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Law360 (March 19, 2020, 4:57 PM EDT ) Chinese mobile devices maker UTime Ltd. filed a $22 million initial public offering in the U.S., advised by Ellenoff Grossman & Schole LLP and underwriters counsel K&L Gates LLP, becoming one of few companies to file IPOs recently as the coronavirus outbreak escalates.
Shenzhen-based UTime's preliminary filing, made late Wednesday, does not indicate how many shares it plans to sell or at what range, figures that are normally released as the IPO process moves forward. UTime has made its plans public amid a U.S. IPO market that has gone dormant while the coronavirus pandemic upends daily life.
Only one other operating company, biotechnology firm Keros Therapeutics Inc., has filed an IPO this week, according to the New York Stock Exchange and Nasdaq websites. No operating companies this week have launched roadshows, which is the final stage before pricing.
UTime makes and sells mobile phones and accessories, mostly to customers in South America, Asia and Africa. The company said it may spend IPO proceeds on expanding presence in India and other emerging markets, plus research and development to launch new products.
"We are committed to providing cost-effective mobile devices to consumers globally and to helping low-income individuals from established markets, including the United States, and emerging markets, including India and countries in South Asia and Africa, have better access to updated mobile technology," UTime said in a registration statement filed with the U.S. Securities and Exchange Commission.
Like many public companies filing regulatory disclosures, UTime said the coronavirus outbreak poses risks to its business. The company operates a factory in Guizhou, which was recently ordered by China's government to temporarily close before reopening on Feb. 14. UTime said it hopes "all operations will return to normal as soon as possible."
"We expect that the coronavirus could have a negative impact on our sales until production is fully running as normal," UTime told the SEC. "Furthermore, our customers in China and elsewhere may reduce their future purchases from us if they are not able to complete the manufacture of their products due to the shortage of components from other suppliers."
UTime disclosed additional risks, noting that nearly three-quarters of its 2019 revenue came from three customers. The company has never turned a profit, losing $1.8 million on $35.4 million in revenue for the year ended March 31, 2019, according to its registration statement.
During this quiet market, only two operating companies have priced IPOs in March and none since last week. They include Canadian waste hauler GFL Environmental Inc., which raised $1.4 billion on March 11, and biotechnology firm Imara Inc., which raised $75 million on March 11.
Under securities law, companies can launch an IPO roadshow 15 days after publicly filing their registration statement. A roadshow is a marketing event in which companies travel the country and pitch their offering to prospective investors, before settling on a final IPO price.
UTime plans to list on the Nasdaq under the stock symbol UTME. ViewTrade Securities Inc is the sole underwriter for the offering.
An Ellenoff Grossman team led by partners Barry Grossman and Jessica Yuan.
The underwriter is represented by a K&L team led by partners Clayton Parker, Matthew Ogurick, and associate Hillary O'Rourke.
--Editing by Alanna Weissman.
For a reprint of this article, please contact reprints@law360.com.
