WORK Medical Technology Group LTD Announces Partial Exercise of Underwriters’ Over-Allotment Option

Rhea-AI Summary

WORK Medical Technology Group (Nasdaq: WOK), a Chinese medical device supplier, announced the partial exercise of the underwriter's over-allotment option for its initial public offering. This resulted in the sale of an additional 91,942 ordinary shares at $4.00 per share. The total shares sold increased to 2,091,942, raising gross proceeds to approximately $8.37 million. The option closing date was August 29, 2024, with trading on Nasdaq Capital Market beginning on August 23, 2024. Proceeds will fund production upgrades, product development, marketing, patent purchases, and working capital. Kingswood Capital Partners, acted as the sole book running manager for the offering conducted on a 'firm commitment' basis.

Positive

• Successful partial exercise of over-allotment option, increasing total shares sold
• Gross proceeds increased to approximately $8.37 million
• Listing on Nasdaq Capital Market achieved
• Funds allocated for production upgrades and capacity increase
• Investment in new product development and marketing

Negative

• Potential dilution of existing shareholders due to additional shares issued

Insights

Financial Analyst

The partial exercise of the over-allotment option by WORK Medical Technology Group's underwriter is a positive signal for investor confidence. The additional $367,768 raised brings the total gross proceeds to $8.37 million, providing more capital for the company's growth initiatives. However, the relatively small size of the IPO and partial exercise suggest cautious optimism from investors. The $4.00 per share price and Nasdaq Capital Market listing indicate this is a small-cap offering, which typically carries higher risk. Investors should closely monitor how effectively the company utilizes the proceeds for its stated purposes, particularly in upgrading production capacity and developing new products, as these will be important for future growth and profitability in the competitive medical device market.

Medical Research Analyst

WORK Medical Technology Group's focus on upgrading production equipment and developing new medical consumables and devices is strategically sound in China's rapidly growing healthcare market. The company's plans to invest in mask production and other medical consumables could be particularly timely, given the ongoing global demand for such products. However, the relatively modest IPO proceeds may limit the scope and impact of these initiatives. The company's success will largely depend on its ability to innovate and differentiate its products in a crowded market. Investors should watch for upcoming product announcements and any partnerships or collaborations that could enhance the company's research and development capabilities.

Market Research Analyst

The timing of WORK Medical Technology Group's IPO is intriguing, given the current volatility in global markets and investor caution towards Chinese companies. The successful listing and partial exercise of the over-allotment option suggest there's still appetite for Chinese healthcare stocks, despite geopolitical tensions. However, the modest size of the offering may limit institutional investor interest and potential market liquidity. The company's focus on the Chinese market could be both a strength and a weakness; while it taps into a large and growing healthcare sector, it also exposes investors to regulatory risks specific to China. Investors should closely monitor the stock's performance in its first few months of trading to gauge market sentiment and potential for long-term growth.

Hangzhou, China, Aug. 29, 2024 (GLOBE NEWSWIRE) -- WORK Medical Technology Group LTD (Nasdaq: WOK) (the “Company”), a supplier of medical devices in China, today announced the underwriter of its initial public offering (the "Offering") has partially exercised its over-allotment option to purchase an additional 91,942 ordinary shares at the public offering price of US$4.00 per share. After giving effect to the partial exercise of the over-allotment option, the total number of ordinary shares sold by the Company in the public offering increased to 2,091,942 ordinary shares and the gross proceeds increased to approximately $8.37 million, before deducting underwriting discounts and offering expenses payable by the Company. The option closing date was August 29, 2024. The ordinary shares began trading on the Nasdaq Capital Market on August 23, 2024, under the ticker symbol “WOK.”

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 has received a number of quality-related manufacturing designations and has 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

How many additional shares did WORK Medical Technology Group (WOK) sell through the over-allotment option?

WORK Medical Technology Group (WOK) sold an additional 91,942 ordinary shares through the partial exercise of the underwriter's over-allotment option.

What was the total number of shares sold by WORK Medical Technology Group (WOK) after the over-allotment option exercise?

After the partial exercise of the over-allotment option, the total number of ordinary shares sold by WORK Medical Technology Group (WOK) increased to 2,091,942.

What were the gross proceeds from WORK Medical Technology Group's (WOK) IPO including the over-allotment option?

The gross proceeds from WORK Medical Technology Group's (WOK) IPO, including the partial exercise of the over-allotment option, increased to approximately $8.37 million.

When did WORK Medical Technology Group (WOK) begin trading on the Nasdaq Capital Market?

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

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, product marketing, patent purchases, and working capital.