8-K: Vivos Therapeutics Secures $3.5 Million in Registered Direct Offering, Concurrent Private Placement of Warrants

Vivos Therapeutics, Inc. has announced a $3.5 million registered direct offering, priced at-the-market, alongside a concurrent private placement of warrants, with proceeds earmarked for working capital and general corporate purposes.

Summary

• Vivos Therapeutics, Inc. (Vivos) has entered into definitive agreements for a registered direct offering of 709,220 shares of its common stock at $4.935 per share.
• This is a registered direct offering priced at-the-market under Nasdaq rules.
• Concurrently, Vivos will issue unregistered short-term warrants to purchase up to 709,220 shares of common stock in a private placement.
• The warrants have an exercise price of $4.81 per share, are exercisable upon issuance, and expire two years from the issuance date.
• The offering is expected to close on or about December 24, 2024, subject to customary closing conditions.
• Gross proceeds from the offering are estimated to be around $3.5 million, before fees and expenses.
• Potential additional gross proceeds from the warrants, if fully exercised on a cash basis, could be approximately $3.4 million.
• Vivos intends to use the net proceeds from the offering for working capital and general corporate purposes.

Sentiment

Score: 6

Explanation: The announcement is positive overall due to the successful capital raise, but uncertainty around warrant exercise and ongoing business challenges temper the sentiment.

Positives

• The offering is priced at-the-market under Nasdaq rules, which can be attractive to investors.
• The company has secured a well-known placement agent, H.C. Wainwright & Co.
• The potential exercise of warrants could provide an additional $3.4 million in funding.
• The company has a clear plan to use the proceeds for working capital and general corporate purposes.

Negatives

• There is no assurance that any of the short-term warrants will be exercised.
• The offering could dilute existing shareholders' ownership.
• The company has experienced scrutiny in the sleep apnea treatment sector.

Risks

• The company may be unable to implement strategies that increase revenues.
• Some patients may not achieve desired results from using the company's products.
• The company faces risks associated with regulatory scrutiny and adverse publicity in the sleep apnea treatment sector.
• There is a risk that the company may be unable to secure additional financing on reasonable terms when needed, if at all, or maintain its Nasdaq listing.
• The offering is subject to market conditions and may not close as expected.

Future Outlook

The company intends to use the net proceeds from the offering for working capital and general corporate purposes. The potential additional proceeds from the exercise of warrants could provide further funding for these purposes.

Industry Context

Vivos operates in the sleep apnea treatment sector, which is subject to regulatory scrutiny and evolving market dynamics. The company's focus on non-surgical, non-invasive treatments positions it within a growing segment of the market.

Comparison to Industry Standards

• Vivos' non-surgical approach to treating OSA differs from the more common CPAP therapy offered by competitors like ResMed and Philips Respironics.
• ResMed reported revenues of $4.2 billion for fiscal year 2023, significantly higher than Vivos, indicating a much larger scale of operations.
• Philips Respironics has faced challenges related to product recalls, which may present an opportunity for Vivos to gain market share.
• Inspire Medical Systems, another competitor in the sleep apnea device market, focuses on implantable neurostimulation devices, a different technology than Vivos' oral appliances.
• Inspire Medical Systems reported revenues of $408 million in 2022, demonstrating the potential market for alternative OSA treatments.

Stakeholder Impact

• Shareholders may experience dilution from the issuance of new shares and warrants.
• Employees may benefit from the company having additional working capital.
• Customers may benefit from continued product development and availability.
• Creditors may view the capital raise as a positive sign of the company's financial health.

Next Steps

• File the prospectus supplement and accompanying prospectus relating to the shares of common stock with the SEC.
• Close the offering, expected on or about December 24, 2024.
• Use the net proceeds from the offering for working capital and general corporate purposes.

Key Dates

Keywords

Vivos Therapeutics, VVOS, Registered Direct Offering, Private Placement, Warrants, Common Stock, Sleep Apnea, OSA, Capital Raise, Nasdaq, H.C. Wainwright & Co., Working Capital, At-the-Market, Securities and Exchange Commission, SEC, Prospectus, Investment, Healthcare, Medical Device