US Weekly IPO and SPAC Monitor: Projection Screen Maker Strong Global Entertainment

We had two large IPO’s price this week, Johnson and Johnson’s (JNJ) consumer health unit Kenvue (KVUE) and inflammatory disease biotech ACELYRIN (SLRN). The two deals raised a combined $4.3 billion, and both delivered solid trading in their debuts. We also had two blank check IPOs price this past week: Asia-focused Golden Star Acquisition (GODNU) and deep tech-focused Alchemy Investments Acquisition 1 (ALCYU). Just one IPO is scheduled to list in the week ahead, although other pending issuers may price following the strong debut of KVUE. Projection screen maker Strong Global Entertainment (SGE) is being spun out of FG Group (NYSE American: FGH).

Strong Global Entertainment

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.

Strong Global Entertainment (SGE)

Strong Global Entertainment (SGE) plans to raise $8 million at a $40 million market cap. The projection screen maker is being spun out of FG Group (NYSE American: FGH), the company manufactures large format projection screens and provides related products and services, primarily to cinemas, theme parks, educational institutions, and similar venues. The company is profitable and growing, though its top 10 customers accounted for over half of revenue in 2022.

Possible Pricing of IPOs from Past Weeks (incl: Delays)

Global Mofy Metaverse (GMM) Delayed

Chinese virtual content and digital marketing provider Global Mofy Metaverse (GMM) may raise $6 million at a $130 million market cap. Unprofitable and growing, the company engages in virtual content production, digital marketing, and digital assets development using a proprietary technology platform.

  • Underwriters: Maxim Group LLC
  • Headquarters Beijing, China
  • Founded 2017
  • Employees 30
  • Website: globalmofy.cn

Opti-Harvest (OPHV) Delayed

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) Delayed

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.

SolarJuice (SJA) Delayed

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.

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.

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) – Revised

ParaZero Technologies revised the terms for its upcoming IPO on Friday. Now plans to raise $10 million by offering 2.0 million shares at a price range of $4 to $6. At the midpoint of the revised range, ParaZero Technologies will raise 16% more in proceeds than previously anticipated. Concurrently, selling shareholders have registered 4.0 million shares, which may be offered and sold from time to time pursuant to the separate resale prospectus.

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.

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: 2 SPAC, 2 IPO Week

The market priced only one small IPO begin trading last week, Fitness equipment brand Interactive Strength (TRNR) and finished down 17%.

Kenvue (KVUE)

Kenvue (KVUE) upsized and priced slightly above the midpoint to raise $3.8 billion at a $42.0 billion market cap. KVUE had been looking to raise $3.3 billion at a $40.6 billion market cap, which would be the largest US IPO since late 2021. KVUE is being spun out of Johnson & Johnson, consumer health giant and offers a portfolio of well-known brands like Tylenol and Listerine and serves over a billion people across more than 165 countries. The company is mature and highly profitable, and it plans to pay a quarterly dividend with a 3.7% annualized yield at the midpoint. The company has spent the last several years optimizing its business, and even mentions AI among the areas of investment for enhancing its digital capabilities. Kenvue’s IPO proceeds, as well as $9 billion of new debt issuance, will be paid to J&J as part of the separation.

Kenvue
  • Underwriters: Goldman Sachs J.P. Morgan BofA Securities Citi Deutsche Bank BNP Paribas HSBC RBC Capital Markets UBS Investment Bank BBVA ING Intesa Sanpaolo Santander UniCredit Capital Markets Academy Securities Independence Point Securities Ramirez & Co., Inc Seelaus Siebert Williams Shank
  • Headquarters Skillman, NJ
  • Founded 1886
  • Employees 22,200
  • Website: Introducing Kenvue, the Name for the Planned Consumer Health Company (jnj.com)

Kenvue finished up 20%.

ACELYRIN (SLRN)

Inflammatory disease biotech ACELYRIN (SLRN) further upsized and priced at the high end to raise $540 million at a $1.8 billion market cap, the largest IPO from a biotech since February 2021. It had planned to raise $350 million at a $1.5 billion market cap, which would be the largest IPO from a biotech since June 2021. The company’s lead candidate was licensed from Affibody in late 2021 and is currently in Phase 2b/3 trials for hidradenitis suppurativa (HS), psoriatic arthritis (PsA), and uveitis. ACELYRN expects topline data for its HS trial in the 2H23, and PsA and uveitis in mid-2024.

