US Weekly IPO and SPAC Monitor: Blockchain Group Intchains and Hong Kong’s Prestige Wealth

Heading into Christmas two IPOs are scheduled to go public. China-based “Xihe” Platform provider Intchains Group (ICG) plans to raise $29 million at a $499 million market cap. Hong Kong based asset manager Prestige Wealth (PWM), plans to raise $15 million at a $63 million market cap. In the past week just two SPACs AlphaVest Acquisition (ATMVU) and Horizon Space Acquisition I (HSPOU) raised $60 million each and nano-cap biotech Lipella Pharmaceuticals (LIPO) priced. There is a chance, but unlikely E-bike maker SONDORS (SODR), BullFrog AI Holdings (BFAI) and Nano-cap ParaZero Technologies (PRZO) may also price.

Intchains Group

In the past week two blank check IPOs, SPACs AlphaVest Acquisition (ATMVU) and Horizon Space Acquisition I (HSPOU) each raised $60 million. Nano-cap biotech Lipella Pharmaceuticals (LIPO) priced. Another nano-cap, BullFrog AI Holdings (BFRG) again delayed its $8 million IPO. No new IPOs joined the pipeline. AlphaVest plans to target businesses in Asia, focusing on those with compelling economics and significant assets, among other characteristics. Led by a Chinese PE investor, Horizon plans to target emerging growth companies with long-term revenue visibility and defensible market positions.

US IPO Week Ahead

Issuers not included is because the company offered units with warrants attached and priced at a market cap less than $50 million, they will be excluded from Renaissance Capital’s 2022 IPO stats.

Intchains Group (ICG)

China-based Intchains Group (ICG) plans to raise $29 million at a $499 million market cap. Utilizing its proprietary “Xihe” Platform, Intchains provides high-performance ASIC chips, ancillary software, and hardware for blockchain applications. It also claims that its fabless business model enables specialization in the front-end and back-end of IC design. It will be interesting if this prices given the FTX fraud, despite a turbulent cryptocurrency market, revenue increased by 33% in the 9mo22 due to additional sales volume from its ASIC chips.

Prestige Wealth (PWM)

Prestige Wealth (PWM) is a Hong Kong-based asset manager that plans to raise $15 million at a $63 million market cap. The firm provides financial services to high net worth and ultra-high net worth individuals in Asia, the company received almost all of its revenue in FY21 from its operating subsidiary PAI, which acts as an investment advisor and fund manager. PAI distributes of insurance products and also provides referrals for trust lawyers, tax accounting, and education planning. Prestige Wealth is subject to high customer concentration risk but continues to increase its client base through referrals.

Possible Pricing of IPOs from Past Weeks

SONDORS (SODR)

E-bike maker SONDORS (SODR) plans to raise $23 million at a $146 million market cap. The company makes premium electric bikes through a collection of kits, and through a partnership agreement, offers its entry level model to Costco customers. Unprofitable but growing, SONDORS has delivered over 63,000 e-bikes in 72 countries since 2015.

Additional e-bike models are sold direct-to-consumer, enabling the end customer to customize its e-bike across a portfolio of products, ranging from our full-suspension, mid-drive mountain bikes, to MadMods offerings, which feature wide tires and customizable style kits.

ParaZero Technologies

ParaZero Technologies, which is developing autonomous parachute safety systems for commercial drones, plans to raise $8 million by offering 1.6 million units at a price range of $4.25 to $6.25, with each unit consisting of one share of common stock and two warrants, exercisable at $5 (assuming pricing at the midpoint). The company had previously filed to offer 5.8 million shares (70% secondary) at a range of $4 to $6.

The company is based in Kiryat Ono, Israel and was founded in 2013 and plans to list on the Nasdaq under the symbol PRZO. Its patented technology, the SafeAir system, is designed to protect hardware, people, and payload in the event of an in-flight failure.

