Bankers may be starting the Valentine’s Weekend early after navigating a rocky stock market this week and pricing 16 deals – mostly SPACs plus a sprinkling of small-cap IPOs and uplistings – to raise about $1.24 billion. The week’s mix included a public offering after an uplisting. (This column, initially published on Monday, Feb. 7, 2022, under the headline, “Cariloha Tops Small-Cap Menu,” was updated Friday, Feb.11, 2022, with news on Cariloha cutting its IPO’s size and a rewrite to summarize the week’s activity.)
Bamboo bedding and clothing company Cariloha (ALOHA proposed) pared its IPO by a third on Friday morning and moved the pricing date to early next week. The eco-friendly company now plans to sell 2 million shares, down from 2.3 million initially, at $9 to $11, down from $12 to $14, according to an SEC filing dated Feb. 11. The deal was originally set to price Thursday night (Feb. 10). The news came after eight deals were priced Thursday night.
Cariloha markets and sells merchandise – bedding and towels as well as women’s and men’s underwear and leisure wear – “made of eco-friendly viscose from bamboo,” the prospectus says. The company, based in Sandy, Utah, markets and sells its merchandise on its own website and in its showrooms as well as at resorts and ports-of-call through its partnerships with major cruise lines. Cariloha has also partnered with major third-party e-commerce marketplaces, including Amazon.com, Costco.com, Bedbathandbeyond.com and Target.com, among others, to increase its online presence.
Cariloha’s IPO now looks like it will be priced Monday night – yes, Valentine’s night – to trade Tuesday on the NASDAQ.
Roth Capital Partners and Oppenheimer & Co. are the joint book-runners.
Cariloha, founded in 2007, is not profitable. The company had a net loss of $850,000 on revenue of $48.64 million for the 12 months that ended Sept. 30, 2021. These results reflect the impact of the COVID-19 pandemic on the cruise business and the travel-related retail segment, according to the prospectus.
“We have grown revenue every year since our formation, except during the COVID-19 pandemic (the “COVID-19 pandemic”), increasing revenue to $68.5 million in 2019,” Cariloha says in the prospectus.
Cariloha’s net income for the year ended Dec. 31, 2019, was $542,127, according to the prospectus.
SPACs Ruled the Week
Nine of the 15 deals priced this week were SPACs, which raised $1.125 billion. SPACs with an international focus were the theme of the week.
The IPO market got under way Monday morning with a SPAC, Aurora Technology Acquisition Corp. (ATAKU), announcing that it had priced its IPO of 20 million units at $10 each to raise $200 million. The units – stock and warrants – started trading Monday (Feb. 7, 2022) on the NASDAQ. The stock opened at $9.99 and closed its first day of trading at $10.01. This SPAC is focused on Asian or Asian-American entrepreneurs and their businesses, based in either the United States or Asia, excluding China. Maxim Group LLC was the sole book-runner.
LIV Capital Acquisition Corp. II (LIVBU) priced its SPAC IPO Monday night (Feb. 7) – 10 million units at $10 each to raise $100 million. The stock and warrants started trading Tuesday on the NASDAQ. This SPAC, backed by LIV Capital, a private investment firm in Mexico, will search for a high-growth business based in Mexico or with a significant presence there. EarlyBirdCapital was the sole book-runner.
Three SPACs priced their IPOs on Tuesday night (Feb. 8), raising a total of $325 million and bringing the 2022 volume up to 32 SPACs priced so far this year. All three were NASDAQ listings:
- Evergreen Corp. (EVGRU), a Malaysia-based SPAC, raised $100 million. EF Hutton was the sole book-runner.
- Counter Press Acquisition (CPAQU), a New York-based SPAC focused on sports, media and data analytics, raised $75 million. BTIG LLC and EarlyBirdCapital were the joint book-runners.
- byNordic Acquisition (BYNOU), a Swedish SPAC focused on Northern European tech companies, raised $150 million. Keefe, Bruyette & Woods and Drexel Hamilton were the joint book-runners.
