After pricing an equity offering that will dilute current investors but help shore up its balance sheet, shares in Myomo Inc (NYSE:MYO) are tumbling 25% as of 10:38AM EST.
The medical-robotics maker priced an underwritten public offering of 4,175,000 shares of its common stock and accompanying warrants to purchase 4,175,000 shares of common stock. Each share of common stock is being sold together with one warrant to purchase one share of common stock, at a combined price to the public of $2.40 (an 18% discount to yesterday’s closing price) per share of common stock and accompanying warrant, for gross proceeds of approximately $10.0 million. The warrants have an exercise price of $2.95 per share, are immediately exercisable and will expire on December 4, 2022.
Net net, the offering will raise about $9.1 million, which will allow the company to pay its debt repayment and working capital and other general corporate purposes. In connection with the offering, Myomo has granted the underwriter a 45-day option to purchase up to an additional 626,250 shares of common stock and/or warrants to purchase 626,250 shares of common stock to cover over-allotments, if any. The offering is expected to close on or about December 4, 2017, subject to satisfaction of customary closing conditions.
On the ratings front, H.C. Wainwright analyst Amit Dayal initiated coverage with a Buy rating on MYO and a price target of $12, in a report issued on October 2. The current price target represents a potential upside of 466% from where the stock is currently trading. According to TipRanks.com, Dayal has a yearly average loss of 5.2%, a 39% success rate, and is ranked #4442 out of 4735 analysts.
Myomo develops neuro-robotic technology. It offers MyoPro, a myoelectric limb orthosis that provides an assistive function for joint motion that enables individuals with paralysis due to a stroke, traumatic brain injury, cerebral palsy, spinal cord injury, multiple sclerosis, ALS, and other diagnoses to self-initiate and control movements of a partially paralyzed arm using their own muscle signals.