ACELYRIN finished up 31%

Filings Monitor

2023

Three IPOs submitted initial filings this past week.

Six IPOs submitted initial filings this past week. Nature Wood Group (NWGL), a Macau-based forestry company with operations in Peru, filed to raise $30 million. Chinese supply chain management provider Majestic Ideal Holdings (MJID) filed to raise $17 million at a $62 million market cap. Hong Kong-based brokerage Solowin Holdings (SWIN) filed to raise $17 million. Chinese office equipment retailer EShallGo (EHGO) filed to raise $15 million at a $116 million market cap. Plant-based snack brand BranchOut Food (BOF) filed to raise $12 million. Chinese medical product maker WORK Medical Technology Group (WOK) filed to raise $10 million.

Three companies submitted initial filings and joined the pipeline. Mail order clothing company JP Outfitters (JPO) filed to raise $17 million, and Israeli 3D printing company XJet (XJET) filed to raise $8 million. Short-term rental operator reAlpha Tech (LPHA.RC) filed for a direct listing on the Nasdaq.

Five IPOs submitted initial filings. Late-stage inflammatory disease biotech ACELYRIN (SLRN) filed to raise $100 million. Bermuda-based reinsurer Fidelis Insurance Holdings (FIHL) also filed to raise $100 million. Veterinary hospital operator Inspire Veterinary Partners (IVP) filed to raise $28 million at a $50 million market cap. Media distributor Alliance Entertainment Holding (AENT) filed to raise $6 million. Luxury car importer Cheetah Net Supply Chain (CTNT) filed to raise $12 million last Friday.

Two small IPOs submitted initial filings. US-based semiconductor play Guerrilla RF (GUER) filed for a $15 million Nasdaq uplisting, and Singapore-based robotic cleaning equipment provider SIMPPLE (SPPL) filed to raise $9 million. Goldman’s MN8 Energy (MNX) disclosed updated financials ahead of its $100 million IPO.

Six IPOs and one SPAC submitted initial filings this past week. Permian Basin energy infrastructure operator Kodiak Gas Services (KGS) filed to raise $100 million. Chinese marketing services provider Xuhang Holdings (SUNH) filed to raise $92 million. Chinese education software provider NetClass Technology (NTCL) filed to raise $17 million at an $84 million market cap. Chinese debt collector GoodFaith Technology (GFCX) filed to raise $15 million at a $115 million market cap. Osteosarcoma-focused biotech OS Therapies (OSTX) filed to raise $10 million at a $116 million market cap. Skin care product maker CoLabs Int’l (CLLB)) filed to raise $6 million at a $201 million market cap.

Ares Acquisition II (AACT.U), the second SPAC formed by Ares Management, filed to raise $400 million to target businesses in North America, Europe, or Asia. Ares Acquisition II is the largest new blank check filing since December 2021.

Three issuers in the pipeline, two small IPOs and one direct listing submitted initial filings. Car sharing platform Turo (TURO) disclosed updated financials ahead of its estimated $300 million IPO.

Three small IPOs and one SPAC submitted initial filings this past week. Drone technology developer Unusual Machines (UMAC) filed to raise $20 million. High-energy plasma medical device developer Origin Life Sciences (OLSI) filed to raise $15 million at a $215 million market cap. Hong Kong-based construction contractor Chi Ko Holdings (CKHL) filed to raise $8 million. SPAC AI Transport Acquisition (AITRU) filed to raise $50 million to target artificial intelligence in transportation.

Five companies submitted initial filings, ZKH Group (ZKH), a Chinese B2B procurement platform for industrial supplies. If the company were to raise $200 million, ZKH’s offering would be the largest US IPO from a Chinese issuer since October 2021. Vietnamese EV manufacturer VinFast Auto (VFS), which disclosed 2022 financials ahead of its estimated $1 billion US IPO.

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.

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