FAQ

Golden Box Group possesses five core differentiating advantages:

• Top-notch expert team: Core members come from well-known investment banks, Wall Street financial institutions, top law firms and accounting firms at home and abroad, with solid practical experience;
• Full-chain investment and financing capabilities: Own dedicated investment fund, capable of making Pre-IPO investments, achieving dual empowerment of "advisory + investment";
• One-stop closed-loop service: Connecting the entire process of primary market listing guidance, investment and financing, compliance rectification and secondary market market value management;
• Global resource barriers: Having cultivated overseas markets for many years, we possess stable overseas securities firms, funds, and institutional capital resources;
• Customized implementation solutions: Abandoning standardized templates, we tailor solutions to suit the specific characteristics and scale of a company's industry.

Going public is merely the starting point for a company's capitalization; long-term market capitalization management and capital appreciation are the core. Professional institutions can provide full-cycle follow-up support, including secondary market capitalization management, liquidity optimization, private placements and M&A financing, investor relations maintenance, financial public relations and public opinion management, overseas brand communication, and family wealth asset allocation—a one-stop service that solves core issues such as post-IPO financing difficulties, unstable market capitalization, insufficient brand influence, and asset succession.

Domestic entities seeking direct listing in the US must meet stringent regulatory requirements. The vast majority of Chinese companies listing in the US establish red-chip or VIE (Variable Interest Entity) structures to compliantly facilitate the transfer of domestic assets overseas and comply with US listing rules. Professional service providers will tailor a compliant overseas structure based on the company's business attributes and equity structure to meet SEC review and domestic regulatory requirements.

Backdoor listings do indeed carry potential risks such as hidden debts of the shell company, legal disputes, and tax compliance issues. The key to mitigating these risks is conducting comprehensive due diligence, including financial due diligence (examining off-balance-sheet liabilities, third-party guarantees, and tax compliance risks), legal due diligence (verifying share pledges and major pending litigation), and operational due diligence (assessing the difficulty of related-party transactions and asset divestiture). A professional team comprehensively investigates risks to ensure transaction security.

Four key regulatory red lines to watch when acquiring a shell company in Hong Kong:

• Anti-takeover Rule (RTO): If assets are injected within 36 months of a change of control, and any one of the five indicators—assets, consideration, profits, revenue, and share capital—exceeds 100%, it will be deemed a backdoor listing and will require re-examination as a new listing; if the increase is between 25% and 100%, it will also require approval from the Stock Exchange of Hong Kong.
• Full tender offer: Acquires 30% or more of the voting rights, and must make a full tender offer to all shareholders unless a whitewash waiver is granted;
• Public shareholding requirement: 25% public shareholding must be maintained, otherwise trading will be suspended.
• Cash asset company rules: Shell companies that only hold cash and have no substantive business operations may be ordered to suspend trading or be delisted.

The core challenges for Chinese companies listing in the US lie in five key areas: establishing an overseas organizational structure, rectifying financial and legal compliance issues, responding to SEC inquiries, finalizing the listing and underwriting process, and ensuring liquidity in the secondary market. Many companies face obstacles to listing due to non-compliant structures, irregular financial practices, and a lack of overseas capital resources. Professional service providers can offer one-stop solutions for restructuring business models, establishing red-chip/VIE overseas organizational structures, and rectifying financial and tax compliance issues. Their professional teams can precisely handle SEC reviews, process inquiries, and collaborate with overseas securities firms and industry funds to complete underwriting and roadshows, effectively eliminating bottlenecks throughout the entire process.

Yes, once listed on the OTC market and meeting the listing requirements of the corresponding main board, companies can apply for a transfer to the main board. Several Chinese companies have already successfully done so.

• WETG (Yue Shang Group): Listed on OTCQB in 2020 and transferred to Nasdaq in 2022, with a peak market capitalization of US$10 billion;
• Yingxi Group (ATXG): Listed on OTCQB in 2016, transferred to Nasdaq in 2022, with a peak market capitalization of US$20 billion;
• Ta Kung Exchange (TKAT): Listed on the OTCBB in 2014 and successfully transferred to the NYSE in 2017.

The core differences between the two are as follows:

• Shell cost: Mainboard shell cost HKD 300-600 million, GEM shell cost HKD 100-200 million;
• Liquidity: The main board has better liquidity and is favored by institutional investors; the GEM board has low trading volume and requires additional compliance procedures to transfer to the main board.
• Suitable companies: The main board is suitable for large-scale, stable-profit companies; the GEM board is suitable for high-growth startups, with relatively lower review thresholds.

A Hong Kong backdoor listing refers to a capital operation that indirectly achieves a listing by acquiring control of a shell company with Hong Kong stock market listing status, injecting its own assets and business, and then listing itself. Compared to a Hong Kong IPO, its core advantages are:

• High time efficiency: The core operations of acquiring a shell company and injecting assets can be completed in 6-9 months, which is much shorter than the 1-2 year review period for an IPO;
• High certainty: Control is secured through a major shareholder agreement transfer, mitigating the risk of the IPO being rejected by the Hong Kong Stock Exchange;
• Brand empowerment: Quickly access international capital market platforms to enhance global brand reputation and financing convenience.

