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Hair transplant robot company going public

4 things to know about the hair transplant robot company going public

As more men desire a full head of hair, a robotics hair-transplant company is seeking to capitalize on that insecurity.

Restoration Robotics filed to go public with a price range of $7 to $9 a share, which would give the company a valuation of up to $25 million. By selling 3.12 million shares of stock, the company would raise up to $28 million.

The company has applied to list on the Nasdaq Global Market under the symbol “HAIR.”

National Securities Corp. is the lead underwriter on the offering. The underwriters have the option of selling an additional 468,750 additional shares.

Here’s what to know before the company goes public:

The market opportunity

Restoration Robotics believes it’s poised to bring in more revenue, thanks to an aging population that has money to spend and that population’s growing acceptance of surgery for aesthetic reasons. Men, in particular, appear to have a growing acceptance of the practice, with the number of vanity procedures increasing 325% since 1997, according to the American Society for Aesthetic Plastic Surgery.

The acceptance, of course, comes partly out of need, as about 35 million men in the U.S. have male pattern baldness, according to the prospectus.

All told, Americans spent more than $15 billion on aesthetic procedures in 2016, according to the American Society for Aesthetic Plastic Surgery.

transplant robot company going publicOne problem

While balding men and women may desire a robotic helping hand, the ARTAS system is only cleared by the FDA to market to men who have black or brown straight hair.

Overall, the machine is meant to assist a physician during some of the more difficult parts of hair-transplant surgery — the dissection of hair follicles and planning where to put the new hair follicles.

Later on, Restoration Robotics will be seeking FDA approval to market its systems to women, patients with curly hair and hair that is not black or brown. It also hopes to expand beyond just follical dissection.

The company had sold 89 ARTAS Systems in the U.S. and 144 outside of the country as of June 2017.

The money

Restoration Robotics brought in net revenue of $15.6 million in 2016, down from $17.2 million in 2015. The company also pared down its net loss to $21.8 million in 2016 from $23 million in 2015. The company had a deficit of $156.8 million as of June 2017.

The company began in 2002, but did not begin commercial sales of its product in the U.S. until 2011. Restoration Robotics said it has never been profitable.

Why their auditors are concerned

The auditors said they have prepared the company’s financial statements “on a going concern basis” given the company’s accumulated debt and the fact that the company does not have enough money for its current operations.

“These factors raise substantial doubt about the Company’s ability to continue as a going concern,” the auditors wrote in an explanatory note in the prospectus.

Though Restoration Robotics expects to raise money through its initial public offering and has raised more money by issuing Series C convertible stock, the auditors say that may not be enough to satisfy its obligations due Dec. 31, 2017.


4 things to know about the hair transplant robot company going public