AR Game Developer Blue Hat Seeks $18 Million IPO in New York
The Xiamen-based game operator, which uses augmented reality, reported revenue of $9.6 million and income of $3.3 million for the first nine months of last year.
Seeking to raise $18 million in an initial public offering on the Nasdaq Capital Market is Blue Hat Interactive Entertainment Technology, a developer of augmented reality (AR) interactive games and toys.
Based in Xiamen, the company said in its preliminary prospectus filed today with the U.S. Securities and Exchange Commission that it planned to sell 4.5 million American depositary shares at $4 apiece.
Blue Hat operates an online entertainment platform that aims to create a unique experience for players by integrating real objects and virtual scenery into entertaining and education-oriented games.
"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," the company stated.
For the nine months through September, Blue Hat reported revenue of $9.6 million, an increase of 52 percent year-over-year. It had net income of $3.3 million, or 10 cents per share, compared with $1.8 million, or 6 cents per share, for the same nine months in 2017. It had 33 million shares outstanding as of Sept. 30.
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.
As its primary user base, Blue Hat targets China's youth from age 3 to 23. Its primary interactive AR products are AR Racer, AR Need a Spanking, AR 3D Magic Box and AR Picture Book.
Blue Hat said it intends to use the proceeds of its stock offering for research and development, selling and marketing, and working capital and general corporate purposes.
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.
The deal is to be underwritten by ViewTrade Securities Inc. The IPO proceeds could increase to $20.7 million if the underwriter purchases additional shares for over-allotments, according to the filing.
The company has applied to trade its shares under "BHAT" in New York.