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The Offer
Company Overview
ELGP, a high-touch, best-in-class moving, and storage firm, was established in 2013 to provide domestic concierge services and international relocation solutions for private, public, and business clients in the US and Canada. Seven metro areas on the U.S. east coast are the current focus of ELGP. The company's present operating base in Brooklyn, New York, largely serves the seven metro regions that it now services. With a growing fleet of trucks and competent relocation, the staff made up of 27 full-time and 5 part-time personnel, ELGP now serves these markets. Disassembly, packing, unpacking, re-setup, and short-term storage are all included in ELGP's full moving services.
Key Highlights
Primary Offering: 1,333,334 Common Units, each of which consists of two Warrants, each of which is exercisable for the purchase of one share of Class A Common Stock. Each Pre-funded Unit will have two Warrants and a Pre-funded Warrant with an exercise price of USD 0.001 to buy one share of Class A common stock. Each Pre-funded Unit costs USD 0.001 less than the price per Common Unit being offered to the public in this offering as the purchase price. The Pre-funded Warrants will become instantly exercisable and may be used at any moment up until they are all fully utilized. The Warrants contained inside the Common Units are immediately exercisable, have an exercise price equal to 100% of the public offering price of one Common Unit, and have a five-year expiration period.
Use of proceeds:
ELGP estimates that the net proceeds to the company from this offering will be approximately USD 7,103,382 (without over-allotment), or approximately USD 8,253,721 if the Underwriter exercises its over-allotment option in full, assuming an initial public offering price of USD 6.25 per Common Unit (the midpoint of the estimated price range). If any Pre-funded Warrants are exercised, but none of the Warrants are exercised, and if the Underwriter does not exercise the over-allotment option, ELGP plans to use the net proceeds of this offering as follows: (i) roughly 28%, or USD 2 million, for general corporate purposes, including working capital; (ii) roughly 21%, or USD 1.5 million, set aside for expanding current service lines into new states and extending cross-border services into Canada; (iii) roughly 33%, or USD 2.3 million, set aside for entering, developing, and enhancing the storage facility segment, which may include potential acquisitions of existing facilities; and (iv) approximately 3%, or USD 200,000, set aside for repayment of non-related party indebtedness. (v) around 15%, or USD 1.1 million, will go toward capital expenses for expanding our fleet of vehicles and another tooling.
Dividend policy: All dividends to holders of common stock will be declared and paid at the Board of Directors' discretion and will be based on a variety of factors, including the company's financial situation, earnings, compliance with applicable laws, and any debt agreements to which it is then a party, as well as other factors that the Board of Directors deems relevant.
Industry and competitive analysis
Financial Highlights (Expressed in USD):
Key Management Highlights
Risk Associated (High)
Investment in the IPO of “ELGP” is exposed to a variety of risks such as:
Conclusion
ELGP’s performance was moderate in the nine months ended September 30, 2022, with revenue improved by just 0.67% and net income witnessed a decline of ~83%. The sharp decline in net income was primarily because of 15.9% surge in cost of revenue and 58% jump in operating expenses. Further, the company operates in a highly competitive and fragmented environment, which exposes them to competitive pressures pertaining to pricing, capacity, and service.
Hence, given the financial performance of the company for the nine months ending September 30, 2022, industry analysis, use of proceeds, and associated risks “Elate Group Inc (ELGP)” IPO seems “Neutral" at the IPO price.
Past performance is neither an indicator nor a guarantee of future performance.
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