US Weekly IPO and SPAC Monitor: Frac Sand Miner Atlas Energy, Xiao-I, PishPosh and ICZOOM

The market gets a topical IPO in the week ahead; energy play frac sand miner Atlas Energy Solutions (AESI). The deal would be the year’s second largest IPO to date, with plans to raise $387 million at a $2.2 billion market cap. In the week ahead other IPO listed to price include cognitive intelligence tech Xiao-I (AIXI), online retailer PishPosh (BABY) and Chinese B2B platform ICZOOM Group (IZM). Holdovers including alternative medicine practice Nava Health, agriculture equipment maker Opti-Harvest (OPHV), game studio and NFT marketplace Ultimax Digital (NFTU).

There was just one small IPO and one SPAC that began trading this past week. Long delayed Israeli video and image software provider Beamr (BMR) and the first SPAC IPO to upsize since March 2022, SilverBox III (SBXC.U) raised $120 million.

Atlas Energy

Israeli video and image software provider Beamr (BMR) raised $8 million at a $55 million market cap. Beamr finished down -13%. The first SPAC IPO to upsize since March 2022, SilverBox III (SBXC.U) raised $120 million. The SPAC is the third to be formed by members of SilverBox Capital, and it intends to acquire one or more businesses with an aggregate enterprise value in excess of $750 million.

SolarJuice (SJA) a spin out from SPI Energy, alternative medicine practice Nava Health MD (NAVA), China-based ASIC chip designer Intchains Group (ICG), advertising contract marketplace NYIAX (NYX), Opti-Harvest (OPHV) and Ultimax Digital (NFTU) were all on the docket but none priced.

There were no sizable pricings, two small IPOs submitted initial filings Lucas GC (LGCL), which provides online recruiting and outsourcing services in China, filed to raise $21 million. PSI Group Holdings (PSIG), a Hong Kong-based provider of freight forwarding services, filed to raise $16 million at a $125 million market cap. The calendar got a boost from frac sand miner Atlas Energy Solutions (AESI), which launched its $387 million IPO and is scheduled to trade in the week ahead.

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 2023 IPO stats.

Atlas Energy Solutions (AESI)

Atlas Energy Solutions (AESI) is a frac sand miner and plans to raise $387 million at a $2.2 billion market cap. Led by successful oil and gas founder Bud Brigham, Atlas mines sand in the Permian Basin for use in oil and gas fracking, controlling over 14k acres of open-dune sand reserves. Its differentiated property allows for electric dredging, which it states reduces environmental impact. The company expects to spend $600+ million over the next two years to complete its current initiatives.

  • Underwriters: Goldman Sachs BofA Securities Piper Sandler RBC Capital Markets Barclays Citi Raymond James Johnson Rice & Co. Stephens Inc. Capital One Securities Pickering Energy Partners Drexel Hamilton
  • Headquarters: Austin, TX
  • Founded: 2017
  • Employees 371
  • Website: Atlas Energy Solutions

Xiao-I (AIXI)

Xiao-I (AIXI) plans to raise $47 million at a $564 million market cap. The company’s portfolio of cognitive intelligence technologies is based on natural language processing and AI implementation, with a focus on conversational AI. It serves businesses primarily in China, and its five largest customers accounted for nearly three-quarters of revenue in the 1H22. Xiao-I has demonstrated growth and margin expansion, though continued investment in R&D is expected to weigh on profitability.

ICZOOM Group (IZM)

Chinese B2B platform ICZOOM Group (IZM) plans to raise $7 million at a $46 million market cap. They are an offshore holding company incorporated in Cayman Islands, conducting operations in the People’s Republic of China (“PRC”) through PRC subsidiaries and Shenzhen Pai Ming Electronics Co., Ltd. (“Pai Ming Shenzhen”) variable interest entity (the “VIE”). The main contribution of their VIE is to hold an ICP license, allowing them to provide internet information services through their e-commerce platform.

