Business Context and Reporting Period
This Form 8-K Current Report from Vivos Therapeutics, Inc. (VVOS) covers events occurring on January 5, 2023, with the report filed on January 9, 2023. The Company, an emerging growth company incorporated in Delaware, announced the entry into a material definitive agreement for a private placement of securities.
Key Financial Metrics and Transaction Details
- Gross Proceeds: Up to $8,000,000.
- Net Proceeds: Approximately $7.5 million after placement agent fees and estimated offering expenses.
- Securities Issued:
- 2,000,000 shares of Common Stock.
- Pre-Funded Warrants to purchase up to 4,666,667 shares of Common Stock.
- Common Stock Purchase Warrants to purchase up to 6,666,667 shares of Common Stock.
- Purchase Prices: $1.20 per Share and associated warrant; $1.1999 per Pre-Funded Warrant and associated warrant.
- Placement Agent Fees: 6.0% of gross proceeds plus $40,000 in expense reimbursement.
- Use of Proceeds: General working capital and general corporate purposes.
Material Changes and Agreements
The primary material change is the execution of a Securities Purchase Agreement with an institutional investor. The transaction structure involves a mix of immediate equity issuance and warrant instruments. The Company also entered into a Registration Rights Agreement requiring the filing of a registration statement for resale of the securities within 30 days, with effectiveness targeted by February 14, 2023, or within 75 days if subject to SEC review.
Outlook, Risks, and Contingencies
- Warrant Terms: Common Stock Purchase Warrants are exercisable for 5.5 years at $1.20 per share. Pre-Funded Warrants are exercisable at $0.0001 per share until fully exercised.
- Penalties: The Company faces potential liquidated damages up to 10.5% of gross proceeds if it fails to meet specific filing and effectiveness deadlines in the Registration Rights Agreement.
- Ownership Limitations: Warrants contain customary beneficial ownership limitations, waivable by holders upon 61 days' notice.
- Regulatory Status: Securities were offered pursuant to exemptions under Section 4(a)(2) and Rule 506(b) of the Securities Act of 1933 and are not registered under the Act.
Investor Verification Checklist
- Verify the final closing date and actual net proceeds received versus the estimated $7.5 million.
- Confirm the filing and effectiveness date of the registration statement for resale of the securities.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) for specific covenants and restrictions on future capital issuances.
- Monitor the Company's cash burn rate to assess the sufficiency of the $7.5 million net proceeds for stated working capital needs.