PogoTec Inc. is the latest Orange County firm pursuing a mini initial public offering—formally known as a Regulation A+ offering, or Reg A+. It seeks to sell 900,000 to 2.9 million shares at $11 apiece and raise $10 million to $32 million. The cash will pay down debt and pursue further development, manufacturing and marketing of a camera that magnetically clips to eyeglasses—think GoPro’s smaller, younger cousin.
PogoTec is registered in Roanoke, Va., a relic of its founding, it said, and is headquartered in Newport Beach. Three C-suite executives are here, including Chief Executive Brendan Sheil, one of nine full-timers, and 11 contractors.
It makes several Pogo products, including a track, a connector and the camera. The system works to enable what-you-see-is-what-you-shoot photos.
Eyeglass frame makers or distributors ClearVision Optical Co. Inc., Essilor International SA-owned FGX International and Argus Vision have licensed PogoTec tech to produce products, a Securities and Exchange Commission filing shows.
The company plans to continue licensing and to develop “a proprietary platform on eyewear,” the filing said.
Sheil said PogoTec controls 168 patents and plans augmented reality work. “We’re an intellectual property company, not just consumer-facing.”
Chief Commercial Officer Joshua Schoenbart said in a press release that PogoTec “plans to enhance people’s lives while preserving consumer style preferences.”
Low Marks
Reg A+ offerings are allowed by a 2012 federal law and 2015 SEC rules. Firms can raise up to $50 million.
The first three were in June—two in OC: electric vehicle drivetrain maker Adomani Inc., now in Corona, and app-based temporary worker provider ShiftPixy Inc. in Irvine.
Adomani priced 2.5 million shares at $5 on June 15. It traded last week at $1.30 and a $93 million market cap.
ShiftPixy priced 2 million shares at $6 on June 27 and traded last week at $2.60 and a $74 million market cap.
London-based Dealogic shows 11 Reg A+ IPOs have gone to market, raising $196 million. Ten have declined 30% to 76% in share price through March 6.
ShiftPixy said on March 7 that it will use blockchain “as a digital ledger for all human capital transactions.”
Its stock closed up 66%.
Experience
“Early-stage companies take time to mature,” said Robert Malin, partner and head of capital markets at W.R. Hambrecht & Co., the San Francisco-based underwriter for PogoTec and several other Reg A+ IPOs.
“They’ve been overvalued for the most part,” Sheil said of other offerings.
PogoTec’s pre-money valuation is $86 million—others have gone forth in the low nine figures. A fully subscribed offering will sell a quarter of the company to the public and, at $11, have a market cap of $120 million.
Sheil and founder Ronald Blum will own 39% of PogoTec. Both have worked for, founded, led or consulted to eye products companies.
PogoTec sold 6,000 cameras from mid-November to Jan. 31 for revenue of $814,000. It has 60,000 cameras in inventory, and its contract manufacturer can make 20,000 a week, Sheil said.
About $15 million of its $17 million in debt matures in three years.
PogoTec is also crowdsourcing the offering at Fundable.com.
