US Weekly IPO and SPAC Monitor: Interactive Strength, NFT Gaming Company

Last week was the busiest week since November 2021 for $100+ million IPOs in over a year, with Nextracker (NXT), Enlight Renewable Energy (ENLT), Hesai Group (HSAI) and Minerals Therapeutics (MLYS) leading. The week ahead we have six small companies currently scheduled to float. Electric bike maker SONDORS (SODR), fitness equipment brand Interactive Strength (TRNR), gaming platform developer The NFT Gaming Company (NFTG). Holdovers Intensity Therapeutics (INTS), infectious disease biotech Alopexx (APLX), and BullFrog AI (BFRG).

NX Horizon Solar Tracker

IPOs had a busy week ahead with six priced that raised $100+ million, the most in one week since November 2021. They were joined by two SPACs. Several small deals were unable to price (SODR, INTS, BFRG, NFTG, CWD, NRXS).

Integrated solar tracker and software solutions company Nextracker (NXT) raised $638 million at a $3.5 billion market cap in the year’s largest US IPO to date.  Enlight Renewable Energy (ENLT) priced below its last close on the TASE to raise $252 million at a $2.1 billion market cap. Chinese lidar developer Hesai Group (HSAI) upsized and priced at the high end to raise $190 million at a $2.6 billion market cap. Cardiorenal disease biotech Minerals Therapeutics (MLYS) upsized and priced at the high end to raise $192 million at a $645 million market cap. 

Two holdovers, Micro-cap Canadian psychotropics maker Lucy Scientific Discovery (LSDI) downsized to raise $8 million at a $67 million market cap. Lichen China (LICN) raised $16 million at a $106 million market cap. 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.

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.

The NFT Gaming Company (NFTG)

Gaming platform developer The NFT Gaming Company (NFTG) plans to raise $7 million at a $50 million market cap. The company is developing a digital gaming platform and plans to integrate non-fungible tokens into games on the platform. NFT Gaming Co. has yet to generate revenue.

Interactive Strength (TRNR)

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.

SONDORS (SODR)

E-bike maker SONDORS (SODR) lowered the proposed deal size for its upcoming IPO on Tuesday. In its latest filing, the company also replaced underwriters D.A. Davidson and Lake Street with A.G.P. The company now plans to raise $18 million by offering 2.5 million shares at a price range of $6 to $8. The company had previously filed to offer the same number of shares at a range of $8 to $10 plans to raise $23 million at a $146 million market cap. At the midpoint of the revised range, SONDORS will raise 22% less in proceeds than previously anticipated.

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.

BullFrog AI Holdings (BFRG)

BullFrog AI Holdings (BFRG) 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

Intensity Therapeutics (INTS)

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.

Possible Pricing of IPOs from Past Weeks

NeurAxis (NRXS)

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)

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)

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.

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.

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

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)

US IPO Weekly Recap: Two SPAC, Six IPO Week

IPOs had a busy week ahead with six priced that raised $100+ million, the most in one week since November 2021. They were joined by two SPACs. Several small deals were unable to price (SODR, INTS, BFRG, NFTG, CWD, NRXS).

Integrated solar tracker and software solutions company Nextracker (NXT) raised $638 million at a $3.5 billion market cap in the year’s largest US IPO to date.  Enlight Renewable Energy (ENLT) priced below its last close on the TASE to raise $252 million at a $2.1 billion market cap. Chinese lidar developer Hesai Group (HSAI) upsized and priced at the high end to raise $190 million at a $2.6 billion market cap. Cardiorenal disease biotech Minerals Therapeutics (MLYS) upsized and priced at the high end to raise $192 million at a $645 million market cap. 

Two holdovers, Micro-cap Canadian psychotropics maker Lucy Scientific Discovery (LSDI) downsized to raise $8 million at a $67 million market cap. Lichen China (LICN) raised $16 million at a $106 million market cap. 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.

