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HANGZHOU, China - WORK Medical Technology Group LTD (NASDAQ:WOK), a Chinese medical device supplier with a market capitalization of $7.3 million, today announced the pricing of its securities offering, aiming to raise $5 million in gross proceeds. The offering includes 10 million units, with each unit comprising a share, and two series of warrants, all at a price significantly below the current market. According to InvestingPro data, the company has been quickly burning through cash, with negative free cash flow of $11.45 million in the last twelve months.
The units, priced at $0.50 for ordinary units and $0.4995 for pre-funded units, consist of Class A ordinary shares and warrants to purchase additional shares at a future date. The warrants are immediately exercisable, with Series A expiring after 12 months and Series B after 3 months. The pricing comes as the stock has experienced significant volatility, with InvestingPro showing a 91% decline over the past six months and currently trading at just 0.56 times book value.
With an overall "WEAK" financial health rating from InvestingPro and revenue declining by 15% in the last twelve months, the capital raised is earmarked for upgrading production equipment, investing in research and development, enhancing internal control systems, and for general corporate purposes. WORK Medical emphasized that the offering is on a firm commitment basis, with Univest Securities, LLC serving as the sole book-running manager.
This move comes as the company continues to expand its product portfolio, which includes 21 medical devices sold across China and in over 30 countries globally. WORK Medical has also registered 17 products with the U.S. Food and Drug Administration, allowing entry into the U.S. market. The company generated revenue of $11.51 million in the last twelve months, with a gross profit margin of approximately 25%.
The offering is made by means of a prospectus, part of a registration statement already effective with the U.S. Securities and Exchange Commission. This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, WORK Medical Technology Group LTD has been notified by Nasdaq regarding its non-compliance with the minimum bid price requirement, as its shares have fallen below $1.00 for 30 consecutive business days. The company has until October 6, 2025, to regain compliance, potentially through measures like a reverse share split. Meanwhile, WORK Medical has announced a strategic partnership with Shanghai Chartwell Medical Device Co., Ltd. This collaboration aims to drive industrial synergy and growth in the healthcare sector through joint investment funds and co-investment in healthcare infrastructure and technology projects. Mr. Wu Shuang, CEO and Chairman of WORK Medical, expressed optimism about the partnership’s potential to enhance operational efficiency and market leadership. The partnership is anticipated to result in a more diverse product portfolio and significant revenue and profit growth over the next three years. Chartwell Medical specializes in high-end medical devices and consumables and holds exclusive rights for several Japanese brands. This collaboration is expected to strengthen both companies’ competitiveness in the global healthcare industry.
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