Nava Health MD (NAVA)

Alternative medicine practice Nava Health MD (NAVA) plans to raise $16 million at an $83 million market cap. The company operates four physical locations in the Baltimore-Washington metro region, with up to eight more expected to open by year-end, and provides telehealth services in 12 states and DC.

Opti-Harvest (OPHV)

Opti-Harvest (OPHV), which produces agricultural equipment and technology to optimize sunlight intake for plant growing, plans to raise $8 million at a $111 million market cap. The company began commercializing its first products in 2021, and has yet to generate significant revenue.

Ultimax Digital (NFTU)

Ultimax Digital (NFTU), which operates a video game development and publishing studio and an NFT marketplace, plans to raise $8 million at an $80 million market cap. Ultimax Digital expanded into the NFT business in 2021, and had no revenue in 2021 or the 9mo22.

Possible Pricing of IPOs from Past Weeks

SolarJuice (SJA)

SolarJuice (SJA) plans to raise $17 million at a $154 million market cap in the coming week. Being spun out of SPI Energy, the company provides solar energy equipment and services for residential and small commercial uses in the US and Australia. Another SPI Energy spin-off, Phoenix Motor (PEV), went public last June and currently trades 85% below its IPO price.

SolarJuice

NYIAX (NYX)

Advertising contract marketplace NYIAX (NYX) plans to raise $9 million at a $71 million market cap. NYIAX’s platform utilizes the Nasdaq financial framework (“NFF”). This technology platform is protected through a joint patent held by both NYIAX and Nasdaq Technology AB (“Nasdaq”), a wholly owned subsidiary of Nasdaq, Inc. This patented technology creates current and future opportunities in media and advertising industries.

NYIAX is a marketplace where advertising inventory, campaigns and audiences can easily be listed and sold through utilization of highly transparent and efficient financial technology. The NYIAX platform provides Media Buyers and Media Sellers a marketplace where advertising or audience campaigns are listed, bought, and sold; thereafter, the contract flows directly into the Hyperledger Fabric Blockchain for contract management, reconciliation, and automation purposes.

Intchains Group (ICG)

China-based ASIC chip designer Intchains Group (ICG) may raise $10 million at a $481 million market cap. The company, which has been profitable since 2020, designs chips for blockchain applications. Originally planning to raise $29 million, Intchains cut its proposed ADS offering by 65% this past week.

Interactive Strength (TRNR) – Delayed

Fitness equipment brand Interactive Strength (TRNR) plans to raise $14 million at a $100 million market cap. The company sells home fitness equipment and offers personal training classes under the Forme brand. Very small and highly unprofitable, its two product offerings feature a connected fitness mirror.

NX Horizon Solar Tracker

Intensity Therapeutics (INTS) – Delayed

Oncology biotech Intensity Therapeutics (INTS) plans to raise $10 million at an $82 million market cap. Intensity Therapeutics, Inc. is a clinical stage biotechnology company passionately committed to applying scientific leadership in the field of localized cancer reduction leading to anti-cancer immune activation.

Their approach involves the direct injection into tumors of a unique product created from their DfuseRx discovery platform. One challenge they have identified with current intratumoral (IT) treatment approaches is that a tumor’s lipophilic, high fat and pressurized microenvironment does not effectively absorb water-based products. Evidence shows the mechanism of tumor killing achieved by their drug candidate also leads to systemic immune activation in certain cancers.

NeurAxis (NRXS) – Delayed

NeurAxis (NRXS) is a growth stage company focused on developing neuromodulation therapies to address chronic and debilitating conditions in children. The Carmel, IN-based company plans to raise $15 million by offering 1.9 million shares at a price range of $7 to $9. At the midpoint of the proposed range, NeurAxis would command a fully diluted market value of $48 million. With one FDA indication, functional abdominal pain associated with IBS in adolescents 11-18 years old on the market, additional clinical trials of PENFS in multiple pediatric conditions are underway focused on unmet healthcare needs in children.

