WORK Medical Technology Group LTD Announces Pricing of Initial Public Offering

Rhea-AI Summary

WORK Medical Technology Group , a Chinese medical device supplier, has announced the pricing of its initial public offering (IPO) on the Nasdaq Capital Market. The company is offering 2,000,000 ordinary shares at US$4.00 per share, aiming to raise US$8.00 million in gross proceeds. Trading is expected to commence on August 23, 2024, under the ticker symbol 'WOK'. The underwriters have a 45-day option to purchase an additional 300,000 shares. Funds will be used for upgrading production equipment, increasing capacity, developing new products, marketing, patent purchases, and working capital. Kingswood Capital Partners, is acting as the sole book-running manager for this firm commitment offering.

Positive

• IPO expected to raise US$8.00 million in gross proceeds
• Listing on Nasdaq Capital Market under ticker 'WOK'
• Funds allocated for production upgrades and capacity increase
• Plans for developing new medical consumables and devices
• Investment in product marketing and patent purchases

Negative

• Potential dilution of existing shareholders' value
• Underwriters' option to purchase additional shares may further dilute ownership
• Dependence on successful closing of the offering for planned initiatives

Financial Analyst

The IPO of WORK Medical Technology Group is a significant event for the Chinese medical device market. Pricing at $4.00 per share and raising $8 million in gross proceeds, the company's valuation seems modest compared to the broader medical technology sector. This could indicate either conservative pricing or potential growth opportunities.

The planned use of proceeds, particularly for upgrading production equipment and increasing capacity, suggests a focus on scalability. However, investors should note that the $8 million raised is relatively small for a public company, which may limit the impact of these initiatives. The option for underwriters to purchase additional shares could provide up to $1.2 million more, but this still leaves WORK with financial firepower compared to larger competitors.

Market Research Analyst

WORK's IPO reflects growing investor interest in China's medical device sector. The company's focus on masks and medical consumables aligns with increased global demand for these products. However, this market is becoming increasingly competitive and WORK will need to differentiate itself to succeed.

The allocation of funds for product development and patent purchases indicates a strategy to expand and protect their product portfolio. This could be important for long-term growth but may not yield immediate returns. The inclusion of "working capital" in the use of proceeds suggests the company may have tight operational cash flow, which investors should monitor closely.

Trading under the ticker "WOK" on Nasdaq could increase visibility, but as a small-cap stock, liquidity might be a concern for investors.

Legal Expert

The "firm commitment" underwriting structure provides some assurance to investors, as it means Kingswood Capital Partners has agreed to purchase all offered shares. This reduces the risk of an unsuccessful offering but doesn't guarantee post-IPO performance.

Investors should carefully review the prospectus filed with the SEC. The company's status as a foreign issuer (Form F-1) means it may have different reporting requirements compared to domestic U.S. companies. This could impact transparency and investor protections.

The 45-day option granted to underwriters is standard practice but could lead to short-term price pressures if exercised. The disclaimer about not constituting an offer to sell is a legal necessity to comply with securities laws and protect the company from potential litigation.

Hangzhou, China, Aug. 23, 2024 (GLOBE NEWSWIRE) -- WORK Medical Technology Group LTD (the "Company"), a supplier of medical devices in China, today announced the pricing 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 have been approved for listing on the Nasdaq Capital Market and are expected to commence trading on August 23, 2024 under the ticker symbol "WOK."

The Company expects to receive aggregate gross proceeds of US$8.00 million from the Offering, 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 at the public offering price, less underwriting discounts. The Offering is expected to close on or about August 26, 2024, subject to the satisfaction of customary closing conditions.

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, (v) working capital and other general corporate purposes.

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

A registration statement on Form F-1 relating to the Offering has been 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 is being made only by means of a prospectus, forming a part of the registration statement relating to the Offering. Copies of the 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.

Before you invest, you should read the prospectus and other documents the Company has filed or will file with the SEC for more information about the Company and the Offering. 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. These forward-looking statements include, without limitation, statements regarding completion, timing and anticipated size of the initial public offering and the expected commencement of trading on Nasdaq.

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. These risks and uncertainties include, but are not limited to, completion of the proposed initial public offering on the anticipated terms, or at all, market conditions and the satisfaction of customary closing conditions related to the initial public offering. 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 is the IPO price for WORK Medical Technology Group (WOK) shares?

WORK Medical Technology Group (WOK) has priced its IPO at US$4.00 per ordinary share.

How many shares is WORK Medical Technology Group (WOK) offering in its IPO?

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

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

WORK Medical Technology Group (WOK) is expected to start trading on the Nasdaq Capital Market on August 23, 2024.

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

WOK plans to use the proceeds for upgrading production equipment, increasing capacity, developing new products, marketing, patent purchases, and working capital.

Who is the underwriter for WORK Medical Technology Group's (WOK) IPO?

Kingswood Capital Partners, is acting as the sole book-running manager for WORK Medical Technology Group's (WOK) IPO.