US Weekly IPO and SPAC Monitor: Lab-grown Diamond Producer Adamas One

There is just one small deal scheduled to price, lab-grown diamond producer Adamas One (JEWL) in the short Thanksgiving week. There is a chance some micro-caps may IPO they have been looking to price on a “day-to-day” basis as brokers look to shift deals in the pipeline to investors with the stock market surge this week. There are several large issuers in the pipeline, as well as sizable new filings from insurer Skyward Specialty (SKWD) and oil and gas companies TXO Energy Partners (TXO) and BKV Corp (BKV),

Adamas One

Last week we had just one IPO, though in the pipeline, seven companies submitted initial filings, including specialty property and casualty insurer Skyward Specialty Insurance Group (SKWD) and energy companies TXO Energy Partners LP (TXO) and BKV Corp (BKV) planning to raise $100 million.

US IPO Week Ahead

Adamas One (SKWD)

Lab-grown diamond producer Adamas One (JEWL) may price in the week ahead, planning to raise $34 million (56% secondary) at a $97 million market cap. 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.

Possible Pricing of IPOs from Past Weeks

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

“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

Beamr (BMR)

Beamr

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)

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.

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)

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.


US IPO Weekly Recap: One IPO Week

Last week we had just one IPO, though in the pipeline, seven companies submitted initial filings, including specialty property and casualty insurer Skyward Specialty Insurance Group (SKWD) and energy companies TXO Energy Partners LP (TXO) and BKV Corp (BKV) planning to raise $100 million.

Acrivon Therapeutics (ACRV)

Precision oncology biotech Acrivon Therapeutics (ACRV) offered more shares and priced well below the range to raise $94 million at a $277 million market cap. The company also raised $5 million in a concurrent private placement, and added insider indications at pricing covering 88% of the deal. The company’s lead candidate is in a potentially registrational Phase 2 trial across multiple tumor types, focusing on platinum-resistant ovarian, endometrial, and bladder cancers, with initial readouts expected in the 2H23. Their AP3 platform enables the creation of drug specific proprietary OncoSignature companion diagnostics that are used to identify the patients most likely to benefit from our drug candidates, which we refer to as patient responders.

Acrivon Therapeutics
  • Underwriters: Roth Capital, The Benchmark Company
  • Headquarters: Watertown, MA
  • Founded: 2018
  • Employees 42
  • Website: Home – Acrivon

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.

Acrivon Closed Up 26%

Filings Monitor

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)


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