December finally had it first IPO, the much-delayed micro-cap diamond maker Adamas One (JEWL) priced at the low end. Coming into year-end there may be small deals on the calendar, but larger IPO will be for next year. E-bike maker SONDORS (SODR) may price in the week ahead, planning to raise $23 million at a $146 million market cap. There is talk, after pushing back the last three weeks BullFrog AI Holdings (BFAI) will price its IPO to raise $8 million. Nano-cap ParaZero Technologies (PRZO) may also price, it plans to to raise $8 million at a $30 million market cap.
Micro-cap diamond maker Adamas One (JEWL) after some delay completed the first offering of the December IPO market. Standing out this week was the announcement of the filing of the largest IPO from a Vietnamese company since 2018, and the first US IPO from a Vietnam-based company. EV spinoffj Vingroup’s Vinfast Auto (VFS) filed for an IPO we estimate which hopes to raise more than $1 billion. Two other micro-caps and a SPAC also submitted initial filings.
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.
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. 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.
Unprofitable but growing, SONDORS has delivered over 63,000 e-bikes in 72 countries since 2015.
- Underwriters: Lake Street Capital Markets, Joseph Gunnar
- Headquarters: Malibu, CA
- Founded: 2013
- Employees 19
- Website: SONDORS Electric Bikes | The Most Affordable and Loved E-Bikes Ever!
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.
- Underwriters: Aegis Capital Corp
- Headquarters: Kiryat Ono, Israel
- Founded: 2013
- Employees 10
- Website: ParaZero Drone Safety Solutions Drone Parachute Drone Safety Systems
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 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
Possible Pricing of IPOs from Past Weeks
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.
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) 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.
- Underwriters: Network 1 Financial Securities
- Headquarters Tokyo, Japan
- Founded 2001
- Employees 46
- Website: Tokyo Real Estate | Lead Real Estate Co.,LTD (lead-real.co.jp)
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.
- Underwriters: EF Hutton
- Headquarters Shanghai, China
- Founded 2012
- Employees 231
- Website: 燕谷坊集团 (yangufang.com)
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.
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.
- Underwriters: Spartan Capital Securities
- Headquarters Jupiter, FL
- Founded 2016
- Employees 16
- Website: Jupiter Neurosciences, Inc
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.
- Underwriters Univest Securities
- Headquarters Jinjiang, China
- Founded 2004
- Employees 390
- Website: 「理臣咨询」企业税务筹划-IPO上市辅导财务管理咨询顾问 (lichenzx.com)
US IPO Weekly Recap: One IPO Week
Micro-cap diamond maker Adamas One (JEWL) after some delay completed the first offering of the December IPO market. After attempting to complete its IPO over the past month, Adamas One (JEWL) priced at the low end to raise $11 million at a $90 million market cap.
Adamas One (JEWL)
Lab-grown diamond producer Adamas One (JEWL) has been trying to complete its IPO over the past month. It finally priced at the low end to raise $11 million at a $90 million market cap. The company had been planning to raise $34 million (56% secondary) at a $97 million market cap. Although it had priced on Tuesday, trading did not begin until Friday.
The company is early stage and only began generating revenue in the current fiscal year. Adamas One intends to sell finished diamonds for jewelry and rough unfinished diamond materials for industrial uses. Lab-grown diamonds are composed of a pure carbon lattice, just like mined diamonds, and are not considered synthetic or simulant diamonds like cubic zirconia and moissanite.
- Underwriters: Alexander Capital
- Headquarters: Scottsdale, AZ
- Founded: 2018
- Employees 11
- Website: Adamas One | Lab-Grown Diamonds
JEWL finished it’s first day up 5%.
Standing out this week was the announcement of the filing of the largest IPO from a Vietnamese company since 2018, and the first US IPO from a Vietnam-based company. EV spinoff, Vingroup’s Vinfast Auto (VFS) filed for an IPO we estimate which hopes to raise more than $1 billion. Two other micro-caps and a SPAC also submitted initial filings. A few large IPOs had joined the pipeline in November along with several other companies updating their financials, indicating that we may see a slight pickup in activity before year end.
Narcotics storage company Scripps Safe (SCRP) and Singapore-based real estate brokerage platform Ohmyhome (OMH), both of which filed to raise $15 million also filed. SPAC Alphatime Acquisition (ATMCU) filed for a $60 million IPO. It plans to target businesses in Asia.
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.
From The TradersCommunity Research Desk