Myomo, a privately held medical device company spun out of MIT, has launched an unusually structured public offering of stock aimed at raising up to $15 million and getting the company listed on the New York Stock Exchange.
Cambridge, MA-based Myomo is taking advantage of a change in federal securities law enacted through the Jumpstart Our Business Startups (JOBS) Act passed under the Obama administration. Under JOBS Act rules sometimes referred to as Regulation A+, smaller private companies can now raise up to $50 million by selling company shares to both accredited investors and the general public.
The offering is structured like an equity crowdfunding campaign. Investors can now buy Myomo shares on the website of Banq, an online investing platform run by TriPoint Global Equities, the selling agent administering Myomo’s securities offering.
The Regulation A+ mechanism can be used as a pathway to getting listed on a public stock exchange—it has been described as a sort of “mini-IPO.” These offerings might be appealing to smaller private companies in part because the fees are typically lower than a traditional IPO, and the ongoing requirements for public financial disclosures are generally looser, according to SeedInvest, which runs an online equity crowdfunding platform.
Myomo is selling up to 2 million shares for $7.50 each. The company is valued at $35 million. If it sells all of the shares being offered, it would net $13.1 million after fees and other expenses.
If the offering is successful, Myomo plans to apply for listing on the New York Stock Exchange under the ticker symbol “MYO.” If it doesn’t meet the exchange’s listing requirements, the company said it intends to try and get its common stock listed on an over-the-counter stock exchange.
Myomo sells robotic braces that can help people regain the use of partially paralyzed or weakened arms and hands. The brace has sensors that detect the weakened electric signals within the wearer’s body that are attempting to direct muscles to move. Those signals trigger motors in the brace that help the person bend their arm or open and close their hand. The user is still controlling their limbs; the brace just boosts his or her intent.
Myomo’s target customers include people who have suffered a stroke or a spinal cord injury, or who suffer from multiple sclerosis or other neurological disorders.
The company spun out of MIT in 2006, and the next year the FDA approved the initial version of its device for sale. But by 2008, Myomo had scaled back from a dozen to four full-time employees and refocused on research and development after it struggled to sell the product for use in rehabilitation clinics. Myomo continued refining its devices and later decided to sell them for patient use in the home.
As of last summer, Myomo had 20 full-time and three part-time employees, according to an SEC filing. Its 2016 financials haven’t been audited yet, but the company estimates it generated between $1 million and $1.2 million in revenue last year, with a net loss between $3.5 million and $3.7 million.
Myomo has raised $20 million from private investors, including Mountain Group Capital.
[Top image of Myomo’s MyoPro robotic brace downloaded from company press kit.]
