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NEWS: With new product, medical device firm moving to go public, PBN
Clynton Namuo, Pacific Business News. Honolulu-based Hoana Medical is preparing to go public after closing out its third round of financing, raising more than $10 million.
"We need to be IPO-ready into the first half of next year," Hoana CEO Patrick Sullivan told PBN.
Sullivan declined to say precisely when Hoana may issue an initial public offering or how much money it would be looking to raise.
Technology and venture capital executives are hopeful that another IPO from a Hawaii company could build investor confidence in local companies and spur more financing by venture capitalists. Despite the success of a growing roster of Hawaii tech startups, finding money is still a challenge.
In August, fuel cell membrane developer Hoku Scientific of Kapolei issued an IPO and its stock price has gradually risen. The emergence of another Hawaii technology company like Hoana may be a signal that the technology industry here is beginning to mature, with companies entering later stages of development and raising the prospects for other IPOs and acquisitions.
To ready itself, Hoana plans to hire a chief financial officer, add people experienced with publicly traded companies to its board, including venture capitalist Barry Weinman, and prepare to make its financials more transparent.
"The idea is to start building the board as though it's a public company board," Sullivan said.
Hoana makes a medical device, called the LG1 intelligent medical vigilance system, that can monitor a patient's vital signs and alert caregivers to problems without being physically hooked up to the patient. The U.S. Food and Drug Administration is expected to approve the device for sale next month, at which point Hoana expects to grow rapidly.
In anticipation of FDA approval, Hoana has begun assembling an experienced team to ramp up national sales.
Sullivan said Hoana is looking at a number of ways to make money from the LG1 other than simply selling them to hospitals. Those include both a service revenue model where Hoana makes its money servicing the machines and a usage model where hospitals would pay for the LG1 based on how much it is actually used. Sullivan declined to give even a ballpark figure on the cost of the machines, though he said they would be affordable for the hospitals and health-care companies to whom they will be marketed.
Hoana has 25 employees at its Honolulu headquarters and five at its San Francisco Bay area sales office. Sullivan said he plans to keep Hoana's headquarters and its research and development operations in Hawaii while building its sales office on the Mainland. The LG1 is currently being manufactured in California by another company, but Sullivan said eventually he plans to set up manufacturing in Asia, where it's cheaper.
Sullivan said he has been visiting medical device trade shows and the demand for Hoana's LG1 has been "huge." He said that during clinical trials, the device helped save the life of one person.
He declined to say when and where that happened, but Hoana tested the LG1 in clinical trials at Kaiser Permanente's Moanalua Medical Center and the Tripler Army Medical Center.
Hoana recently finished its Series-C round of financing, raising $10.2 million. Sullivan said he turned away additional money from investors looking to buy into the company before it went big.
The lead investor was Tokyo-based Global Venture Capital and Hoana also took in money from institutional and angel investors in Hong Kong, Singapore, California and Hawaii. Local corporate investors include ABC Stores and Servco Pacific Inc.
It will use the money raised to prepare to market and sell the LG1, as well as to put finishing touches on the device.
Local technology executives already are excited by the prospect of another Hawaii IPO.
Carnet Williams, executive director of technology mentoring firm HiBeam, said more Hawaii IPOs will create wealth in the islands and allow for further investment. Many of Silicon Valley's most successful venture capitalists either started as small investors or earned their money by building companies and taking them public, using the money they made to invest in other companies.
"It has a really great trickle-across effect, where the capital formation in the angel investor hands will allow them to invest in more startup companies," Williams said. "These are the types of companies that really help with capital formation."
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Sullivan declined to say precisely when Hoana may issue an initial public offering or how much money it would be looking to raise. 
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Oceanit’s first iPhone application is an experiment in commercial software application development. It is also in line with our core values of having fun and staying on the bleeding edge of development. iFu pays homage to the Kung Fu movies of the past. Re-live your old Kung Fu movies by using the accelerometer to bust out your best moves and listening to what happens. Taunt and do your own poor lip-synching by tapping two fingers anywhere on the screen. Get ready to release some stress with your Kung Fu master. 
