Pre-IPO Pedia | Chinese oat products maker YanGuFang will be listed on March 28

The Company expects to receive aggregate gross proceeds of US$8.0 million from this Offering, before deducting underwriting discounts and other related expenses.

EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”), is acting as sole book-running manager for the Offering.

Founded in 2012,Shanghai, China-based YanGuFang International Group (YGF) was founded to grow oats in Inner Mongolia and to produce finished oat-based products for consumer.

Management is headed by Chairman and CEO, Junguo He, who has been with the firm since inception in August 2012 and was previously founder of YanGuFang Agroeco Tech.

The company's primary offerings include:oat series products, including oat germ crushed grain, oat flakes, oat flour and oat bran, and oat nutrition and health series products, including oat peptide series, dietary fiber powder, oat cookies, oil series, oat hand cream and soap, and oat toothpaste.

The Company has two production facilities in Inner Mongolia, with a total of eight automated production lines, five of which are in operation and the remaining three are being installedand tested.

The company's current production capacity is about 13,700 tons/year and is expected to reach about 33,300 tons/year when the remaining 8 production lines are all in operation.

Repeat purchase rate is approximately 56.2 and 57.6, for the fiscal year ended June 302022 and 2021.

As of December 31, 2022, APP users were approximately 365,289 general users and 1,401 advanced users.

The Company also has both domestic and international distributors, with 1,787 distributors in China as of December 31, 2022, of which 1,695 are authorized distributors.

For the fiscal years 2021 and 2022 ended June 30, the company reported revenues of $29.8 million and $36.1 million, and net income of $10.5 million and $5.7 million, respectively.

For fiscal years 2022 to 2022, revenues increased 23.8% and 20.9% year-over-year.

According to a market research report by Intelligence Research Group (IRG), the global oats market size y has been raised from $5.51 billion to $7.12 billion during 2018-2020, falling to $6.22 billion in 2021.

In addition, the IRG expects the market size of oats to reach $ 8.76 billion by 2027.

Prior to Offering,Junguo He,Chairman of the Board of Directors and CEO,held 39.53%of the shares;Zhu Sun, CTO and Director, held 19.48%; and Ya Zhang, COO, held 10.5%.

YanGuFang plan to use the net proceeds from this offering as follows:

• approximately 30% of the net proceeds from this offering in the construction of additional production facilities, purchase of new equipment and upgrades of existing equipment;

•approximately 10% of the net proceeds from this offering for the R&D of new products and technologies, upgrades of existing products and technologies, new hires of R&D staff;

•approximately 12% of the net proceeds from this offering for global business expansion, primarily to North America, South East Asia and Japan;

•approximately 20% of the net proceeds from this offering for marketing and brands promotion;

•approximately 28% of the net proceeds from this offering for working capital and other general corporate purposes.