Vapotherm Announces Closing of $23 Million Private Placement

Rhea-AI Summary

Vapotherm, Inc. (NYSE: VAPO) announced the closing of a private placement on February 10, 2023, raising approximately $23.0 million. The offering included the issuance of 17,502,244 shares of common stock and pre-funded warrants allowing for the purchase of an additional 4,402,508 shares at an exercise price of $0.001 each. Accompanying warrants to purchase one share for every share purchased were also issued at an exercise price of $1.17, with a five-year lifespan. Proceeds from this placement will primarily support sales, marketing, and general corporate expenses.

Positive

• Raised approximately $23.0 million from private placement to support operations.
• Pre-funded warrants provide potential future capital at a very low exercise price.

Negative

• Company may struggle to achieve profitability, facing past losses.
• Risks associated with moving manufacturing operations to Mexico may impact operations.
• Dependence on sales from Precision Flow systems amidst strong competition.

EXETER, N.H.--(BUSINESS WIRE)-- Vapotherm, Inc. (NYSE: VAPO), (“Vapotherm” or the “Company”), a global medical technology company focused on the development and commercialization of its proprietary Vapotherm high velocity therapy® products, which are used to treat patients of all ages suffering from respiratory distress, today announced that it closed its previously announced private placement on February 10, 2023, for the issuance and sale of 17,502,244 shares of its common stock and pre-funded warrants to purchase up to 4,402,508 shares of its common stock. The pre-funded warrants have a term of 30 years and an exercise price of $0.001 per share. In addition, the Company issued accompanying warrants to purchase one share of common stock for each share of common stock or pre-funded warrant purchased by the investors. The warrants were exercisable immediately upon issuance, in whole or in part, at an exercise price of $1.17 per share and have a 5-year life.

Gross proceeds were approximately $23.0 million before deducting the placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering primarily for sales and marketing, working capital, and other general corporate purposes.

William Blair & Company, L.L.C. acted as the sole placement agent for this offering.

The securities issued have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Pursuant to the terms of private placement, Vapotherm has agreed to file a registration statement with the Securities and Exchange Commission registering the securities sold in the private placement.

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 other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Vapotherm

Vapotherm, Inc. (NYSE: VAPO) is a publicly traded developer and manufacturer of advanced respiratory technology based in Exeter, New Hampshire, USA. The Company develops innovative, comfortable, non-invasive technologies for respiratory support of patients with chronic or acute breathing disorders. Over 3.6 million patients have been treated with the use of Vapotherm high velocity therapy® systems.

Vapotherm high velocity therapy is mask-free non-invasive respiratory support and is a front-line tool for relieving respiratory distress—including hypercapnia, hypoxemia, and dyspnea. It allows for the fast, safe treatment of undifferentiated respiratory distress with one tool. The HVT 2.0 and Precision Flow systems’ mask-free interfaces deliver optimally conditioned breathing gases, making it comfortable for patients and reducing the risks and care complexities associated with mask therapies. While being treated, patients can talk, eat, drink and take oral medication.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, including the expected use of proceeds from the private placement. In some cases, you can identify forward-looking statements by terms such as ‘‘expect,’’ “continue,” “plan,” “intend,” “will,” “outlook,” “guidance,” or “typically,” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words, and the use of future dates. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include, but are not limited to the following: Vapotherm has incurred losses in the past and may be unable to achieve or sustain profitability in the future or achieve its 2023 financial guidance; risks associated with the move of its manufacturing operations to Mexico; Vapotherm’s ability to raise additional capital to fund its existing commercial operations, develop and commercialize new products, and expand its operations; Vapotherm’s ability to comply with its $5 million minimum cash covenant, execute on its path-to-profitability initiative, convert $17 million of excess inventory into cash, fund its business through 2023 and get it to Adjusted EBITDA positive in the fourth quarter of 2023; Vapotherm’s dependence on sales generated from its Precision Flow systems, competition from multi-national corporations who have significantly greater resources than Vapotherm and are more established in the respiratory market; the ability for Precision Flow systems to gain increased market acceptance; Vapotherm’s inexperience directly marketing and selling its products; the potential loss of one or more suppliers and dependence on its new third party manufacturer; Vapotherm’s susceptibility to seasonal fluctuations; Vapotherm’s failure to comply with applicable United States and foreign regulatory requirements; the failure to obtain U.S. Food and Drug Administration or other regulatory authorization to market and sell future products or its inability to secure, maintain or enforce patent or other intellectual property protection for its products; the impact of the COVID-19 pandemic on its business, including its supply chain, and the other risks and uncertainties included under the heading “Risk Factors” in Vapotherm’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission on February 24, 2022 and Vapotherm’s most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on November 2, 2022, and in any subsequent filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release reflect Vapotherm’s views as of the date hereof, and Vapotherm does not assume and specifically disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230214005828/en/

Investor Relations:

Mark Klausner or Mike Vallie, Westwicke, an ICR Company, ir@vtherm.com, +1 (603) 658-0011

Source: Vapotherm, Inc.

FAQ

What was the outcome of Vapotherm's private placement on February 10, 2023?

Vapotherm successfully raised approximately $23.0 million through the issuance of shares and warrants.

How many shares were issued in Vapotherm's private placement?

A total of 17,502,244 shares of common stock were issued, along with pre-funded warrants.

What are the exercise prices for Vapotherm's warrants?

The pre-funded warrants have an exercise price of $0.001, while the accompanying warrants have an exercise price of $1.17.

What will Vapotherm do with the funds raised from the private placement?

The proceeds will primarily be used for sales, marketing, working capital, and other general corporate purposes.

What risks does Vapotherm face following the private placement?

Vapotherm may struggle with profitability, face operational risks from moving manufacturing to Mexico, and depend heavily on its Precision Flow systems sales.