Behind Greensboro-based Guerrilla RF’s $7 million ‘reverse merger’ deal

Behind Greensboro-based Guerrilla RF's $7 million 'reverse merger' deal


GREENSBORO – Earlier this week, Guerilla RF announced that it completed a reverse merger transaction, raising $7 million in private funding in the process of becoming a publicly-traded company.  The Greensboro-based firm noted in a statement issued earlier this week that the company is experiencing rapid growth.

WRAL TechWire went behind the deal with Jim Ahne, the company’s vice president of marketing, with whom we spoke about the deal, the company, and its future.

 

WRAL TechWire: The company raised $7 million in the reverse merger transaction – how will those funds be allocated and invested?

Guerrilla RF: Guerrilla RF will use the raised funds to grow our resources for product research and development, sales, and marketing.  Accordingly, using the funds will increase our operating and non-operating expenses – mainly in additional employee headcount and capital investments in research and development.

WRAL TechWire: Is company hiring at this time? 

Guerrilla RF: Yes, we are hiring, primarily for positions at our Greensboro, NC operating headquarters.  We are hiring in several different roles, but mostly in our functional roles for engineering.  We plan to add at least ten employees by the end of 2021 and another 40 employees by the end of 2022, depending on our ability to hire the expertise we are seeking in a tough job market for employers.

Greensboro’s Guerrilla RF raises $7M, completes ‘reverse merger’ to take company public

WRAL TechWire: The company previously stated that its experienced sales growth of 990% in last three years – how does 2021 compare?

Guerrilla RF: We anticipate continued sales growth in 2021; however, the global economic environment has been notably unpredictable this past year due to the COVID-19 pandemic and its widespread effects in the marketplace.

WRAL TechWire: What’s the current state of the semiconductor market – and what is this market’s immediate and mid-term and long-term future?

Guerrilla RF: The semiconductor market is exceptionally robust right now.  There are well-publicized supply chain challenges in the semiconductor market, but we anticipate those challenges to continue being mitigated and, hopefully, resolved in 2022.  The semiconductor market’s mid- and long-term future looks very bright.  Semiconductor products are used in seemingly every aspect of how humankind lives and functions, as many people have become acutely aware of lately.  The pervasiveness of our dependency on these products is at an all-time high, and the resulting rate of semiconductor consumption does not appear to be slowing down – especially within the wireless communications space.

WRAL TechWire: How’d the reverse merger deal come together?

Guerrilla RF: We were looking for an effective way to raise capital to aid in funding our growth, and raising capital via private investments seemed unproductive for semiconductor companies.  Therefore, we explored several capital-raising options in the first half of 2021 via the public markets rather than private investments. We concluded that an alternative public offering (APO) via a reverse merger was the appropriate capital-raising pathway for Guerrilla RF.  We were introduced to ownership of Laffin Acquisition Corp., Montrose Capital Partners, through a mutual friend and investor.  After evaluating the reverse merger process with Laffin, the deal timeline and capital-raise potential were very attractive to us, so we decided to proceed with the APO over the summer of 2021.

Greensboro-based Guerrilla RF raises $1.6M from 14 investors

WRAL TechWire: Will all executive team and board members retain their role?  Any new additions?

Guerrilla RF: Yes, all legacy Guerrilla RF executives and members of our Board of Directors remain in their roles.  As we invest in our business through the APO, we will be seeking certain executive staff augmentation and perhaps Board member growth.  Being a public company adds new functional and administrative responsibilities, and we will fulfill these roles by adding to our team and leadership accordingly.

WRAL TechWire: Why go public through reverse merger this way?  What are the pros and cons to this approach?

Guerrilla RF: An APO via a reverse merger is advantageous since it allows a company to raise capital quickly, and because the deal size doesn’t have to be as large as in an IPO.  A drawback of this approach is that we cannot be immediately listed on a major stock exchange like NASDAQ.  We first need to “season” as a company to be able to get uplisted to one of the major exchanges. This “seasoning” process includes submitting requisite and timely financial statement filings with the U.S. Securities and Exchange Commission, disclosing quarterly financial results and one annual set of financial statements. It is anticipated that this process will take approximately one year to complete.  Our company stock will trade on the OTCQB market initially, which will likely lead to low trading volumes in the beginning for our stock.

Telecom startup Guerrilla RF raises $1.8 million in equity and options

WRAL TechWire: What else is important to note at this time?

Guerrilla RF: We are excited to have this capital-raise achievement behind us and look forward to what the future will bring for Guerrilla RF!  Guerrilla RF is proud to be a corporate citizen incepted and based in North Carolina.





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Kassie Hoffman
Kassie pens down all the news from the world of politics on ANH.