After a barrage of IPOs over the last few weeks, including a couple of mainstream IPOs that managed to hold their own, and a handful of high-flying debuts of the lesser-known, low-float nature from the usual class of underwriters who generally bring us a mixed bag of offerings, we have hit a week where the calendar offers little in the way of IPO trades.

An uplisting already snuck onto the market with little fanfare in the form of SOBR, and failed to deliver much of a pop, and once unflappable Boustead Securities delivered yet another busted debut in the form of ASNS: threatening to tarnish their once seemingly magical ability to produce low-float IPOs that ran simply based on the underwriter’s cache alone.

Looking more deeply into the undercurrent of the market, we can see that weakened demand for fresh IPO offerings is a reflection of general apathy in the market. Once highly anticipated as inevitable IPO candidates, companies like Stripe, Epic Games, Databricks, Airtable, and others that were highly anticipated just a few months ago seem to have missed the boat on the opportunity to have raised capital from the public markets on highly inflated revenue multiples that continue to compress with each announcement from the Fed related to interest rates and inflation.

Having said that, when the market is weak, those IPOs that do debut become focal points for day traders, and when combined with the right combination of low float and ‘strategic’ allocation of shares, provide opportunities for tremendous upside potential. We’re keeping an eye on all IPOs to look for these golden opportunities (AUST), and watching out for the pitfalls to avoid (EDBL| ASNS).

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This Week’s IPOs:

• OKYO Pharma (OKYO) – May , 2022 | 625k Shares

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Ok, Let’s jump in:

OKYO Pharma (OKYO) – May 17, 2022 | 625k shares
Price: $4.00
Offering Size: $2.5M
Shares Outstanding: 22M

Industry: Biotech

Overview: This has been rescheduled from last week, and reduced from a potential $10M offering of 961k shares at a mid-point price target of $5.50. The company itself is a British pre-clinical biotech with a pipeline of candidates that address inflammatory eye diseases and ocular pain: examples include a treatment for dry eye that is poised to enter Phase I testing.

Considerations: “The float on this one is so low that it appears to be almost begging day traders to pile in, and the price certainly invites speculation, so it could be interesting just on the setup alone.”
That’s what I wrote last week, and now they’ve decreased their float by roughly 30% since then, so it appears that they don’t really care as much about raising money from this IPO as they do about simply getting their stock listed on the NASDAQ at any cost.

According to the prospectus, their lead candidate could skip Phase I safety trails and proceed to Phase 2 by the end of 2022: which would present a clear catalyst for an upside move if (when) this stock drops from the IPO price.

There’s enough sketchiness in the F-1 filing to make me take pause and wonder if this one is going to set up a constrained float debut is forced through multiple upward halts until it reaches a ludicrous price point where insiders can offload their shares ahead of a normal lockup period.

Growth Numbers: none

Baseline Financials: none

Notes from the F-1:
– We were originally incorporated in the British Virgin Islands as a British Virgin Islands Business Company on July 4, 2007 under the BVI Business Companies Act 2004 with company number 1415559 under the name Jellon Enterprises, Inc.. Our legal and commercial name was changed to Minor Metals & Mining, Inc. on October 24, 2007, to Emerging Metals Limited on November 28, 2007, to West African Minerals Corporation on December 9, 2011, and to OKYO Pharma Corporation on January 10, 2018. On March 9, 2018, shareholders approved the cancellation of our AIM listing and migration to Guernsey.
I mean, this sounds super sketchy, but perhaps as a shell company it makes sense?
– Our website address is www.okyopharma.com. The reference to our website is an inactive textual reference only and the information contained in, or that can be accessed through, our website is not a part of this registration statement.
So what you’re saying is, you have a website, but the information on the website is possibly not accurate?

Underwriters: Think Equity

IPO Classification: Ultra Low Float ( about as low a float as I’ve seen), and now it’s even lower.

Recent Similar IPOs: LCFY AERC AUST

Trading Strategy: This is such a low float that it will be interesting to watch where it opens. If it gets pumped up to a small debut premium, it could be ready to run. Last week I stated that an opening print above $10 would be unlikely to sustain a further run, but now I’m not so sure. It would be tough to justify a debut buy much higher than that with anything other than gambling money, but if retail allocations are minimal (like, less than 10 shares) and opening volume is notably low, then this cold setup a pump situation like AERC.

Brand Name Recognition: Low.

Debut Trade Conviction Level: Moderate but interested.

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Lockup Period Expiration (LPX) Watch:

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Most IPOs are subject to a 180 day lockup period before insiders and shareholders who owned shares of a company prior to the IPO can sell their positions. Typically, the dilutionary effect of this event will cause a stock price to drop, as supply increases without any fundamental changes in the value of the underlying company. Many investors will wait for LPX before starting a long term position in a company.

LPX for the Week of May 16, 2022

Snow Lake Resources Ltd. (LITM)
– LPX Date: May 18, 2022
– LPX Period: 6 Month
– IPO Date: November 19, 2021
– IPO Price: $7.50
– Exercise Price of Common Shares: 110% of IPO = $9.90
– Secondary Offering Exercise Price: no exercise price stated – Effective 7 April, 2022
No lock-up on secondary, registered as ‘selling shareholders’
Notes: also has 12 mo lock-up for directors and officers
– Reference 424B3 dated 11 April 2022

Advanced Human Imaging Ltd (AHI)
– LPX Date: May 18, 2022
– LPX Period: 6 Month
– IPO Date: November 19, 2021
– IPO Price: $10.50
– Exercise Price of Common Shares: wx $5.52 and Rep wx $6.29
– Secondary Offering Exercise Price: no secondary
Notes: Original units separable immediately and warrants could be sold at $5.52
– Reference 424B4 11 November 2021

For a full list of IPOs and Uplist LPX dates and video reviews

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NOTE: this is not financial advice, and I am not a financial advisor: this information is just my opinion and is for informational purposes only. I may have or take positions in the equities mentioned in this article in the next 72 hours. Trading equities is risky. Do your own research,and trade your own trade.