IPO interest has picked up with the stock market rally. August is traditional a slow time in the market with European holidays, and this year after the market crashing the IPO market has been in the doldrums but is showing some life. Two small deals are scheduled to price in the week ahead. Malaysian fintech Starbox Group Holdings (STBX) plans to raise $23 million at a $203 million market cap. ASX-listed Mobilicom (MOB) plans to raise $12 million at a $20 million market cap.
Last week we had GigaCloud Technology (GCT) raised $36 million at a $493 million market cap. Innovative Eyewear (LUCY) raised $7.4 million. Graphex (GRFX) upsized and priced at the midpoint to raise $12 million at a $79 million market cap. Phase 2 Biotech PaxMedica (PXMD) moved its plans to raise $8 million at an $80 million market cap to the following week.
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
Founded 2019
Employees 17
Website www.starboxholdings.com
Mobilicom (MOB)
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
US IPO Weekly Recap: 3 IPO Week
Three small issuers began trading in another quiet week for the IPO market, though just two met Renaiisance’s tracking criteria. In the pipeline, two IPOs submitted initial filings. Last week we had GigaCloud Technology (GCT), Innovative Eyewear (LUCY) raised $7.4 million and Graphex (GRFX) upsized.
The most notable news from the pipeline, AIG carve-out Corebridge Financial (CRBG) disclosed 1H22 financials this past Tuesday ahead of an estimated $3 billion IPO which could launch as early as next month.
GigaCloud Technology (GCT)
Hong Kong-based GigaCloud Technology (GCT) priced at the high end to raise $36 million at a $493 million market cap.
GigaCloud Technlogy finished the week up 206%.
The company offers an online B2B marketplace for large parcel merchandise, including furniture, home appliances, and fitness equipment. Its global marketplace connects manufacturers, primarily in Asia, with resellers, primarily in the US, Asia, and Europe. Although Revenue grew 19% in 1Q22, the company has since been confronted by several supply chain issues such as increasing fuel costs and shipping delays due to COVID-19 lockdowns in Shanghai.
- Underwriters Aegis Capital Corp.
- Headquarters Hong Kong, China
- Founded 2006
- Employees 694
- Website www.gigacloudtech.com
Graphex (GRFX)
Chinese graphene product manufacturer Graphex Group (GRFX) upsized and priced at the midpoint to raise $12 million at a $79 million market cap by offering 3.2 million ADSs.
Graphex Group finished the week trading flat.
The company is currently listed on the Hong Kong Exchange (6128) and the OTCQX market (GRFXY). Graphex manufactures natural spherical graphite and specialized graphite products that are used primarily in lithium-ion batteries, typically for electric vehicles and clean energy storage solutions. The company’s graphene products operations are based in the PRC and strategically located near a supply source of high-quality natural graphite.
Graphex currently has approximately 30 customers in the PRC, primarily manufacturers of automotive batteries, conductive agents, refractory materials for the steel industry, and heat sink materials for precision electronics. The company also operates two other segments: its landscape architecture and design business and its catering business.
Graphex Group was founded in 1981 and booked $50 million in revenue for the 12 months ended December 31, 2021. It plans to list on the NYSE American under the symbol GRFX. EF Hutton is the sole bookrunner on the deal.
Underwriters EF Hutton
Headquarters Hong Kong, China
Founded 1981
Employees 480
Website www.graphexgroup.com
Innovative Eyewear
Innovative Eyewear (LUCY) raised $7.4 million by offering 1 million units at $7.50, the low end of the upwardly revised range of $7.50 to $9.50.; it began trading on the Nasdaq on Monday. Innovative Eyewear (LUCY) priced its unit offering at the low end to raise $7 million at a $66 million market cap.
The finished the week down 36%.
The company sells Bluetooth connected eyewear under the brand Lucyd, with $1 million in trailing sales. The company offered 0.1 million more units than anticipated. It last revised terms in July, having previously filed to offer 1.5 million units at $5.50 to $7.50. Each unit contains one share of common stock and two warrants, exercisable at the IPO price.
Innovative Eyewear develops and sells a suite of tech-enabled eyeglasses and sunglasses, offering both prescription eyewear and sun protection. In January 2021, the company launched its first commercial product, Lucyd Lyte, which enables the wearer to listen to music, take and make calls, and use voice assistants to perform many common smartphone tasks hands-free.
Underwriters Maxim Group LLC
Headquarters North Miami, FL
Founded 2019
Employees 9
Website Lucyd® Bluetooth Smart Glasses – Smart, Audio Eyewear
Because the company offered units with warrants attached, Innovative Eyewear will be excluded from Renaissance Capital’s 2022 IPO stats.
PaxMedica (PXMD)
PaxMedica, Inc. (PXMD) plans to raise $9 million in an initial public offering on Wednesday, August 24th,
Phase 2 Biotech PaxMedica (PXMD) plans to raise $8 million at an $80 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).
- Underwriters Craft Capital Management, R.F. Lafferty & Co.
- Headquarters Woodcliff Lake, NJ
- Founded 2018
- Employees 3
- Website www.paxmedica.com
We may see other small deals manage to price offerings as well, such as Onfolio (ONFO), bioAffinity Technologies (BIAF), and Loop Media (LPTV).
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.
Warrants
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