On Thursday night, four more SPACs were priced, raising a total of $500 million:
- HNR Acquisition (HNRA.U), a Houston-based energy SPAC, raised $75 million. EF Hutton was the sole book-runner.
- Jaguar Global Growth Corp. I (JGGCU), an Asia-focused SPAC, raised $200 million. Citigroup and Barclays were the joint book-runners.
- Relativity Acquisition Corp. (RACYU) raised $125 million. The book-runner was A.G.P./Alliance Global Partners.
- Signal Hill Acquisition Corp. (SGHLU) raised $100 million. B. Riley Securities was the sole book-runner.
Mixed Bag of Small-Cap Deals
Seven small-cap deals – five IPOs, one NASDAQ uplisting and one offering after an NYSE-American uplisting – produced a total of $116.9 million in proceeds this week. Two small-cap IPOs – Jupiter Neurosciences (JUNS proposed) and The tru Shrimp Companies, Inc. (BTRU proposed) – were postponed Thursday “due to adverse market conditions.” The U.S.stock market dropped on Thursday after data showed January inflation data at a 40-year high.
Thursday night’s IPO pricings included a tiny commercial REIT, Modiv (MDV), which raised $1 million; a Scottish cancer biotech, TC BioPharm (Holdings) plc (TCBP), which raised $17.5 million, and Direct Digital Holdings, Inc. (DRCT), an AdTech platform, which raised $15.4 million.
The Arena Group (AREN), announced Friday morning that it had priced its public offering, which raised $30 million Thursday night and followed the completion of its uplisting on Wednesday (Feb. 9) to the NYSE-American exchange.
On Wednesday night, two small-cap IPOs were priced – HeartCore Enterprises (HTCR) and Sky Technologies (SKYX), also known as SQL Technologies. Both declined on their first day of trading.
HeartCore Enterprises (HTCR), a Japanese software services company, priced its IPO on Wednesday night (Feb. 9, 2022) at $5 – the mid-point of its $4-to-$6 range, which was cut recently amid the turmoil in the U.S. stock market. HeartCore priced 3.0 million shares, the same number of shares in its amended prospectus, at $5 each to raise $15 million. The stock ended its first day of NASDAQ trading on Thursday at $4.95, down a nickel or off 1 percent from its IPO price. At Friday’s close, HeartCore was down 17.4 percent from its IPO price.
Boustead Securities was the sole book-runner.
HeartCore Enterprises, based in Tokyo, is a software company that operates two business units: a customer experience management (CXM) business and a digital transformation company. The company says it has about 819 customers in Japan, including such big-name brands as Sony, Panasonic, Bridgestone and Philips, Toyota, Honda and Nomura Securities, and 23 customers outside Japan.
HeartCore Enterprises reported net income of $660,000 on revenues of $10.82 million for the last 12 months, according to the prospectus.
Sky Technologies (SKYX), which provides plug-and-play products for light fixtures and ceiling fans, priced its IPO on Wednesday night at $14 – $1 above the top of its $11-to-$13 range – and increased the number of shares to 1.65 million, up from 1.5 million, to raise $23 million. The Benchmark Company was the sole book-runner. Sky Technologies’ stock slid on Thursday to end its first day of NASDAQ trading at $11.85, down 15.36 percent from its IPO price. At Friday’s close, Sky Technologies was down 25 percent from its IPO price.
A small NASDAQ uplisting by wearable insulin pump developer Modular Medical (MODD) also was priced Wednesday night – 2.5 million units at $6 to raise $15 million. Oppenheimer & Co. was the sole book-runner.
For a look at this week and next week, please see the IPO Calendar.
Week of Feb. 14
The IPO Calendar for the week of Feb. 14, includes the Cariloha IPO plus one SPAC, a few small-cap IPOs and two tiny uplistings so far. With Valentine’s Day observed on Monday, Wall Street is hoping for a thaw in the chilly IPO market.
(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)
Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.
Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute change.