Oriental Culture Holding Ltd. has picked up IPO efforts in New York, seeking to raise up to $20 million.
The e-commerce platform for collectibles, based in Nanjing City, Jiangsu province, hopes to sell 5 million ordinary shares at $4 each in an initial public offering on the Nasdaq Capital Market.
Oriental Culture operates in China through Jiangsu Yanggu Culture Development Co. Ltd., and in Hong Kong though China International Assets and Equity of Artworks Exchange Ltd. and HKDAEx Ltd. It facilitates trading of collectibles and artworks and provides online and offline integrated marketing, storage, and technical maintenance services.
Oriental Culture first applied for a $10 million U.S. listing in November 2019. Now, it has doubled its offering and updated its prospectus on the Covid-19 impact, as well as 2019 financials.
For the full year 2019, Oriental Culture reported $13.4 million in operating revenues, up 153% year-over-year. Net income was $9.1 million compared with $2.6 million in 2018, according to the filing. Operating expenses increased 43% to $3.1 million.
The company said its offices located in Hong Kong and China were closed for the Lunar New Year holidays and during the days of quarantine until early March. Its operations are now recovering, though its business activities are not fully back to normal as to the level before the outbreak.
In its filing, Oriental Culture also wrote, “During the closure of the offices, especially during the closure of our warehouse for collectibles and artwork traded on our platform, the appraisals for certain collectibles were delayed from the original beginning of February to mid-March, resulting in delays of the subsequent listing process of such collectibles, thus affecting the our incomes from listing fees and market service fees. Also, our warehouse was unable to take in the new collectibles from our customers for warehousing and evaluation during the period when it was closed.”
Oriental Culture also said the promotional activities were negatively impacted, and delays occurred in the shipping of collectibles for verification and custody.
Significantly, Covid-19 has hindered Oriental Culture’s plans to expand in the United States. This year, the company intended “to sign a contract with a market service company in the United States to carry out a comprehensive brand promotion, and at the same time, to cooperate with American collectible and artwork agencies to select Western-themed collectibles and artworks for listing on our platform.”
However, it continued, “the outbreak of the epidemic has delayed our implementation of our international market business development plan, which could affect our revenues in the long term.”
With the funds from the IPO, Oriental Culture said it plans to boost its IT and software to “accommodate international customers,” invest in its new trading business and marketing, expand in the United States as well as set up a U.S. office, warehouse and logistics, and use the rest for potential M&As.
Oriental Culture has applied to list in New York under the symbol “OCG.” ViewTrade Securities Inc. is underwriting the deal.