October 21, 2013
David Bukzin, Partner-In-Charge, New York City Office, Featured in Opalesque Article "Microcap Monitor: Microcap Activity on the Rise"
“We’re seeing more Microcap transactional business than we’ve seen in five years,” David Bukzin, Partner at Marcum tells Private Equity Strategies, in a conversation about Microcap companies. “We’re seeing that activity across all types of transactions, IPOs, SPACs.” Bukzin works with a number of Microcap companies and private equity firms as an accountant for Marcum.
“The markets have gotten to a level where the recovery is starting to trickle down to the smaller companies. Microcap companies are the last to see the upside and the first to feel any backslide.” In our last Microcap Monitor in June, we highlighted DelMar Pharmaceuticals, a company that is working on clinical trials for an orphan disease efractory glioblastoma multiforme (GBM), the most common type of aggressive brain cancer. At that time, life sciences companies as a group were popular with investors and they still are. According to Bukzin, life sciences and technology companies continue to dominate investor interest.
“The Microcap IPO market is coming back,” he says. “These IPOs are companies with under $500 million in market value, and are in these sectors. We’re even hearing rumblings that people are exploring China again. They are looking at what companies want to go public now that a lot of them have gone dark.”
He notes that recent changes in regulation like those to Sarbanes-Oxley have improved the options for Microcap companies. The JOBS Act is also playing a limited role in terms of marketing. “Some of the companies going public now are taking advantage of the JOBS Act, but it really has had little to no effect when it comes to gaining access to capital. What has helped are the changes to Sarbanes-Oxley. Regulations overall, are a balancing act. I think SARBOX was actually helpful in many ways. But the way they’re writing some of these crowdfunding rules, they can open you up to fraud.”