US Weekly IPO and SPAC Monitor: B2B Marketplace GigaCloud, Technology PaxMedica, Graphex and Innovative Eyewear

IPO interest has picked up with the stock market rally. August is traditional a slow time in the market with European holidays, and this year after the market crashing the IPO market has been in the doldrums but is showing some life. Next week we have GigaCloud Technology (GCT) planning to raise $28 million at a $447 million market cap. Phase 2 Biotech PaxMedica (PXMD) plans to raise $8 million at an $80 million market cap. Innovative Eyewear (LUCY) raised $7.4 million. Graphex (GRFX) plans to raise $8 million also.

GigaCloud Warehouse

Last week four small deals priced, Electric boat developer Forza X1 FRZA, Malaysian e-payment app Treasure Global (TGL)California coffee roaster Reborn Coffee (REBN) and short-term rental provider CorpHousing Group (CHG)

GigaCloud Technology (GCT) 

GigaCloud Technology (GCT) plans to raise $28 million at a $447 million market cap. The company offers an online B2B marketplace for large parcel merchandise, including furniture, home appliances, and fitness equipment. Its global marketplace connects manufacturers, primarily in Asia, with resellers, primarily in the US, Asia, and Europe. Although Revenue grew 19% in 1Q22, the company has since been confronted by several supply chain issues such as increasing fuel costs and shipping delays due to COVID-19 lockdowns in Shanghai.

  • Underwriters Aegis Capital Corp.
  • Headquarters Hong Kong, China
  • Founded 2006
  • Employees 694
  • Website www.gigacloudtech.com

PaxMedica (PXMD)

Phase 2 Biotech PaxMedica (PXMD) plans to raise $8 million at an $80 million market cap. Initially filing for an IPO in July 2020, the company has since cut its original deal size in half as it seeks to develop therapies for neurodevelopmental disorders. In February 2021, PaxMedica announced positive topline data from its Phase 2 dose-ranging trial for the treatment of the core symptoms of autism spectrum disorder (ASD).

  • Underwriters Craft Capital Management, R.F. Lafferty & Co.
  • Headquarters Woodcliff Lake, NJ
  • Founded 2018
  • Employees 3
  • Website www.paxmedica.com

Graphex (GRFX)

Graphex Group a manufactures graphene products for lithium-ion batteries in China, may price this week as well. It is on file to raise $8 million by offering 3.2 million shares at a price of $2 to $3 in its uplisting to the NYSE American.  The company is currently listed on the Hong Kong Exchange (6128) and the OTCQX market (GRFXY).

The Hong Kong-based company plans to raise $8 million by offering 3.2 million ADSs at a price range of $2 to $3. At the midpoint of the proposed range, Graphex Group would command a market value of $76 million.

Graphex manufactures natural spherical graphite and specialized graphite products that are used primarily in lithium-ion batteries, typically for electric vehicles and clean energy storage solutions. The company’s graphene products operations are based in the PRC and strategically located near a supply source of high-quality natural graphite. Graphex currently has approximately 30 customers in the PRC, primarily manufacturers of automotive batteries, conductive agents, refractory materials for the steel industry, and heat sink materials for precision electronics. The company also operates two other segments: its landscape architecture and design business and its catering business.

Graphex Group was founded in 1981 and booked $50 million in revenue for the 12 months ended December 31, 2021. It plans to list on the NYSE American under the symbol GRFX. EF Hutton is the sole bookrunner on the deal.

Underwriters EF Hutton
Headquarters Hong Kong, China
Founded 1981
Employees 480
Website www.graphexgroup.com

Innovative Eyewear

Innovative Eyewear (LUCY) raised $7.4 million by offering 1 million units at $7.50, the low end of the upwardly revised range of $7.50 to $9.50.; it begins trading on the Nasdaq on Monday. The company sells Bluetooth connected eyewear under the brand Lucyd, with $1 million in trailing sales. The company offered 0.1 million more units than anticipated. It last revised terms in July, having previously filed to offer 1.5 million units at $5.50 to $7.50. Each unit contains one share of common stock and two warrants, exercisable at the IPO price.

Innovative Eyewear develops and sells a suite of tech-enabled eyeglasses and sunglasses, offering both prescription eyewear and sun protection. In January 2021, the company launched its first commercial product, Lucyd Lyte, which enables the wearer to listen to music, take and make calls, and use voice assistants to perform many common smartphone tasks hands-free.

Because the company offered units with warrants attached, Innovative Eyewear will be excluded from Renaissance Capital’s 2022 IPO stats.