BullFrog AI Holdings (BFAI)

BullFrog AI Holdings (BFAI) plans to raise $8 million at a $34 million market cap. The pre-revenue company is developing an analytical AI/ML platform called bfLEAP to “transform the field of precision medicine. Our mission is to apply predictive analytics to all stages of drug development to improve the lives of every patient.”

Bullfrog AI

“BullFrog AI consists of an exceptional team of life science industry leaders, AI technologists, scientists, physicians and advisors determined to revolutionize drug development. And through our partnership with one of the most prestigious research institutions in the world, Johns Hopkins, we are at the forefront of AI technology development.”

  • Underwriters: Roth Capital, The Benchmark Company
  • Headquarters: Gaithersburg, MD
  • Founded: 2017
  • Employees 4
  • Website: Bullfrog AI

Beamr (BMR)

Beamr (BMR), an Israeli video encoding and image optimization software provider, plans to raise $15 million at a $73 million market cap. The company currently licenses three core video and image compression and counts streaming platforms and Hollywood studios among its clients. At the heart of their patented optimization technology is the proprietary Beamr Quality Measure, or BQM, that is highly correlated with the human visual system. BQM is integrated into their Content Adaptive Bitrate, or CABR, system, which maximizes quality and remove visual redundancies resulting in a smaller file size.

Beamr

However, Beamr is small and unprofitable, and saw revenue decline in the 1H22.

  • Underwriters: ThinkEquity
  • Headquarters Herzeliya, Israel
  • Founded 2009
  • Employees 28
  • Website: www.beamr.com

Alopexx (ALPX)

Alopexx (ALPX) plans to raise $15 million at a $39 million market cap. The company is a clinical stage biotechnology company developing novel immune therapeutics for the prevention, treatment and mitigation of bacterial, fungal, and parasitic infections that express the antigenic target poly N-acetyl glucosamine (PNAG). That target has been found on an expanding number of pathogens. In a first-in-man trial, their vaccine candidate, AV0328, has been shown to be well tolerated with no serious adverse events observed.

  • Underwriters: ThinkEquity
  • Headquarters Cambridge, MA
  • Founded 2006
  • Employees 3
  • Website: www.alopexx.com

Lead Real Estate (LRE)

Japanese luxury real estate developer Lead Real Estate (LRE) plans to raise $27 million at a $196 million market cap. Growing developer of luxury residential properties, including single-family homes and condominiums, across Tokyo and Kanagawa prefecture. In addition, they operate hotels in Tokyo and lease apartment building units to individual customers in Japan and Dallas, Texas. Primarily generate revenue from developing and selling single-family homes and condominiums. Since inception in 2001, have delivered more than 1,000 single-family homes and 25 condominiums.

YanGuFang Group (JUNS)

YanGuFang Group (YGF), a Chinese producer of oat and grain products, plans to raise $30 million at a $210 million market cap. Note that YanGuFang Group is a holding company incorporated as an exempted company on May 28, 2020 under the laws of the Cayman Islands. As a holding company with no material operations of its own, it conducts substantially all of its operations through its subsidiary and the VIEs in China. YGF is primarily engaged in the production, research and development, and sales of oat and grain products through our direct salesforce and distribution network.

Jupiter Neurosciences (JUNS)

Jupiter Neurosciences (JUNS) plans to raise $15 million at a $62 million market cap. Jupiter’s sole candidate, JOTROL, is being developed for various neuro and rare disease indications. JOTROL completed a Phase 1 safety and tolerability trial in March 2021 and is expected to commence Phase 2 trials in the 4Q22.

Jupiter Neurosciences

The Company has developed a unique resveratrol platform product primarily targeting treatment of neuro-inflammation. The product candidate, called JOTROL™, has many potential indications of use for rare diseases, which of we primarily are targeting Mucopolysaccharidoses Type 1, Friedreich’s Ataxia, and MELAS and with ALS in an earlier development stage. In the larger disease areas, we are primarily targeting Mild Cognitive Impairment/early Alzheimer’s disease with an early development program in TBI/concussions.