SPAC listing has five core advantages:

• More stable pricing: Valuation is determined through negotiations between the two parties, avoiding pricing risks caused by fluctuations in the traditional IPO market;
• Faster speed: Main board listing can usually be completed in 3-6 months, much shorter than the traditional 12-18 months of IPO;
• High certainty: Signing the merger agreement locks in the intention to go public, with minimal impact from market window periods;
• Resource empowerment: The initiators are mostly industry veterans, bringing connections, management experience and strategic endorsement;
• Flexible structure: Supports performance-based earn-out agreements, PIPE-backed private placements, and customizable equity structures.

SPAC, or Special Purpose Acquisition Company, also known as a blank check company, consists of cash and no actual business operations. It is a listing platform specifically set up to acquire high-quality companies. The target company can achieve listing and raise funds by merging with the SPAC.
The core difference between SPAC and reverse takeover is that reverse takeover involves purchasing an existing listed company shell, while SPAC involves creating the shell company first, raising funds, and then acquiring the target company to complete the listing. SPAC comes with its own raised funds and has lower hidden debt risk.

OTC backdoor listings can be divided into two main stages:
The first stage is to obtain OTC listing status: 5-10 business days after signing the contract, a high-quality shell company is identified; within 30 business days, control of the shell company is obtained and the restructuring and merger are completed; within 30 business days, the new board of directors is filed with the U.S. SEC.
The second stage is the consolidated financial statement transfer: within a period of 3 months to 2 years, the red chip/VIE structure is established and assets and performance are injected. After meeting the conditions, an application is made to transfer to the Nasdaq/NYSE main board.

The OTC market is divided into three tiers from high to low:

• OTCQX: The highest level, known as the "best market," is suitable for mature companies with high financial transparency and good governance standards that want to connect with international institutional investors.
• OTCQB: The middle tier is a growth platform for entrepreneurial companies, suitable for developing companies, especially startups and technology companies, whose financial situation has not yet met the requirements of OTCQX.
• OTCPink (Pink Sheets Marketplace): The lowest tier, suitable for all types of companies, especially early-stage businesses with weak financials and unaudited records, serving as a transitional bridge for emerging companies.

OTC backdoor listing, also known as RTO listing plan, refers to a capital operation method in which the company acquires the operating rights and equity of a US OTC Markets listed company to obtain listing status, and then transfers the original company's equity, assets, performance, etc. to the listed company to complete the listing and raise funds from domestic and foreign investors.

Currently, there are four mature and compliant paths to listing in the US, suitable for companies at different stages of development: First, a standard IPO, suitable for mature companies with stable revenue and sound qualifications; second, a SPAC (Special Purpose Acquisition) listing, suitable for high-growth companies that want to shorten the cycle and avoid the risks of traditional IPO review; third, a RTO (Reverse Takeover) listing, suitable for companies that urgently need to quickly list on the US stock market and build a capital platform; and fourth, an OTC listing followed by a transfer to the main board, suitable for startups to first list on the US stock market and then upgrade to Nasdaq or the NYSE main board, completing the capitalization layout in a step-by-step manner.

Going public can help companies solve three core pain points: First, it can solve the difficulty of financing by building a diversified and multi-level systematic financing system, obtaining strong financial trust endorsement, broadening financing channels and reducing financing costs; second, it can overcome the difficulty of development by exporting a profit system and integrated solutions for investment attraction and financing, which can help attract talent, promote industrial investment and technological innovation; and third, it can solve the difficulty of succession by creating a continuously iterating and upgrading competitive system and a global business system, so as to achieve long-term value enhancement and intergenerational succession of the enterprise.

There are no industry restrictions for listing in the US, as long as they comply with US SEC guidelines. Companies from a wide range of industries, including science and technology innovation, intelligent manufacturing, biomedicine, consumer goods, cultural tourism, modern agriculture, and digital technology, can all access the US stock market through compliant pathways.

The major U.S. stock market is divided into three main segments: the New York Stock Exchange (NYSE), NASDAQ, and the OTC (over-the-counter) market. OTC Markets are one of the world's largest over-the-counter stock trading markets, accounting for over 75% of the total daily trading volume of U.S. securities. More than half of the world's and China's top 500 companies trade here, making it an important transitional platform for companies seeking to list on the U.S. stock market's main board.

Yes. The US stock market does not have mandatory profitability requirements for companies. The core focus is on reviewing the company's business model, development potential, industry sector, and compliance system. Many high-quality technology, smart manufacturing, and new consumption companies have successfully listed on Nasdaq and the NYSE even before achieving profitability. We can create customized, lightweight listing guidance programs for SMEs and unprofitable companies. Through business iteration, compliance review, and value reshaping, we help companies meet US listing standards and smoothly connect with international capital markets.

The US stock market boasts core advantages such as relaxed entry barriers, controllable cycles, and high inclusivity, making it the preferred platform for Chinese companies going global. Unlike the strict profitability thresholds and queuing mechanisms of A-shares and Hong Kong stocks, the US stock market's registration-based system supports listings for companies with sound business models but no current profitability, allows for dual-class share structures, and fully protects the founding team's control. Furthermore, the US stock market offers ample capital, a mature valuation system, diverse financing channels, and a stable listing cycle, enabling companies to quickly complete capitalization upgrades and establish global brand and financing channels.