WORK Medical Technology Group LTD Announces Closing of Initial Public Offering

Rhea-AI Summary

WORK Medical Technology Group (Nasdaq: WOK), a Chinese medical device supplier, has successfully closed its initial public offering (IPO) on August 26, 2024. The company offered 2,000,000 ordinary shares at $4.00 per share, raising approximately $8.00 million in gross proceeds. Trading began on the Nasdaq Capital Market on August 23, 2024, under the ticker symbol 'WOK'. The underwriters have a 45-day option to purchase up to 300,000 additional shares. Proceeds will fund production upgrades, product development, marketing, patent purchases, and working capital. Kingswood Capital Partners, acted as the sole book-running manager for this firm commitment offering.

Positive

• Successful IPO raising approximately $8 million in gross proceeds
• Listing on Nasdaq Capital Market, potentially increasing visibility and liquidity
• 45-day option for underwriters to purchase additional shares, potentially raising more capital
• Funds allocated for production upgrades and capacity increase
• Investment in new product development and marketing

Negative

• Potential dilution of existing shareholders' value due to new share issuance
• Underwriting discounts and related expenses will reduce net proceeds
• Increased regulatory scrutiny and compliance costs associated with being a public company

Insights

Financial Analyst

WORK Medical Technology Group's IPO marks a significant milestone, raising $8 million at $4 per share. This capital injection will fuel the company's growth strategies, including production upgrades and new product development. However, the relatively small offering size suggests initial investor interest or a conservative approach by the company.

The firm commitment underwriting structure indicates confidence in the offering, but investors should note the potential 15% dilution if the over-allotment option is fully exercised. The diverse allocation of proceeds across production, R&D and marketing demonstrates a balanced growth strategy, which could position WORK well in the competitive medical device market in China.

Market Research Analyst

WORK's IPO reflects growing interest in China's medical device sector, driven by an aging population and healthcare reforms. However, entering the U.S. market via Nasdaq exposes WORK to heightened regulatory scrutiny and geopolitical risks, which could impact investor sentiment.

The company's focus on masks and medical consumables aligns with post-pandemic market trends, but competition is fierce. WORK's success will hinge on its ability to innovate and differentiate its products. The planned investment in patents could be important for building a defensible market position. Investors should monitor WORK's ability to execute its growth strategy and navigate the complex regulatory landscape in both China and the U.S.

Hangzhou, China, Aug. 26, 2024 (GLOBE NEWSWIRE) -- WORK Medical Technology Group LTD (Nasdaq: WOK) (the "Company"), a supplier of medical devices in China, today announced the closing of the initial public offering (the "Offering") of its 2,000,000 ordinary shares at a public offering price of US$4.00 per ordinary share. The ordinary shares commenced trading on the Nasdaq Capital Market on August 23, 2024 under the ticker symbol "WOK."

The gross proceeds of the Offering were approximately US$8.00 million, before deducting underwriting discounts and other related expenses. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 300,000 ordinary shares to cover over-allotments, if any, at the public offering price, less the underwriting discount.

Proceeds from the Offering will be used for (i) upgrading production equipment and increasing production capacity, (ii) developing masks, other medical consumables and medical devices, (iii) product marketing, (iv) patent purchases, and (v) working capital and other general corporate purposes.

The Offering was conducted on a “firm commitment” basis. Kingswood Capital Partners, LLC ("Kingswood") acted as the sole book running manager for the Offering. Hunter Taubman Fischer & Li LLC acted as U.S. counsel to the Company, and Ortoli Rosenstadt LLP acted as U.S. counsel to Kingswood in connection with the Offering.

A registration statement on Form F-1 relating to the Offering was filed with the U.S. Securities and Exchange Commission (the "SEC") (File Number: 333-271474) and was declared effective by the SEC on August 22, 2024. The Offering was made only by means of a prospectus, forming a part of the registration statement relating to the Offering. Copies of the final prospectus relating to the Offering may be obtained from Kingswood at: 7280 W Palmetto Park Rd. Suite 301, Boca Raton, FL 33433, or by email at lciervo@kingswoodus.com, or by telephone at +1-800-535-6981. In addition, a copy of the prospectus relating to the Offering may be obtained via the SEC’s website at www.sec.gov.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy any of the Company's securities, nor shall there be any offer, solicitation or sale of any of the Company's securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About WORK Medical Technology Group LTD

WORK Medical Technology Group LTD is a supplier of medical devices that develops and manufactures Class I and II medical devices and sells Class I and II disposable medical devices through operating subsidiaries in China. The Company has a diverse product portfolio comprising 21 products including customized and multifunctional masks and other medical consumables. All the products have been sold in 34 provincial-level administrative regions in China, with 15 of them sold in more than 30 countries worldwide. The Company received a number of quality-related manufacturing designations and registered 17 products with the U.S. Food and Drug Administration allowing their products to enter the U.S. market. For more information, please visit the Company’s website: https://www.workmedtech.com/corporate.

Forward-Looking Statements

This press release contains forward-looking statements, including statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as "aims," "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "intends," "may," "plans," "possible," "potential," "seeks," "will," and variations of these words or similar expressions that are intended to identify forward-looking statements. Any such statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements.

Any forward-looking statements in this press release are based on the Company’s current expectations, estimates and projections only as of the date of this release and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results set forth in the Company's registration statement on Form F-1 and other documents filed by the Company with the SEC. The Company explicitly disclaims any obligation to update any forward-looking statements except to the extent required by law.

For more information, please contact:

WORK Medical Technology Group LTD
Investor Relations Department
Email: ir@workmedtech.com

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

FAQ

What was the IPO price for WORK Medical Technology Group (WOK) shares?

The initial public offering price for WORK Medical Technology Group (WOK) shares was $4.00 per ordinary share.

How many shares did WORK Medical Technology Group (WOK) offer in its IPO?

WORK Medical Technology Group (WOK) offered 2,000,000 ordinary shares in its initial public offering.

When did WORK Medical Technology Group (WOK) start trading on Nasdaq?

WORK Medical Technology Group (WOK) commenced trading on the Nasdaq Capital Market on August 23, 2024.

How much did WORK Medical Technology Group (WOK) raise in its IPO?

WORK Medical Technology Group (WOK) raised approximately $8.00 million in gross proceeds from its initial public offering.

What will WORK Medical Technology Group (WOK) use the IPO proceeds for?

WORK Medical Technology Group (WOK) will use the IPO proceeds for upgrading production equipment, increasing production capacity, developing new products, marketing, patent purchases, and working capital.