IPO Outlook: LSDI, QSG

Here are some of the IPOs widely slated for the week ahead:

Lucy Scientific Discovery

This company is joining the NASDAQ index under the ticker symbol LSDI, with an offering of 2 million shares of common stock. The company estimates that the price will be approximately $4 per share.

What is Lucy Scientific Discovery?

Lucy Scientific Discovery is into psychotropic drugs. This is a category that includes everything from alcohol, caffeine and nicotine, to marijuana, LSD, cocaine, and amphetamines.

The company is an early-stage psychotropics contract manufacturing company focused on becoming the premier contract research, development, and manufacturing organization for the emerging psychotropics-based medicines industry.

The company has a Controlled Drugs and Substances Dealer’s Licence under Part J of the Food and Drug Regulations promulgated under the Food and Drugs Act (Canada). The Dealer’s Licence authorizes the company to produce, assemble, sell, provide, transport, send, deliver, import or export certain pharmaceutical-grade active pharmaceutical ingredients used in controlled substances and their raw material precursors.

Subject to receipt of further approvals by Health Canada, the company says its mission is to make its products and research services available to clients for the development of medicines and experimental therapies to address certain psychiatric health disorders and other medical needs.

The company has yet to generate any revenues. However, it has a 25,000 square foot facility located near Victoria, British Columbia, for research, development and large-scale production of high-quality biological raw materials, APIs and finished biopharmaceutical products.

Who is Leading the LSDI IPO?

WestPark Capital are managing Lucy Scientific Discovery’s listing.

LSDI IPO Use of Proceeds

Lucy Scientific Discovery’s prospectus states that the principal purposes of this offering are to obtain additional capital to fund research and development, to create a public market for its common shares and to facilitate future access to the public equity markets.

The company says it will use the net proceeds from this offering as follows:

Approximately $0.3m to repay indebtedness.
Around $2.2m to complete the buildout of and make certain upgrades to manufacturing and research facilities.
$1.5m to satisfy certain outstanding liabilities.
The remainder for working capital and other general corporate purposes, including the additional costs associated with being a public company.

QuantaSing Group

This business is joining the NASDAQ under the ticker symbol QSG, with a listing of 3,250,000 American Depositary Shares. The business says it anticipates the initial public offering price per ADS will be between $11.50 and $13.50.

What is QuantaSing Group?

Education and development are the name of the game for QuantaSing.

The company claims to be the largest online learning service provider in China’s adult learning market for personal interest courses and among the top five service providers in China’s total adult learning market, in terms of revenue in 2021.

QuantaSing aims to provide easy-to-understand, affordable and accessible online courses to adult learners under various brands. The subject matters of these courses include financial literacy, with the company having identified this as a particular opportunity due to the lack of personal finance skill and awareness among the Chinese population.

As of 30 November 2022, the business had accumulated approximately 75.1 million registered users, quadrupling from 17.0 million as of 30 June 2021. For the fiscal year ended 30 June 2022, the business had attracted around 1.1 million paying learners, representing a 37.5% increase from 0.8 million for the fiscal year ended 30 June 2021.

Looking to the future, the business says it intends to pursue the following goals:

Growth of its user base and increased learner engagement.
Enrichment of course offerings with proven demand.
Development of enterprise services to achieve greater synergy.
Investment in technology and data analytics.
Attract and cultivate talent.
Expand overseas and pursue strategic collaborations.

Who is Leading the QSG IPO?

The listing is being headed by Tiger Brokers, CICC and Citigroup.

QSG IPO Use of Proceeds

The company says it plans to use the proceeds as follows:

Approximately 30% for improving learning experiences and content development capabilities.
Approximately 20% for broadening service offerings and expanding services overseas.
Around 20% for improving technology infrastructure.
Approximately 20% for marketing and brand promotion.
The remaining 10% for general corporate purposes and working capital.