Blue Hat Raises $8 Million in New York IPO; Stock Surges 15% on Debut
The stock in Blue Hat Interactive Entertainment Technology (Nasdaq: BHAT) soared 15 percent above issue price on its debut Friday, as the AR games company raised $8 million in its initial public offering.
The Xiamen-based company sold 2 million ordinary shares at $4 apiece and enjoyed a jump to $4.58 by close of the trading day.
Founded in 2010, Blue Hat produces augmented reality interactive entertainment games and toys, including interactive educational materials, mobile games and toys with mobile game features. It currently offers four primary AR interactive product lines of AR Racer of car-racing mobile game, AR Need a Spanking of a combat game, AR 3D Magic Box to transport children’s drawings into diverse backgrounds and AR Picture Book for education.
The company reported revenue of $9.6 million for the nine months through September in 2018, up 52 percent from that period of 2017. Its net income for the same period reached $2 million, or 10 cents per share, down 14 percent from $2.3 million in 2017.
In March, the company said in its preliminary prospectus filed with the U.S. Securities and Exchange Commission that it planned to sell 4.5 million shares at $4 apiece, then downsized the proposed deal.
“Our goal is to create a rich visual and interactive environment for users through the integration of real objects and virtual scenery. We believe this combination provides users with a more natural form of human-computer interaction and enhances users’ perception of reality, thus providing a more diversified entertainment experience,” Blue Hat said in its prospectus.
As of Jan. 31, its intellectual property (IP) portfolio included "161 authorized patents, 40 patents in various stages of the patent application process, 14 applications for Patent Cooperation Treaty, or PCT, international patents, 56 registered trademarks, 645 copyrights for art work and 25 software copyrights," it said.
The company also said that this year, it plans to expand its e-commerce sales team and to operate flagship stores via large online retailers, such as Amazon.com Inc. (Nasdaq: AMZN), Alibaba Group Holding Ltd.'s (NYSE: BABA) Tmall.com and Taobao.com, and JD.com Inc. (Nasdaq: JD), to further penetrate the market.
Blue Hat said it plans to use 40 percent of the IPO proceeds for research and development, 40 percent for sales and marketing and establishing physical experience stores and the remainder for working capital and general corporate purposes.
Underwriting the deal was ViewTrade Securities Inc.