ShotSpotter (SSTI), a company that uses sensors and software to detect gunfire for law enforcement and security services, saw solid demand for its new issues after it raised $30.8 million with its initial public offering.
The company priced 2.8 million shares at $11 per share, the midpoint of the expected range.
The stock hit a high of $13.35 after it started trading before settling down near $12.60. That’s still a 14% pop on its opening day, so far.
The company is not currently profitable, but revenue is rising.
The top line rose to $15.5 million in 2016 from $11.8 million in 2015. For the first quarter 2017, revenue rose to $4.7 million from $3 million in the same quarter a year ago.
Around 99% of revenue comes from its service to cities and municipalities, ShotSpotter Flex.
The company’s net loss widened to $6.86 in 2016 from $6.19 the year before. It has an accumulated deficit of $89.2 million as of March 31, 2017.
One concern about the business model is how much the company is relying on the budgets of cities and municipalities. ShotSpotter also had no long-term contracts with its supplies, but said that “a significant portion of the components required by our solutions is available off the shelf.”
“Our mission is to help prevent and reduce the societal costs of gun violence, thereby creating safer and more vibrant communities,” the company said. “We are committed to developing comprehensive, respectful and engaged partnerships with law enforcement agencies, elected officials and communities focused on making a positive difference in our society.”
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