BlackStratus announces IPO

PRESS RELEASE - BlackStratus sets IPO

BlackStratus, which provides software that centralizes computer security notifications from firewalls, anti-virus programs and other sources, filed on Monday with the SEC to raise up to $20 million in an initial public offering. The company's solution presents security events in graphical form, allowing IT professionals to quickly identify and respond to threats. BlackStratus also offers an appliance (21% of sales) that stores security event logs for auditing purposes.

Sales fell 22% to $9.2 million in 2011, while the net loss narrowed to $1.4 million. The decline in sales was attributed to a major customer purchasing its solution in 2010. We note that BlackStratus is the first company to release only two years of audited financial statements under the JOBS Act. The auditor, EisnerAmper, expressed doubts about the company's ability to continue as a going concern.

The Piscataway, NJ-based company, which was founded in 1999, plans to list on the NASDAQ under the symbol BLKS. Venture capital backers include Storm Ventures Funds (53% pre-IPO stake) and Dawntreader Funds (30%). Aegis Capital is the lead underwriter on the deal.