Alopexx (ALPX)

Infectious disease biotech Alopexx (ALPX) plans to raise $15 million. A clinical stage biotechnology company developing novel immune therapeutics for the prevention, treatment and mitigation of bacterial, fungal, and parasitic infections that express the antigenic target poly N-acetyl glucosamine (PNAG). That target has been found on an expanding number of pathogens.

In a first-in-man trial vaccine candidate, AV0328, has been shown to be well tolerated with no serious adverse events observed. It was noted to induce protective antibodies against all PNAG-expressing pathogens tested. Similarly, fully human monoclonal antibody, F598, that also targets PNAG, has been shown to be well tolerated and no serious adverse events were noted in phase 1 and pilot phase 2 trials.

Seek to establish F598 as the standard of care for preventing and ameliorating gram-negative and gram-positive bacterial infections along with fungal infections by organisms that express PNAG in patients admitted to intensive care units (ICU).

  • Underwriters: ThinkEquity
  • Headquarters Cambridge, MA
  • Founded 2006
  • Employees 3
  • Website: Alopexx (ALPX)

Lichen China (LICN) (Possible was expected last week)

China-based Lichen China (LICN) is expected to raise $25 million on Friday and begin trading on Monday, the company is a leading financial and taxation service provider in China in terms of revenue, according to the industry report of Frost & Sullivan. Have operated as a dedicated financial and taxation solution service specialist in China for over 17 years. Operate in the PRC under the “Lichen” brand. New business line of software and maintenance services in 2019 to expand software product offerings to enterprise customers, universities, colleges and educational institutes and have started to generate revenue from provision of such services since then.


US IPO Weekly Recap: Two SPAC, One IPO Week

n the past week no new IPOs joined the pipeline. Two blank check IPOs, SPACs AlphaVest Acquisition (ATMVU) and Horizon Space Acquisition I (HSPOU) each raised $60 million. Nano-cap biotech Lipella Pharmaceuticals (LIPO) priced. AlphaVest plans to target businesses in Asia, focusing on those with compelling economics and significant assets, among other characteristics. Led by a Chinese PE investor, Horizon plans to target emerging growth companies with long-term revenue visibility and defensible market positions.

Lipella Pharmaceuticals (LIPO)

Clinical-stage biotechnology company Lipella Pharmaceuticals (LIPO) IPO opened for trading at $7.02 after pricing 1,217,391 shares of its common stock at a price to the public of $5.75 per share. Spartan Capital Securities, LLC acted as sole book-running manager for the offering. The companyfocused on developing new drugs by reformulating the active agents in existing generic drugs and optimizing these reformulations for new applications.

Have not yet commercialized any products, and do not expect to generate revenue from sales of any product candidates for several years. Initial indication currently addressing (via development of their product candidate designated as LP-10) is “hemorrhagic cystitis” (“HC”), which is chronic, uncontrolled urinary blood loss that results from certain chemotherapies (such as alkylating agents) or pelvic radiation therapy (also called “radiation cystitis”).

LIPO finished its first week down 33%.

AlphaVest Acquisition (ATMVU) 

SPAC AlphaVest Acquisition (ATMVU) plans to raise $60 million at an $80 million market cap and target businesses in Asia. They are a blank check company that intends to initially focus on target businesses in Asia. They said they we will not consummate our initial business combination with an entity or business with China operations consolidated through a variable interest entity (“VIE”) structure.

  • Underwriters: EarlyBirdCapital, Revere Securities
  • Headquarters: New York, NY
  • Founded: 2022
  • Employees 2
  • Website:

Filings Monitor

Three Chinese companies joined the US IPO pipeline. Online education company QuantaSing Group (QSG) and AI tech developer Xiao-I (XI) both filed to raise $60 million, and battery-swapping station developer U Power (UCAR) filed to raise $25 million.

IPO Week Recap

Dealogic Reports show around 87% of companies that went public in the U.S. last year are trading below their offering prices, down more than 49% on average as of last Friday’s close. The S&P 500 is down 23% this year, while the tech-heavy Nasdaq Composite has fallen 31%.


“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)


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.

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

From The TradersCommunity Research Desk