August is traditional a slow time in the market with European holidays, this year after the market crashing the IPO market is even quieter with just one IPO scheduled to price this week ahead. Electric boat developer Forza X1 FRZA plans to raise $15 million at a $50 million market cap. Other small deals may also join during the week. Last week two deals priced Hong Kong-based Magic Empire Global (MEGL) which grabbed some $HD mania and finished up 2325%. The other Bruush $BRSH finished the week down 43% from its IPO price.
Electric boat developer Forza X1 (FRZA)
Electric boat developer Forza X1 (FRZA) raised $15 million by offering 3 million shares at $5, raising $15 million at a $50 million market cap. The company aims to manufacture and sell affordable electric boats for recreational sport use. Forza X1 expects to start producing and selling their initial FX1 dual console and FX1 center console models in the 2Q23. The company is a spin out of Twin Vee PowerCats.
Forza X1 plans to list on the Nasdaq August 12, 2022 under the symbol FRZA. ThinkEquity acted as sole bookrunner on the deal.
Update late IPO
Malaysian e-payment app Treasure Global prices US IPO at $4 low end
Opened: August 11, 2022 TGL
Treasure Global, which provides an e-payment app in Malaysia that offers instant rebates, raised $8 million by offering 2 million shares at $4, the low end of the range of $4 to $6. 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’s e-payment application, ZCITY App, is designed to offer consumers and merchants instant rebates and affiliate cashback programs, while providing a streamlined 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.
Treasure Global plans to list on the Nasdaq under the symbol TGL. EF Hutton acted as sole bookrunner on the deal.
We may see other small deals manage to price offerings as well, such as Onfolio (ONFO), bioAffinity Technologies (BIAF), and Loop Media (LPTV).
Update late IPO
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%.
Update late IPO
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%.
US IPO Weekly Recap: August 2 IPO Week to Start
Magic Empire Global (MEGL)
Hong Kong-based Magic Empire Global (MEGL) completed a US offering at its proposed price of $4 to raise $20 million at an $80 million market cap. MEGL doing business as Giraffe Capital, principally engages in the provision of corporate finance advisory services and underwriting services. Led by an executive team with extensive experience in investment banking and transaction advisory, Magic Empire Global has a relatively high customer concentration.
Magic Empire Global stock skyrocketed on Friday and finished up 2325% on debut. Much of the mania was associated with $HKD manic trading.
Bruush Oral Care (BRSH)
Bruush Oral Care (BRSH) priced its upsized unit offering at the low end to raise $16 million at a $31 million market cap. The oral hygiene e-commerce company currently has a product portfolio consisting of a sonic-powered electric toothbrush kit and brush head refills with plans to launch several new subscription-based consumable oral care products, including toothpaste, mouthwash, dental floss, a whitening pen, as well as an electric toothbrush for kids. Bruush is unprofitable and has a limited operating history. Revenue increased substantially in the 9mo21.
Bruush finished the week down 43% from its IPO price.
Two SPACs went public this past week, led by Pono Capital Two (PTWOU), which raised $100 million.
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