Tenon Medical, Inc. Announces a Warrant Inducement Transaction for $3.0 Million in Gross Proceeds

Rhea-AI Summary

Tenon Medical (NASDAQ:TNON), a company focused on sacroiliac joint disorders treatment, has secured $3.0 million in gross proceeds through a warrant inducement transaction with an existing healthcare-focused institutional investor. The agreement involves the immediate exercise of Series A and B Warrants for 2,445,700 total shares at a reduced price of $1.25 per share.

In exchange, the investor will receive new unregistered warrants in a private placement: Series C-1 Warrants for 2,445,700 shares and Series C-2 Warrants for 1,222,850 shares, both with a $1.25 exercise price. The C-1 Warrants will expire in 5 years and C-2 Warrants in 3 years from stockholder approval date. The transaction is expected to close around March 12, 2025.

The company plans to use the net proceeds for working capital and general corporate purposes. A.G.P./Alliance Global Partners served as the exclusive financial advisor for this transaction.

Positive

• Secured immediate $3.0 million in gross proceeds through warrant exercise
• Maintains relationship with existing healthcare-focused institutional investor
• Reduced warrant exercise price could encourage future warrant exercises

Negative

• Potential dilution from additional warrant issuance of 3,668,550 new shares
• Reduced warrant exercise price of $1.25 indicates possible share price pressure
• Transaction requires future stockholder approval for new warrant exercises

Insights

Financial Analyst

Tenon Medical has secured $3.0 million in immediate capital through a warrant inducement transaction with an existing healthcare-focused institutional investor. The transaction involves the exercise of existing warrants for 2,445,700 shares at $1.25 per share (the current market price), providing a significant cash infusion relative to the company's $3.92 million market capitalization.

This financial maneuver provides essential working capital without offering shares at a discount, which is positive. However, in exchange, Tenon is issuing new Series C-1 and C-2 warrants for up to 3,668,550 additional shares at the same $1.25 exercise price, creating potential future dilution if exercised after stockholder approval.

For a smaller medical device company like Tenon, which focuses on sacroiliac joint disorders, securing this capital strengthens its financial position in the near term. The participation of an existing healthcare-focused investor suggests continued institutional confidence in Tenon's business model. The transaction structure effectively exchanges future equity potential for immediate operating capital, striking a balance between addressing immediate financial needs and managing dilution effects.

While the cash infusion addresses immediate working capital requirements, investors should consider the longer-term dilutive impact if the new warrants are eventually exercised. This financing mechanism indicates the company needed to incentivize warrant exercise to secure capital at this stage of its development.

LOS GATOS, CA / ACCESS Newswire / March 11, 2025 / Tenon Medical, Inc. (NASDAQ:TNON) ("Tenon" or the "Company"), a company transforming care for patients suffering with certain sacroiliac joint (SI Joint) disorders, today announced its entry into a warrant inducement agreement with an existing healthcare-focused institutional investor of the Company for the immediate exercise of Series A Warrants to purchase up to 1,222,850 shares of common stock (the "Series A Warrants") and Series B Warrants to purchase up to 1,222,850 shares of common stock (the "Series B Warrants", and together with the Series A Warrants the "Existing Warrants") at a reduced exercise price of $1.25 for gross cash proceeds of approximately $3.0 million, before deducting financial advisor fees and other transaction expenses. The Company intends to use the net proceeds from the offering for working capital and other general corporate purposes.

In consideration for the immediate exercise in full of the Existing Warrants, the investor will receive in a private placement new Series C-1 unregistered warrants to purchase up to 2,445,700 shares of common stock (the "Series C-1 Warrants") and 1,222,850 Series C-2 Warrants to purchase shares of common stock (the "Series C-2 Warrants", and together with the Series C-1 Warrants the "New Warrants"). The New Warrants will have an exercise price of $1.25 and will be initially exercisable on the date that stockholder approval of the exercise of the New Warrants is obtained. The Series C-1 Warrants will expire five years from the date of such approval and the Series C-2 Warrants will expire three years from the date of such approval. The closing of the warrant inducement transaction is expected to occur on or about March 12, 2025, subject to satisfaction of customary closing conditions.

A.G.P./Alliance Global Partners acted as the exclusive financial advisor in connection with the transaction.

The New Warrants described above were offered in a private placement pursuant to an applicable exemption from the registration requirements of the Securities Act and, along with the common stock issuable upon their exercise, have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The securities were offered only to accredited investors. The Company has agreed to file a registration statement with the SEC covering the resale of common stock issuable upon exercise of the New Warrants.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Tenon Medical, Inc.

Tenon Medical, Inc., a medical device company formed in 2012, has developed The Catamaran SI Joint Fusion System that offers a novel, less invasive approach to the SI joint using a single, robust titanium implant. The system features the Catamaran™ Fixation Device which passes through both the axial and sagittal planes of the ilium and sacrum, stabilizing and transfixing the SI Joint along its longitudinal axis. The angle and trajectory of the Catamaran surgical approach is also designed to provide a pathway away from critical neural and vascular structures and into the strongest cortical bone. Since the national launch of the Catamaran SI Joint Fusion System in October 2022, Tenon is focused on three commercial opportunities with its System in the SI Joint market which includes: 1) Primary SI Joint procedures, 2) Revision procedures of failed SI Joint implants and 3) SI Joint fusion adjunct to a spine fusion construct. For more information, please visit https://www.tenonmed.com/.

Safe Harbor

This press release contains "forward-looking statements," which are statements related to events, results, activities or developments that Tenon expects, believes or anticipates will or may occur in the future. Forward-looking often contains words such as "intends," "estimates," "anticipates," "hopes," "projects," "plans," "expects," "seek," "believes," "see," "should," "will," "would," "target," and similar expressions and the negative versions thereof. These forward-looking statements, include, but are not limited to, statements regarding the completion of the Transaction, the satisfaction of customary closing conditions related to the Transaction and the anticipated use of proceeds therefrom. Such statements are based on Tenon's experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances, and speak only as of the date made. Forward-looking statements are inherently uncertain and actual results may differ materially from assumptions, estimates or expectations reflected or contained in the forward-looking statements as a result of various factors. For details on the uncertainties that may cause Tenon's actual results to be materially different than those expressed in any forward-looking statements, please review Tenon's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and updated from time to time in our Form 10-Q filings and in our other public filings on file with the SEC at www.sec.gov, particularly the information contained in the section entitled "Risk Factors." We undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise unless required by law.

IR Contact:

Shannon Devine: 203-741-8811
MZ North America
tenon@mzgroup.us

SOURCE: Tenon Medical, Inc.

View the original press release on ACCESS Newswire

FAQ

How much did Tenon Medical (TNON) raise in the March 2025 warrant inducement transaction?

Tenon Medical raised $3.0 million in gross proceeds through the warrant inducement transaction with an existing healthcare-focused institutional investor.

What is the exercise price for the new warrants issued by TNON in March 2025?

The new Series C-1 and C-2 Warrants have an exercise price of $1.25 per share.

When will the Series C-1 and C-2 Warrants issued by TNON expire?

Series C-1 Warrants will expire 5 years from stockholder approval, while Series C-2 Warrants will expire 3 years from stockholder approval.

How will Tenon Medical use the proceeds from the March 2025 warrant transaction?

Tenon Medical intends to use the net proceeds for working capital and other general corporate purposes.