Tenon Medical, Inc. (NASDAQ: TNON) announced today that it has secured $3.0 million in gross proceeds through a warrant inducement transaction with an existing healthcare-focused institutional investor. The Los Gatos, California-based company, which specializes in sacroiliac (SI) joint disorder treatments, will use the funds to support working capital and general corporate purposes.
The transaction involves the immediate exercise of Series A and Series B Warrants to purchase up to 2,445,700 shares of common stock at a reduced exercise price of $1.25 per share. In exchange, the investor will receive new Series C-1 and C-2 Warrants through a private placement.
"This financing strengthens our position as we continue to transform care for patients suffering with SI joint disorders," said a company representative. "The additional capital will help us advance our commercial strategy across our three key market opportunities."
Transaction Details
Under the terms of the agreement, the investor will exercise existing warrants to purchase a total of 2,445,700 shares of common stock, consisting of:
- Series A Warrants for 1,222,850 shares
- Series B Warrants for 1,222,850 shares
In consideration for this immediate exercise, the investor will receive:
- New Series C-1 Warrants to purchase up to 2,445,700 shares
- New Series C-2 Warrants to purchase up to 1,222,850 shares
The new warrants will have an exercise price of $1.25 and will become exercisable upon stockholder approval. The Series C-1 Warrants will expire five years from approval, while the Series C-2 Warrants will expire after three years.
A.G.P./Alliance Global Partners served as the exclusive financial advisor for the transaction, which is expected to close around March 12, 2025, pending customary closing conditions.
Innovative SI Joint Technology
Tenon Medical has developed The Catamaran SI Joint Fusion System, which launched nationally in October 2022. The system features a novel approach to SI joint fusion using a single titanium implant designed to provide greater stability while minimizing invasiveness.
The Catamaran Fixation Device passes through both axial and sagittal planes of the ilium and sacrum, effectively stabilizing and transfixing the SI Joint along its longitudinal axis. The system's angle and trajectory are specifically designed to avoid critical neural and vascular structures while targeting the strongest cortical bone.
Commercial Strategy
Since launching The Catamaran system, Tenon has focused on three primary commercial opportunities:
- Primary SI Joint procedures for patients with SI joint disorders
- Revision procedures for patients with failed SI Joint implants
- SI Joint fusion as an adjunct to spine fusion constructs
SI joint dysfunction is a significant cause of lower back pain, affecting an estimated 15-30% of patients with chronic low back pain. Traditional treatments have often been invasive with lengthy recovery times, making Tenon's less invasive approach potentially valuable for both patients and healthcare providers.
Regulatory Considerations
The new warrants were offered in a private placement under exemptions from SEC registration requirements and were only available to accredited investors. Tenon has agreed to file a registration statement with the SEC covering the resale of common stock issuable upon exercise of these new warrants.
The company noted that this announcement does not constitute an offer to sell or solicitation of an offer to buy securities, and that actual results may differ from forward-looking statements due to various factors outlined in their SEC filings.
Market Context
This financing comes at a time when the market for minimally invasive SI joint fusion procedures continues to grow. With an aging population and increased awareness of SI joint disorders as a source of back pain, technologies like Tenon's Catamaran system are positioned to address a significant unmet medical need.
The additional capital is expected to help Tenon expand its market presence and continue development efforts for its innovative SI joint fusion technology.
