The IPO Buzz: Strong Global Entertainment (SGE) Prices IPO at $4.00 – Below $5.00 Target

The IPO market hit the reset button on Monday night (May 15, 2023). Strong Global Entertainment (SGE) priced its micro-cap IPO at $4.00 – $1.00 below its $5.00 assumed IPO price – to raise $4.0 million. The micro-cap IPO was the first deal to get priced in more than a week as concerns over the U.S. debt ceiling roiled the overall U.S. stock market. No IPOs were priced last week – an unexpected speed bump after Johnson & Johnson’s spinoff of Kenvue (KVUE) raised $3.8 billion on May 3, 2023, in the biggest IPO since November 2021. Kenvue’s IPO led the pricing of $4.8 billion of deals – two IPOs and two SPAC IPOs – in the first week of May. Strong Global Entertainment’s stock is expected to start trading today – Tuesday, May 16, 2023 – on the NYSE-American Exchange. The Charlotte, N.C.-based maker of large format projection screens priced 1.0 million shares in its IPO – the same number of shares in the prospectus. The deal’s size was cut three times. Its original terms called for 3.0 million shares at $5.00. ThinkEquity was the sole book-runner of Strong Global Entertainment’s IPO. Strong Global Entertainment manufactures and distributes large projection screen systems to major cinema exhibitors, including IMAX Corp., AMC Entertainment Holdings, and Cinemark Holdings. The profitable company  provides maintenance, repair, installation, network support services and other services to cinema operators, mostly in the United States. Strong Global Entertainment also manufactures and distributes its Eclipse curvilinear screens, which are specially designed for theme parks, immersive exhibitions and simulation applications. The profitable company recently launched Strong Studios to expand its entertainment business to include content creation and the production of feature films and series, according to the prospectus. A Light Week This week’s IPO Calendar includes just a few more micro-cap deals – CaliberCos. Inc. (CWD proposed) from sole book-runner Spartan Capital Securities, Azitra (AZTR proposed) from sole book-runner ThinkEquity, and possibly ALE Group Holding Limited (ALEH proposed) from sole book-runner Prime Number Capital. Bankers expect to raise $26.25 million this week from four micro-cap IPOs, including Strong Global Entertainment and ALE Group Holding. Some see ALE Group’s deal as a candidate to move to next week’s pricing roster. CaliberCos Inc. (CWD proposed) is expected to price its tiny IPO – just 0.8 million (800,000) shares at $5.00 to raise $4.0 million – on Tuesday night (May 16, 2023). The micro-cap IPO’s size was cut last week from 1.2 million shares. The IPO’s pricing date was pushed back a night, pending NASDAQ approval. Spartan Capital Securities is the sole book-runner. CaliberCos Inc., based in Scottsdale, Arizona, describes itself as “a leading vertically integrated asset management firm, whose primary goal is to enhance the wealth of investors seeking to make investments in middle-market assets.” The profitable company defines the middle market as projects ranging in size from $5 million to $50 million. Caliber’s investment properties include apartments and townhomes, commercial office buildings and office parks, hotels, self-storage unit properties, retail buildings, small psychiatric hospitals and medical office buildings.  Azitra Inc. (AZTR proposed), a dermatology-focused biotech, is scheduled to price its micro-cap IPO – 2.4 million shares at $4.50 to $5.50 to raise $12.0 million – on Wednesday night (May 17, 2023). This is an NYSE-American Exchange listing. ThinkEquity is the sole book-runner. Azitra Inc., based in Branford, Connecticut, has a collaboration partnership with Bayer AG, the big German pharmaceutical company, to use Azitra’s patented skin microbiome technology and genetic engineering to develop therapeutic treatments for skin rashes caused by cancer therapy, an orphan skin diseases called Netherton syndrome, and other difficult skin conditions. The company was founded in 2014 by scientists from Yale University. Azitra attracted early funding from billionaire investor Peter Thiel’s Breakout Labs, Fierce Biotech reported in 2016.  Azitra’s leading therapeutic product candidates include: -*ATR-12, a genetically modified strain of Staphylococcus epidermis (S. epidermis) to treat Netherton syndrome, an orphan skin disease that can sometimes be fatal, with a proposed Phase 1b clinical trial expected to begin in the first half of 2023 and initial results expected in the first half of 2024; – *ATR-04, a genetically modified strain S. epidermidis for treating the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor inhibitor, or EGFRi, targeted therapy. Azitra says it intends to submit an IND for a Phase 1b clinical trial in certain cancer patients undergoing EGFRi targeted therapy by the end of 2023. Subject to FDA approval of its IND, Azitra says it expects to begin its Phase 1b clinical trial in the first half of 2024 with initial results expected in late 2024.  – *ATR-01, an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris, a chronic xerotic (abnormally dry), scaly skin disease with an estimated incidence and prevalence of 1 in 250, which suggests a total patient population of 1.3 million in the United States. Azitra says it is planning to complete lead optimization and IND-enabling studies in 2023 to support an IND filing in late 2024. Azitra, like most biotechs, has minimal revenue and a history of net losses. ALE Group Holding Limited (ALEH proposed) is included in this week’s pricing roster. This is a micro-cap IPO of 1.25 million shares at $4.00 to $6.00 to raise $6.25 million. This is a NASDAQ listing. Prime Number Capital is the sole book-runner. ALE Group Holding Limited, incorporated in the British Virgin Islands, is the issuer of the shares in the IPO. The profitable holding company conducts its business through its wholly owned subsidiary, ALE Corporate Services Ltd. (ALECS), a Hong Kong company incorporated on June 30, 2014. The subsidiary, ALECS, provides accounting and corporate consulting services to small and medium-sized businesses. Its services include financial reporting, corporate secretarial services, tax filing services and internal control reporting. “Our goal is to become a one-stop solution for all the accounting, corporate consulting, taxation and secretarial needs of small and medium enterprises operating in Asia and the U.S.,” the prospectus says. Last Full Week of May Just one micro-cap IPO – Australian online fitness equipment retailer Fitell Corp. (FTEL proposed) – is on the IPO Calendar for the week of May 22, 2023. Fitell Corp. aims to raise $15.0 million by pricing 3.0 million shares at $4.00 to $6.00. Revere Securities and R.F. Lafferty & Co. are the sole book-runners. Some IPO pros say they think that traffic may stay light until there’s some progress in Washington in talks to raise the U.S. debt ceiling. Stay tuned. (For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.) Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board.  To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message.  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 changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.