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LOS GATOS, CA - Tenon Medical, Inc. (NASDAQ:TNON), a medical device company specializing in treatments for sacroiliac joint disorders, has announced a new securities purchase agreement with an institutional investor. According to InvestingPro data, the company maintains a healthy current ratio of 4.39 and holds more cash than debt on its balance sheet, though it’s currently experiencing rapid cash burn. The agreement includes the sale of 733,500 shares at a price of $2.00 per share in a registered direct offering, in line with Nasdaq rules. Concurrently, the company will issue warrants for an equal number of shares in a private placement.
The warrants, priced also at $2.00 per share, will be immediately exercisable and are set to expire five years after issuance. The offerings are expected to close around March 26, 2025, subject to standard closing conditions, with gross proceeds anticipated to be around $1.5 million. Tenon intends to allocate the net proceeds towards working capital and general corporate purposes. This funding comes at a crucial time, as InvestingPro analysis shows the company’s challenging position with an EBITDA of -$13.38 million in the last twelve months. Subscribers can access 12 additional ProTips about TNON’s financial position.
A.G.P./Alliance Global Partners is serving as the sole placement agent for the offering. The offering is made pursuant to an effective shelf registration statement, which was declared effective by the SEC on May 17, 2023. Relevant documents, including a final prospectus supplement and the accompanying base prospectus, will be available on the SEC’s website and through A.G.P./Alliance Global Partners.
This financial move follows the national launch of Tenon’s Catamaran SI Joint Fusion System in October 2022. The system introduces a novel, less invasive approach to sacroiliac joint fusion with a single titanium implant. Tenon is focusing on three commercial opportunities within the SI joint market: primary and revision procedures for SI joint implants, and SI joint fusion as an adjunct to spine fusion constructs. Despite recent market challenges, with the stock down over 80% in the past six months, the company has maintained a gross profit margin of 52.21%. A comprehensive analysis of TNON’s growth potential is available in the Pro Research Report, part of the InvestingPro subscription.
The press release contains forward-looking statements, including expectations about the completion of the offering and the anticipated use of proceeds. These statements are subject to various factors and uncertainties, and actual results may differ materially. With an InvestingPro Financial Health Score of 2.01 (rated as ’FAIR’) and analysts not anticipating profitability this year, investors are advised to review Tenon’s public filings, including its Annual Report on Form 10-K and subsequent Form 10-Q filings for relevant risk factors.
The information in this article is based on a press release statement from Tenon Medical, Inc.
In other recent news, Tenon Medical reported a 12% increase in full-year revenue for 2024, totaling $3.3 million, despite a 4.7% decline in fourth-quarter revenue compared to the previous year. The company also improved its gross margin from 42% to 52% and reduced its net loss from $15.6 million in 2023 to $13.7 million in 2024. The FDA granted clearance for an expanded use of Tenon Medical’s Catamaran SI Joint Fusion System, now approved to augment thoracolumbar fusion, which could open a new market segment for the company. This regulatory approval is anticipated to enhance the system’s adoption among physicians and bolster Tenon Medical’s market presence in spinal surgeries. CEO Steve Foster expressed confidence in the system’s performance, supported by positive clinical trial data from the MAINSAIL study. The company also highlighted its strengthened balance sheet, with cash and cash equivalents increasing to $6.5 million, and no outstanding debt. Tenon Medical plans to launch the Catamaran SE platform by mid-2025 as part of its growth strategy. The company is actively addressing reimbursement challenges and expanding its sales force to support its market expansion efforts.
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