A Charlotte-area technology firm that manufactures frequency filters for smartphones said on Tuesday that it went public after raising $5.3 million in private money.
Akoustis Technologies, Inc., founded last year and headquartered in Huntersville, makes radio frequency filters with a patented technology it says will reduce overheating and enable longer battery life in smartphones. The firm sold 3.5 million shares of stock at $1.50 per share, resulting in $5.3 million in proceeds to the company after filing an alternative public offering (APO), said Dave Aichele, Akoustis’ vice president of business development.
By Friday, the firm, using the ticker symbol “AKTS,” will start trading stock on the QB Tier, an over-the-counter marketplace in which stock is traded off a centralized exchange, like the Nasdaq or New York Stock Exchange, and deals with fewer regulations.
Oftentimes, companies seeking to go public file an initial public offering, which is the first sale of stock by a company to the public. But they can also choose another, more unconventional method: An APO, a means of combining a reverse merger into a public shell company with a private investment into a public entity.
Some skeptics warn that APOs are risky. Bob Donlon, an attorney with Horack Talley who represents businesses and entrepreneurs, said the level of liquidity (how easy it is to buy and sell shares) is not very high.
“Because there isn’t a lot of trading and high volume, there are certain people that are interested in the stock who will buy and move the price up a little bit and then sell,” he said.
But after acquiring a defunct shell company that developed mobile phone games, Akoutsis filed the APO as a way of growing capital without relying on venture capital investment, which would have made the company beholden to the venture capitalists, said Jeff Shealy, Akoutsis CEO.
“It is a type of financing transaction,” Shealy said. “It allows us to have the growth capital we need to develop our business. It’s not an exit for us. It’s a banking instrument.”
The firm raised $5.3 million from private investors, including United Kingdom-based investment firm Montrose Capital Partners, to hire engineers, chemists, technicians and sales and marketing staff. Currently, the firm employs 10 people but, within a year, expects to grow its workforce to at least 100, Aichele said.
Right now, its products are in the research and development stage, he said. By 2016, the company hopes to put the technology on the market.