Last week, we came across a curious SEC filing from Huixinjia Capital Group laying out its plan to raise $700 million in a Nasdaq Reg A+ IPO that would value the company at $7 billion.
Multiple aspects of the filing are suspect.
- The maximum deal size allowed under Regulation A+ is $50 million.
- The auditor's opinion for the fiscal year ended 12/31/18 is dated 12/14/18. From Ernst & Young's office in "New York, CA."
- Much of the prospectus is plagiarized whole cloth from Ares Management's (ARES) 2014 IPO prospectus, except with Ares' name replaced with Huixinjia.
- George Soros is listed as co-founder, Secretary and Director (most of his bio is also copied from that of a former Ares executive).
- The document is labeled Form S-1 at the top, but it is filed as a 1-A. On the front page, the prospectus is dated both April 5, 2019, and May 1, 2019 (the filing date was July 1, 2019).
- Page numbers are out of order. And the first 10 pages are partially blocked by a massive white image.
- The corporate website it provides (www.Huixinjiamgmt.com) does not lead anywhere. And its New York address is a virtual office with mail forwarding. However, the website associated with the CEO's email does exist (www.hxjia.com).
A press release in May tried to hype the deal, saying that the company planned to offer shares at $3.50, but "according to Chinese reports... massive interest in China could drive Huixinjia’s share price beyond the top of its intended price range" and that it would help "China in its race to overtake the US as a world leader in AI technology."
In June, fraud concerns prompted the Nasdaq to propose...
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