Pomerantz LLP announces that a class action lawsuit has been filed against Restoration Robotics, Inc. (“Restoration Robotics” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Northern District of California, and docketed under 18-cv-03883, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired Restoration Robotics stock pursuant and/or traceable to the Company’s Initial Public Offering (the “IPO” or “Offering”) that commenced on October 12, 2017, and closed on October 16, 2017, seeking to recover damages caused by defendants’ violations of the federal securities laws and to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 against Restoration Robotics and certain of its officers and directors.
Founded in 2002, Restoration Robotics is a medical technology company that purports to be developing and commercializing a robotic device (the “ARTAS System”) designed to assist physicians in performing many of the repetitive tasks that are a part of a follicular unit extraction surgery, a type of hair restoration procedure. On October 16, 2017, Restoration Robotics closed its IPO, selling 3,897,910 shares at a public offering price of $7.00 per share, raising cash proceeds for the Company of approximately $22.7 million after deducting underwriting discounts, commissions, and expenses.
Contrary to the representations made in its Offering documents, Restoration Robotics was not equipped with a sufficient salesforce to effectively grow its business in the United States, nor was the Offering sufficient to fund Restoration Robotics’ operations for a full year after the IPO. On May 11, 2018, Restoration Robotics announced that it had obtained additional financing in the form of a $20 million Loan and Security Agreement with Solar Capital Ltd. and Bridge Bank. Then, On May 14, 2018, on an earnings call discussing the Company’s financial and operating results for the first quarter of 2018, Company Chief Executive Officer Ryan Rhodes stated that “[i]n the near-term, we expect some level of softness as we further optimize and expand our sales teams as the new U.S sales reps take time to become more productive.”
Since the IPO, the Company’s common stock has traded down at a greater than 50% discount to the $7.00 IPO price.