Innovative Eyewear plans to list on the Nasdaq under the symbol LUCY. Maxim Group LLC acted as sole bookrunner on the deal.

Underwriters Maxim Group LLC
Headquarters North Miami, FL
Founded 2019
Employees 9
Website Lucyd® Bluetooth Smart Glasses – Smart, Audio Eyewear

We may see other small deals manage to price offerings as well, such as Onfolio (ONFO), bioAffinity Technologies (BIAF), and Loop Media (LPTV).

IPO Week Ahead Calendar

IPO Lockup Period Expirations

Monday – August 15

The IPO lockup periods expire on Sunshine Biopharma (SBFM) and Vivakor (VIVK). Both stocks are down more than 60% from their IPO pricing level.


US IPO Weekly Recap: 4 IPO Week

Four small deals priced this past week, joined by two SPACs. Two small IPOs and one SPAC submitted initial filings.

Treasure Global (TGL)

Malaysian e-payment app Treasure Global (TGL) priced at the low end by offering 2 million shares at $4, the low end of the range of $4 to $6 to raise $8 million at a $65 million market cap. The company’s ZCITY App offers consumers and merchants instant rebates and affiliate cashback programs, along with an e-payment solution with rebates in both e-commerce (online) and physical retailers/merchant (offline) settings. The app launched in Malaysia in June 2020, and as of July 31, 2022, it had over 2.0 million registered users and nearly 2,000 registered merchants.

The company offered 0.5 million more shares than anticipated. It originally planned to offer 3 million shares at $4 to $6 before cutting the share offering to 1.2 million in July, then increasing it to 1.5 million earlier this month.

Treasure Global listed on the Nasdaq under the symbol TGL. EF Hutton acted as sole bookrunner on the deal.

Treasure Global soared 346% on its first day but deflated in the aftermarket, still finishing up 110%.

Forza X1 (FRZA)

Electric boat developer Forza X1 (FRZA) by offering 3 million shares at $5, raised $15 million at a $50 million market cap. Spun out of Twin Vee PowerCats (VEEE), the company aims to manufacture and sell affordable electric boats for recreational sport use. While it has only worked on prototypes to date, Forza X1 expects to start producing and selling their initial FX1 dual console and FX1 center console models in the 2Q23.

Forza X1 plans to list on the Nasdaq August 12, 2022 under the symbol FRZA. ThinkEquity acted as sole bookrunner on the deal.

Forza X1 finished up 50%.

Reborn Coffee (REBN)

California coffee roaster Reborn Coffee (REBN) upsized to raise $7 million at a $65 million market cap. The company serves specialty-roasted coffee at retail locations, kiosks, and cafes, as well as at its own company-owned stores. While Reborn is highly unprofitable and competes with significantly larger players, average unit volume at its retail locations increased 41% in 2021.

Reborn Coffee finished down 4%.

CorpHousing Group (CHG)

Short-term rental provider CorpHousing Group (CHG) downsized and priced at the low end to raise $14 million at a $107 million market cap. Operating under its consumer brands, SoBeNY and LuxUrban, the company has 619 accommodation units in seven cities in the US. Profitable and fast-growing, it plans to launch international operations in 2022, starting with London or Paris.

CorpHousing finished down 8%.

SPACS

Two SPACs also priced during the week: Embrace Change Acquisition (EMCGU) raised $65 million to target tech and consumer, and growth-focused Hainan Manaslu Acquisition (HMACU) raised $60 million.

IPO Weekly Recap

Warrants

Over the last month, a rising number of small deals have opted to offer warrants in their IPOs, either at the time of the initial filing or in a later amendment. In the context of an IPO, warrants give investors the right to purchase a new issuer’s stock at a specific price within a set time frame. That price is usually equal to or slightly greater than the offer price, and the time frame is often within five years after the IPO.

Warrants allow new issuers to both sweeten the pot for investors and provide an additional source of capital for themselves.

While offering warrants may help small deals get done in challenging conditions, it does not provide immunity from poor trading. From 2021 to date, issuers that have gone public after adding warrants are mostly underwater, averaging a -54% return from IPO.

Recent filers that have opted to offer warrants are all micro-caps and span a variety of industries. The group includes both companies filing for fresh listings, as well as those hoping to uplist from the OTC. Non-listed filers feature ramen restaurant chain Yoshiharu Global, Canadian psychotropics company Lucy Scientific Discovery, aquaculture company The tru Shrimp Companies, short-term rental provider CorpHousing Group, and agtech developer Opti-Harvest.

Source: Completely warranted: Small IPOs are enhancing their deals with warrants – Renaissance Capital

From The TradersCommunity Research Desk