IPO interest is on pace for its worst year in decades after the market crashing the IPO market has been in the doldrums. New companies have few options but to burn through cash while they wait for the stock market to calm. Three small deals are scheduled to price in the week ahead. Hemp cigarette manufacturer Hempacco (HPCO), non-invasive neural input technology company Wearable Devices (WLDS) and Lung cancer diagnostics developer bioAffinity Technologies (BIAF)
Last week we had Malaysian fintech Starbox Group Holdings (STBX), ASX-listed Mobilicom (MOB), Phase 2 Biotech PaxMedica (PXMD), Beijing-based Jianzhi Education Technology Group (JZ), Online store operator Jeffs’ Brands (JFBR) and website manager Onfolio Holdings (ONFO).
US IPO Week Ahead
Hemp cigarette manufacturer Hempacco (HPCO) plans to raise $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.
- Underwriters Boustead Securities
- Headquarters San Diego, CA
- Founded 2019
- Employees 15
- Website Hempacco, Co. Inc. (hempaccoinc.com)
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
bioAffinity Technologies (BIAF)
Lung cancer diagnostics developer bioAffinity Technologies (BIAF) plans to raise $8 million at a $54 million market cap.
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.
- Underwriters WallachBeth Capital and Craft Capital Management
- Headquarters San Antonio, TX
- Founded 2014
- Employees 14
- Website Home – BioAffinity Technologies
“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 Weekly Recap: 6 IPO Week
Six small deals priced this past week, though only three met the criteria for Renaissance 2022 IPO stats. Pipeline activity picked up with three new IPO filings, including a biotech that plans to raise $150 million, as well as amendments from some notable issuers on file.
Starbox Group Holdings (STBX)
Starbox Group Holdings, which provides a payments app in Malaysia that offers cash rebates, raised $20 million by offering 5 million shares at $4, the low end of the range of $4 to $5.
Starbox is building a business ecosystem for micro, small, and medium enterprises in Malaysia, with cash rebates at its foundation. Retail merchants can register on the company’s GETBATS website and mobile app as “merchants” to offer cash rebates on their products or services, which attracts shoppers to register as “members” in order to earn cash rebates for shopping online and offline. As of March 31, 2022, the GETBATS website and mobile app had approximately 614 thousand members and nearly 800 merchants.
Of note Malaysia-focused payments app Treasure Global (TGL) went public earlier this month and closed Friday 42% above offer (-68% from first-day close).
Underwriters Network 1 Financial Securities
Headquarters Kuala Lumpur, Malaysia
Jianzhi Education Technology Group (JZ)
Beijing-based Jianzhi Education Technology Group (JZ) priced at the low end to raise $25 million at a $303 million market cap. Jianzhi Education provides digital educational content to higher education institutions and libraries in China. Profitable with steady growth, the company’s content library comprised more than 30,000 online videos and video courses as of 12/31/21.
Soaring more than 3,100% intraday, Jianzhi Education finished up 275%.
ASX-listed Mobilicom (MOB) plans to raise $12 million at a $20 million market cap in its Nasdaq unit offering. Mobilicom is a provider of hardware products, software and cybersecurity solutions that they design, develop and manufacture and that are embedded in Small Drones (or, Small Unmanned Aerial Vehicles – SUAVs) and robotics. They aim to penetrate the commercial segment of our markets by leveraging the experience we have gained in defense segment of our markets. They believe that their key competitive advantage is our ability to provide a near end-to-end solution which enables us to get a “birds-eye” view of our customer’s needs.
They have a partnership with a U.S.-based designer and manufacturer of RF/microwave amplifiers and integrated radio systems to incorporate our multi-function radios into its high-power radio solutions. Their solutions have been deployed by our various customers worldwide, including in the United States, Europe and Israel. They generate our revenue from the sale of hardware and from licensing fees and professional support services related to software and cyber security solutions.
- Underwriters ThinkEquity
- Headquarters Melbourne, Victoria Australia
- Founded 2006
- Employees 28
- Website mobilicom-ltd.com.au
Phase 2 Biotech PaxMedica (PXMD) priced slightly below the midpoint to raise $8 million at a $76 million market cap. Initially filing for an IPO in July 2020, the company has since cut its original deal size in half as it seeks to develop therapies for neurodevelopmental disorders. In February 2021, PaxMedica announced positive topline data from its Phase 2 dose-ranging trial for the treatment of the core symptoms of autism spectrum disorder (ASD).
PaxMedica finished down 6%
- Underwriters Craft Capital Management, R.F. Lafferty & Co.
- Headquarters Woodcliff Lake, NJ
- Founded 2018
- Employees 3
- Website www.paxmedica.com
We saw other, three nano-caps completed unit offerings. Online store operator Jeffs’ Brands (JFBR) raised $15 million, website manager Onfolio Holdings (ONFO) raised $14 million, and ASX-listed Mobilicom (MOB) raised $12 million.
IPO Lockup Period Expirations
Monday – August 15
The IPO lockup periods expire on Sunshine Biopharma (SBFM) and Vivakor (VIVK). Both stocks are down more than 60% from their IPO pricing level.
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