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Medical Robotics Company Crowdfunding IPO

MyoPro device

MyoPro device (Myomo Inc.)

15 March 2017. A medical robotics company spun-off from labs at MIT is issuing its initial public stock offering through equity crowdfunding, aiming to raise $15 million. Myomo Inc. in Cambridge, Massachusetts aims to be the first company to both crowdfund its IPO and be listed on the New York Stock Exchange, under the symbol MYO.

Myomo develops assistive robotics devices for people with neurological disorders or upper limb paralysis. The newest form of the device, known as MyoPro, is a powered brace that makes it possible for individuals to move their impaired hand, wrist, or arm. MyoPro has sensors that detect weakened muscle signals, called myoelectric signals, which are amplified and activate motors in the device to move the hand, wrist, or arm as desired.

The company says the device is designed for individuals with neurological disorders that result in impaired upper limb functions, such as spinal cord injury, stroke, multiple sclerosis, and amyotrophic lateral sclerosis or ALS. The MyoPro is a result of research supported by the Veterans Affairs Department in the U.S. beginning in the 1990s. That research led to a myoelectric prosthetic device prototype developed at MIT, which Myomo licensed in the form of two patents from the university in 2006.

Myomo plans to raise $15 million by issuing 2 million shares priced at $7.50, adding to $20 million already raised privately. Shares are being offered to the public through BANQ, an online marketplace for small-cap companies, those with small capitalization values. Myomo’s IPO takes advantage of the Jumpstart Our Business Startups, or JOBS Act, passed by Congress and signed by President Obama in 2012. Regulation A+ under Title IV of the JOBS Act allows companies to issue crowdfunded mini-IPOs, raising under $50 million, to the public, with lower fees and fewer regulations than full-scale IPOs. Before 2015, equity crowdfunding campaigns were open only to accredited investors, those with a net worth of $1 million or more.

If successful, Myomo says it will be the first company with a crowdfunded IPO to be listed on the New York Stock Exchange. “While a traditional public offering is generally reserved for large institutions and the Wall Street elite to invest at this stage,” says Paul Gudonis, CEO of Myomo in a company statement, “we are taking advantage of new SEC regulations to level the playing field for all investors to participate concurrently in our IPO.”

The company says proceeds from the IPO will fund sales and marketing, product development, repayment of debt, and for working capital and other general corporate purposes. The official offering lists a number of risks to investors, including adverse results of future clinical trials, introduction of competitive products, and reliance on third-party or Medicare reimbursement. In addition, Myomo outsources the manufacturing of MyoPro devices to a third party, another source of risk to investors.

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