Myomo, which makes orthotic devices for paralyzed or weakened arms, completed its initial public offering via an SEC rule that makes it easier for smaller companies to access capital.
Cambridge, Massachusetts-based Myomo makes the MyoPro Orthosis, which enables patients to control a weakened or paralyzed arm using their own muscles. The powered brace detects a patient’s neurological signals and amplifies them—weak muscle signals activate motors in the device that move the arm and hand as desired.
The company announced Friday that it completed a $5 million IPO under Regulation A+, a provision of the Jumpstart our Business Startups Act. It raised an additional $2.9 million, bringing its total new capital to nearly $8 million. Shares began trading Monday on the NYSE MKT under the ticker symbol MYO. On Tuesday, the company rolled out its next-generation MyoPro 2 device.
Sometimes called a “crowdsourced IPO,” a Reg A+ offering allows companies to raise up to $50 million from all investors and not just those with a certain net worth. While the provision is designed to make IPOs quicker and easier for small companies, it “has the potential to open up investors to more risk,” The Wall Street Journal reported (sub. req.).
Myomo went with Reg A+ because there is no review period as there is with a traditional S-1 IPO, said CEO Paul Gudonis.
"Another aspect is we were able to access a broader set of potential investors instead of just accredited investors that typically invest in an S-1 IPO," he said. The Reg A+ offering allowed the company to reach out to potential investors who know people who could benefit from Myomo's products.
The company will use the proceeds to boost its sales and marketing and to support its international expansion, Gudonis said. The funds will also support the development of the MyoPro product line, including a pediatric version of the orthosis.
While it missed its stated $15 million goal, Myomo's IPO could inspire other small companies trying to go public. In 2016, 18 companies completed IPOs that raised less than $50 million, while 557 did so in 1996, the Wall Street Journal reported. As for the med tech industry, the number of IPOs declined in the first half of 2016—falling to only 10, compared to 17 for the same period in 2015 and 25 for H1 2014. All 10 of the deals raised less than $50 million.