Heading into September IPOs are still small in number, though August delivered the most IPO issues for the year with 12. In a shortened Labor Day week two small deals are scheduled to price. Bio- RFID sensor technology company, OTC-listed Know Labs (KNW) plans to raise $6 million at a $123 million market cap. A holdover from last week, non-invasive neural input technology company Wearable Devices (WLDS) plans to raise $22 million at a $99 million market cap.
Last week we had Lung cancer diagnostics developer bioAffinity Technologies (BIAF), Hemp cigarette manufacturer Hempacco (HPCO) and Biotech Shuttle Pharmaceuticals (SHPH). The highlight was the uplisting from the OTC, Chinese garment maker Addentax Group (ATXG) which on its first day of trading soared more than 13,000% in the largest first-day pop ever recorded. The stock gave back about 99% in the aftermarket at one point. The risk in IPO trading was there for all to see.
US IPO Week Ahead
Know Labs (KNW)
OTC-listed Know Labs (KNW) plans to raise $6 million at a $123 million market cap. Know Labs is focused on the development and commercialization of proprietary biosensor technologies. This is paired with their artificial intelligence, or AI, deep learning platform, capable of uniquely identifying and measuring almost any material or analyte using electromagnetic energy to detect, record, identify and measure the unique “signature” of said materials or analytes. They call these “Bio-RFID™” technology platform when pertaining to radio and microwave spectroscopy; and “ChromaID” technology platform when pertaining to optical spectroscopy.
Our journey begins with a focus on the nearly 500 million people living with Type 1 and Type 2 diabetes, and another 1.5 billion people suffering from pre-diabetes.
- Underwriters Boustead Securities
- Headquarters Seattle, WA
- Founded 1998
- Employees 15
- Website Home | Know Labs | Non-invasive Medical Diagnostic Technology
Wearable Devices (WLDS)
Wearable Devices (WLDS), which is developing non-invasive neural input technology for consumer electronics, plans to raise $22 million at a $99 million market cap
Since our technology was introduced to the market in 2014, we have been working with both B2B and B2C customers as part of our push-pull strategy. We are now in the transition phase from research and development to commercialization of our technology into B2B products. At the same time, we are in the final stage of manufacturing our first B2C consumer product, the “Mudra Band” wristband, an aftermarket accessory band for the Apple Watch which allows touchless operation and control of the watch.
- Underwriters Aegis Capital Corp
- Headquarters Yokne’am Illit, Israel
- Founded 2014
- Employees 24
- Website Home | Wearabledevices
US IPO Weekly Recap: 6 IPO Week
Four small issuers began trading this past week, although only two met Renaissance IPO tracking criteria. Just two IPOs and one SPAC submitted initial filings. From the pipeline, digital ad firm Aleph Group (ALEF) and car sharing platform Turo (TURO), both of which are on file for estimated $300 million IPOs, provided updates during the week and disclosed financials for the 1H22. Meanwhile, yogurt brand Chobani (CHO) withdrew its estimated $1.5 billion IPO.
Addentax Group (ATXG)
Addentax Group (ATXG), a garment manufacturer and logistics service provider based in China debuted on the Nasdaq at $5.00 Wednesday for a market cap of $158 million. On the first day of trading the company closed valued at $20.8 billion, having soared 13,031% from the offer price in its debut. In afterhours ATXG traded as high as $1147. That was the highest first-day pop Renaissance Capital has recorded in their 30+ year history.
The company was previously listed on the OCTQB and saw virtually no trading. Addentax Group raised $25 million in its Nasdaq uplisting by offering 5.0 million shares at $5.00 per share in an offering underwritten by New Jersey-based Network 1 Financial Securities.
- Underwriters Network 1 Financial Securities
- Headquarters Shenzhen, China
- Founded 2014
- Employees 126
- Website Corporate Profile- 盈喜集团股份有限公司|ATXG (addentax.com)
Addentax Group finished up 91.8% ($9.59) at the end of the week
Hemp cigarette manufacturer Hempacco (HPCO) raised $6 million at a $138 million market cap. The company’s products are sold in over 200 retail locations in San Diego, and it plans to refurbish a fleet of roughly 600 kiosk vending machines to expand distribution. Hempacco has a limited operating history and expects to remain unprofitable in the near term.
Went through a reverse acquisition in consolidating with Green Globe International, Inc. (OTC PINK: GGII).
We utilize a proprietary, patented spraying technology for terpene infusion and patent-pending flavored filter infusion technology to manufacture hemp and herb-based smokable alternatives. We have conducted research and development in the smokables space and are engaged in the manufacturing and sale of smokable hemp and herb products, including The Real Stuff™ Hemp Smokables.
Hempacco finished down 6% at the end of the week
- Underwriters Boustead Securities
- Headquarters San Diego, CA
- Founded 2019
- Employees 15
- Website Hempacco, Co. Inc. (hempaccoinc.com)
bioAffinity Technologies (BIAF)
Lung cancer diagnostics developer bioAffinity Technologies (BIAF) plans to raised $8 million at a $54 million market cap with the offer priced at $6.13. .
Our Company develops proprietary noninvasive diagnostic tests and cancer therapeutics using technology that preferentially targets cancer cells and cell populations indicative of a diseased state. Research and optimization of our platform technologies are conducted in our laboratories at The University of Texas at San Antonio. We are developing our platform technologies so that, in the future, they will be able to detect and monitor diseases of the lung and other cancers and treat many cancers. Our first diagnostic test, CyPath® Lung, addresses the need for early detection of lung cancer, the leading cause of cancer-related deaths.
bioAffinity finished up 15.01% at the end of the week
- Underwriters: WallachBeth Capital and Craft Capital Management
- Headquarters San Antonio, TX
- Founded 2014
- Employees 14
- Website Home – BioAffinity Technologies
Shuttle Pharmaceuticals (SHPH)
Biotech Shuttle Pharmaceuticals (SHPH) raised $10 million at a $57 million market cap, and lung cancer diagnostics developer.
The Company has developed technology that operates in three distinct areas related to the treatment of cancer with radiation therapy:
- Sensitization of growing cancer cells, rendering them susceptible to the effects of radiation therapy,
- Sensitization of hypoxic cells in tumors that resist radiation therapy, and
- Activation of the DNA damage response pathway to kill cancer cells and protect normal cells located near cancers, this technology effects the immune response and has the potential to integrate with checkpoint inhibitors and immune therapies.
Shuttle Pharmaceuticals finished up 83.27% at the end of the week
- Underwriters: Boustead Securities & Valuable Capital
- Headquarters Rockville, MD
- Founded 2012
- Employees 5
- Website Home | Shuttle Pharma
“The IPO market is on pace for its worst year in decades, leaving fledgling companies with few options but to burn through cash while they wait for the stock market to calm. Late last year, hundreds of companies were in the final stages of preparing to go public, encouraged by the best 18 months ever for U.S. initial public offerings. Then a combination of factors—sky-high inflation, rising interest rates and Russia’s invasion of Ukraine—sent shock waves through the stock market. The IPO pipeline froze. So far this year, traditional IPOs have raised only $5.1 billion all told, Dealogic data show. Typically at this point in the year, traditional IPOs have raised around $33 billion… Last year at this point, these offerings raised more than $100 billion.”August 22 – Wall Street Journal (By Corrie Driebusch)
IPO Lockup Period Expirations
Warrants to Entice New Issuance
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.
From The TradersCommunity Research Desk