Tenon Medical, Inc. (NASDAQ:TNON), a company specializing in surgical and medical instruments, has entered into a Securities Purchase Agreement with select investors for a private placement offering. On Thursday, the company agreed to sell 86,454 shares of its Series B Preferred Stock and warrants to purchase 16,214 shares of common stock at $4.2756 per share, totaling an aggregate offering price of $550,000.
The Series B Preferred Stock, convertible into common stock at the holder's discretion, has a "Stated Value" of $6.3625 per share, with an initial conversion price set at $5.09 per share. This conversion price is subject to adjustments, including anti-dilution protections for the investors.
The company has also reserved the right to mandate a 50% conversion of the preferred stock under certain conditions, such as when the daily volume-weighted average price of the common stock exceeds 250% of the conversion price or when the company's revenues reach $2.25 million in a single financial quarter.
In the event of a company liquidation, Series B Preferred Stock holders will receive a preferential payout. The preferred stock also has voting rights, capped at 9.99% per individual holder, and does not accumulate dividends.
The accompanying warrants, valid for five years, also feature a "cashless exercise" option and share the preferred stock's anti-dilution rights. The exercise price for warrants is $4.2756 per share.
As part of the agreement, Tenon Medical is committed to filing a registration statement for the common stock underlying the Series B Preferred Stock and the warrants, which is expected to be effective within 120 days post-closing.
In other recent news, Tenon Medical, Inc. has reported promising interim results from its MAINSAIL study, indicating that the Catamaran SI Joint Fusion System may offer significant improvements for patients with sacroiliac joint disorders.
The study revealed a marked decrease in pain and disability, a strong safety profile, and high patient satisfaction. Furthermore, the Catamaran implant has been used in 700 implantations for various sacroiliac joint dysfunctions, including revisions of previously failed treatments.
In management changes, Tenon Medical has appointed Kevin Williamson as the new Chief Financial Officer, succeeding Steve Van Dick. Williamson's extensive experience from his previous role as CFO at Accelus Inc. is expected to be instrumental as Tenon Medical advances into its next growth phase.
However, Tenon Medical is facing a potential delisting from the Nasdaq Stock Market due to an equity shortfall, having reported stockholders' equity of $832,000, falling short of Nasdaq's minimum requirement of $2.5 million. The company is assessing options to regain compliance and has until October 2024 to propose a plan addressing this issue.
During the 2024 Annual Stockholders Meeting, shareholders approved key proposals, including the election of seven nominees to the Board of Directors, amendments to the company's equity plan, and the ratification of Haskell & White LLP as the independent auditor for the fiscal year ending December 31, 2024.
The terms of the company's Series B Preferred Stock, related warrants, and an amendment to decrease the conversion price of the Series A Preferred Stock were also approved to comply with Nasdaq Listing Rule 5635(d).
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