Lichen China (LICN)

China-based Lichen China (LICN) raised $16 million by offering 4.0 million shares at $4. The company had planned to sell 4.5 million shares at that price, but lowered its deal size by 11% at the offering. It had been withdrawn multiple times and expected to raise $25 million. The company is a leading financial and taxation service provider in China in terms of revenue, according to the industry report of Frost & Sullivan. They 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.

LICN finished up 2%

Lucy Scientific Discovery (LSDI)

Canadian psychotropics company Lucy Scientific Discovery (LSDI) downsized to raise $8 million at a $67 million market cap. Lucy has a Controlled Substances Dealer’s License from Health Canada to produce and conduct research using psilocybin, psilocin, MDMA, and LSD. The company is early stage but has commenced operations.

Lucy Scientific

LSDI finished down 29%

Mineralys Therapeutics (MLYS)

Cardiorenal disease biotech Mineralys Therapeutics (MLYS) plans to raise $150 million at a $574 million market cap. Its sole candidate was licensed from Mitsubishi Tanabe and is initially being developed for uncontrolled hypertension. The company plans to initiate a randomized, double-blind, placebo-controlled Phase 2 trial for uncontrolled hypertension and resistant hypertension in the 1H23, followed by a Phase 3 trial in the 2H23.

MLYS finished up 15%

Hesai Group (HSAI)

Chinese lidar developer Hesai Group (HSAI) raised $190 million by offering 10 million American Depositary Shares (ADSs) at $19, the high end of the range of $17 to $19. The enthusiasm for the float saw the company offer 1 million more ADSs than anticipated. The company is a leading provider of three-dimensional lidar products for advanced driver assistance systems (ADAS), autonomous mobility, and last-mile delivery robots. Between 2017 and 12/31/22, it shipped over 103,000 lidar units, and its top ADAS customers include Li Auto, Jidu, and Lotus. Hesai is highly unprofitable and has faced increasing costs and supply chain constraints.

HSAI finished up 17%.

Chinese LiDAR Systems Developer Hesai Upsized IPO Debuts Up 11%

Enlight Renewable Energy (ENLT)

Israel-based Enlight Renewable Energy (ENLT) operates across three continents. Enlight’s utility-scale renewable energy projects include what it believes to be some of the largest onshore wind and solar projects across the US, Western and Central & Eastern Europe, and Israel. As of 11/22/22, its global portfolio included approximately 17.0 GW of multi-technology generation capacity and approximately 15.3 GWh of energy storage capacity. ENLT plans to raise $293 million at a $2.5 billion market cap.

  • Underwriters: J.P. Morgan BofA Securities Barclays Credit Suisse Nomura Securities WR Securities HSBC Roth Capital
  • Headquarters Rosh Ha’ayin, Israel
  • Founded 2008
  • Employees 217
  • Website: ENLIGHT – Home page (enlightenergy.co.il)

ENLT finished down 1%.

Wind and Solar Energy Operator Enlight Renewable Energy Downsized IPO Debuts

Nextracker (NXT)

Nextracker provides integrated solar tracker and software solutions enable solar panels in utility-scale power plants to follow the sun’s movement across the sky and optimize plant performance. Nextracker (NXT) plans to raise $500 million at a $3.1 billion market cap. The offering is 100% synthetic secondary, and new investors have indicated on 20% of the deal. The company is profitable and growing, though it is exposed to rising commodity and logistics prices.

  • Underwriters: J.P. Morgan BofA Securities Citi Barclays Truist Securities HSBC BNP Paribas Mizuho Securities Scotia Capital KeyBanc Capital Markets SMBC Nikko BTIG UniCredit Capital Markets Roth Capital Craig-Hallum Capital Group
  • Headquarters Fremont, CA
  • Founded 2013
  • Employees 550
  • Website: Transform Your Solar Plant Performance | Nextracker
  • NXT finished up 29%.
Solar Tracking Tech Company Nextracker Upsized IPO Debuts Up 27%

Filings Monitor

2023

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