered public accounting firm has expressed substantial doubt as to the company's ability to continue as a going concern.
• The company had a deficit in equity of HK$15,312,968 as of December 31, 2023.
• The company had net liabilities of HK$15,312,968 as of December 31, 2023.
• The company had net current liabilities of HK$19,859,607 as of December 31, 2023.
• The company relies on dividends and other distributions on equity paid by its subsidiary to fund any cash and financing requirements it may have.

Risks

• The company's business is dependent on financial and business transactions in the Hong Kong equity market.
• The company relies on business partners, including printing and translation services providers.
• The company may be adversely affected by new technologies enabling clients to produce and file documents on their own.
• The company operates in a highly competitive market.
• The company's operations are located in Hong Kong, a special administrative region of the PRC, which could lead to intervention by the Chinese government.
• The company's management team lacks experience in managing a U.S. public company.
• The company will incur increased costs as a result of being a public company.
• The company is a controlled company, which could reduce investor protection.

Future Outlook

The company expects that its cash and bank balances as of December 31, 2023, together with the approximate US$4.8 million of net proceeds to be received from this offering, and additional capital financings completed or contemplated, will be sufficient to fund its operating expenses and capital expenditure requirements for at least one year from the date of issuance of the company's audited condensed financial statements for the year ended December 31, 2023.

Management Comments

• Management understands that as of the date of this prospectus JAN Financial has no operations in China and is not required to complete filing procedures with the CSRC pursuant to the requirements of the CSRC Filing Rules.
• Management monitors the cash position of JAN Financial regularly and prepares budgets on a monthly basis to ensure it has the necessary funds to fulfill its obligations for the foreseeable future and to ensure adequate liquidity.

Industry Context

The financial communications services industry is highly competitive with relatively low barriers to entry, and the industry remains highly fragmented in Hong Kong and internationally.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• The document does not list specific comparible companies, projects, and results.

Related Party Transactions

• As of December 31, 2023, the company was indebted to its Controlling Shareholder in the sum of US$2,391,425.
• On July 19, 2024, a loan settlement agreement was entered by and between the Company and its Controlling Shareholder, pursuant to which the Controlling Shareholder waived the said sum of US$2,391,425 upon the receipt of a promissory note (the Note) issued to Bliss On Limited for the principal sum of US$2,391,425, which will be converted into the Class A Ordinary Shares at the same price as the IPO price per Class A Ordinary Shares automatically prior to the trading of our Class A Ordinary Shares on Nasdaq.

Stakeholder Impact

• Shareholders will be subject to potential dilution from the IPO and the conversion of the Note.
• Shareholders will be subject to the risks associated with operating in Hong Kong.
• Shareholders will be subject to the risks associated with the company's financial condition.
• Employees may be affected by the company's ability to continue as a going concern.
• Customers may be affected by the company's ability to provide services.

Next Steps

• The company needs to obtain final approval from Nasdaq for its listing.
• The company needs to close the IPO.
• The company needs to implement its plans for using the net proceeds from the IPO.

Key Dates

Keywords

IPO, financial communications, Hong Kong, Nasdaq, Class A Ordinary Shares, financial printing, Powell Max Limited, JAN Financial, BVI