  • Underwriters: Alexander Capital, WallachBeth Capital
  • Headquarters Carmel, IN
  • Founded 2011
  • Employees 16
  • Website: NeurAxis

Lead Real Estate (LRE) – Delayed

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.

Intchains Group (ICG) – Delayed

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) – Delayed

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.

ParaZero Technologies (PRZO) – Delayed

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.

Alopexx (ALPX) – Delayed

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

YanGuFang Group (YGF) – Delayed

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) – Delayed

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) – Delayed

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)

US IPO Weekly Recap: 1 SPAC, 1 IPO Week

There was just one small IPO and one SPAC that began trading this past week. Long delayed Israeli video and image software provider Beamr (BMR) raised $8 million at a $55 million market cap. Beamr finished down -13%.

The first SPAC IPO to upsize since March 2022, SilverBox III (SBXC.U) raised $120 million. The SPAC is the third to be formed by members of SilverBox Capital, and it intends to acquire one or more businesses with an aggregate enterprise value in excess of $750 million.

Beamr (BMR)

Beamr (BMR), an Israeli video encoding and image optimization software provider, raised $8 million at a $55 million market cap. BMR had been long delayed from 2022 and had planned to raise $15 million at a $73 million market cap.

Beamr

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

BMR finished down -13%.

Filings Monitor

2023

There were no sizable pricings, two small IPOs submitted initial filings Lucas GC (LGCL), which provides online recruiting and outsourcing services in China, filed to raise $21 million. PSI Group Holdings (PSIG), a Hong Kong-based provider of freight forwarding services, filed to raise $16 million at a $125 million market cap. The calendar got a boost from frac sand miner Atlas Energy Solutions (AESI), which launched its $387 million IPO and is scheduled to trade in the week ahead.

Last week there were six filings. Atmus Filtration Technologies (ATMU) was the standout along with Texas based SPAC “CO2 Energy Transition Corp” targeting the carbon capture, utilization, and storage industry. ATMU is the filtration unit of engine maker Cummins, filed for an IPO for up to $350 million. Serving end-users in approximately 150 countries, Atmus provides filtration products for various on- and off-highway vehicles and equipment. The company’s products are primarily used in the aftermarket, providing a strong recurring revenue base.

Houston SPAC CO2 Energy Transition filed IPO Targeting Carbon Capture

In the pipeline frac sand miner Atlas Energy Solutions (AESI) disclosed 2022 financials ahead of its estimated $200 million IPO. Eight IPOs submitted initial filings, the largest plans to raise just $29 million and one SPAC. There are three uplistings: oil and gas producer Alpha Energy (APHE) filed to raise $29 million, Malaysia-based chemical wholesaler BioNexus (BGLC) filed to raise $17 million, and online content moderating service Ealixir (EAXR) filed to raise $15 million.

Four Chinese companies submitted initial filings: industrial shredder producer Harden Technologies (HARD) filed to raise $15 million, logistics services provider Jayud Global Logistics (JYD) filed to raise $12 million, fabric and face mask producer Earntz Healthcare (ETZ) filed to raise $11 million, and organic grocery chain Healthy Green Group (HGRN) filed to raise $17 million. Early-stage medical supplies producer MI Americas (IAMR) filed to raise $10 million.

Five small IPOs submitted initial filings this past week. They were joined by two SPACs (KVISU.RC and SBXC.U), marking the first blank check IPO filings of 2023, compared to 20 by this time last year.

Three IPOs submitted initial filings, Frac sand miner and transporter Atlas Energy Solutions (AESI) filed to raise an estimated $200 million. E-cigarette and cannabis vaping product brand Ispire Technology (ISPR) filed to raise $42 million. Singapore-based interior designer FBS Global (FBGL) filed to raise $15 million.

We saw three new deals join the pipeline led by Chinese pet hospital chain New Ruipeng Pet Group (RPET), which filed to raise $100 million. Korean social media platform Hanryu Holdings (HRYU) filed to raise $35 million, and private jet charter broker Star Jets International (JETR) filed to raise $12 million.

2022

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)
US IPO Issuance in August Highest For 2022

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