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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): September 10, 2024
SANARA
MEDTECH INC.
(Exact
name of registrant as specified in its charter)
Texas |
|
001-39678 |
|
59-2219994 |
(State
or other jurisdiction |
|
(Commission |
|
(IRS
Employer |
of
incorporation) |
|
File Number) |
|
Identification
No.) |
1200
Summit Avenue, Suite 414
Fort
Worth, Texas |
|
76102 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (817) 529-2300
(Former
name or former address, if changed since last report)
Not
Applicable
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
|
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, $0.001 par value |
|
SMTI |
|
The
Nasdaq Capital Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
7.01 Regulation FD Disclosure.
On
September 11, 2024, Sanara MedTech Inc. (the “Company”) issued a press release announcing the Unit Purchase Agreement
(defined below). A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference
herein.
The
information included under Item 7.01 (including Exhibit 99.1) is furnished pursuant to Item 7.01 and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise be subject to
the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in
such filing.
Item
8.01 Other Events.
On
September 10, 2024, Sanara CMP LLC, a wholly owned subsidiary of the Company (“Sanara CMP”), entered into a Unit Purchase
Agreement (the “Unit Purchase Agreement”) with ChemoMouthpiece, LLC (“CMp”), pursuant to which Sanara CMP purchased
100,674.72 common units in CMp for $5.0 million, which represents approximately 6.64% of the issued and outstanding membership interests
of CMp immediately following such purchase. CMp is a privately held medical device company that develops and commercializes propriety
oral cryotherapy products for cancer patients, including, among other things, CMp’s Chemo Mouthpiece® oral cryotherapy
device, which is a 510(k) cleared cryotherapy device designed to reduce the incidence and severity of chemotherapy induced oral mucositis.
In
connection with the Unit Purchase Agreement, the Company, CMp, certain subsidiaries of CMp, InfuSystem, Inc. (“InfuSystem”)
and SI Healthcare Technologies, LLC, a joint venture entity owned 50/50 by the Company and InfuSystem (“SI Technologies”),
entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) pursuant to which SI Technologies was appointed
as the sole and exclusive U.S. distributor of CMp’s Standard Chemo Regiment Kits, each kit consisting of the Chemo Mouthpiece®
oral cryotherapy device and associated materials used in the treatment of oral mucositis (the “Product”), for a
term of five years. In addition, the parties to the Distribution Agreement entered into an Intellectual Property Rights Agreement pursuant
to which SI Technologies was granted the exclusive right to use CMp’s intellectual property rights to permit resale and use of
the Product in the United States.
On
September 4, 2024, the Company, pursuant to its option under its previously disclosed Term Loan Agreement with CRG Servicing LLC dated
as of April 17, 2024 (the “Loan Agreement”) borrowed an additional $15.5 million under the Loan Agreement (the “Second
Borrowing”). As previously disclosed, the Loan Agreement provides for up to a $55.0 million term loan facility, $15.0 million of
which was borrowed at closing on April 17, 2024 (the “First Borrowing”). The First Borrowing and the Second Borrowing each
have a maturity date of May 30, 2029, unless earlier prepaid, and bear interest at 13.25% per annum rate. Pursuant to the Loan Agreement,
prior to June 30, 2025 and subject to the satisfaction of certain conditions, the Company has the right to draw down a third borrowing
of up to $24.5 million. The Company used $5.0 million of the proceeds of the Second Borrowing for the investment in CMp and intends to
use the remaining proceeds for permitted acquisition opportunities and for general working capital and corporate purposes.
The
description of the Loan Agreement included in Item 1.01 of the Company’s Current Report on Form 8-K filed on April 18, 2024 (the
“April 2024 8-K”), is incorporated herein by reference. The description of the Loan Agreement contained herein does not purport
to be complete, and is qualified in its entirety by reference to the complete text of the Loan Agreement filed as Exhibit 10.1 to the
April 2024 8-K.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
September 11, 2024 |
|
|
|
|
|
|
Sanara
MedTech Inc. |
|
|
|
|
By: |
/s/
Michael D. McNeil |
|
Name: |
Michael D. McNeil |
|
Title: |
Chief Financial Officer |
Exhibit
99.1
Sanara
MedTech Inc. and InfuSystem Holdings, Inc. Announce Exclusive United States Distribution Agreement with, and Minority Investment in,
ChemoMouthpiece, LLC
FORT
WORTH, TX / GlobeNewswire / September 11, 2024 / Sanara MedTech Inc. Based in Fort Worth, Texas, Sanara MedTech Inc. (“Sanara,”
the “Company,” “we,” “our” or “us”) (NASDAQ: SMTI), a medical technology company focused
on improving clinical outcomes and reducing healthcare expenditures in the surgical, chronic wound and skincare markets, and InfuSystem,
Inc. (“InfuSystem”), the operational subsidiary of Sanara’s joint venture partner InfuSystem Holdings, Inc., announced
today the execution of an exclusive United States distribution agreement with, and minority investment in, ChemoMouthpiece, LLC (“ChemoMouthpiece”).
Ron
Nixon, Sanara’s CEO, stated, “Oral mucositis is a debilitating condition impacting hundreds of thousands of oncology patients
annually. ChemoMouthpiece has developed a clinically validated product with FDA 510(k) clearance that can bring relief to affected patients.
The American Medical Association has recently issued the CPT code (effective July 2024) to be applied for potential reimbursement by
physicians and payers for the use of an oral cavity device for a cryotherapy procedure in conjunction with chemotherapy. The product
aligns well with Sanara’s skincare strategy, which includes the licensed collagen peptides from Tufts University that focus on
radiation dermatitis. We look forward to providing the Chemo Mouthpiece® oral cryotherapy device to oncology patients undergoing
chemotherapy.”
Transaction
Overview
| ● | ChemoMouthpiece
owns and manufactures a 510(k) cleared device that uses cryotherapy to reduce the incidence
and severity of oral mucositis in patients undergoing stomatotoxic chemotherapy treatments. |
| ● | SI
Healthcare Technologies, LLC (f/k/a SI Wound Care, LLC) (“SI Technologies”),
a 50/50 joint venture between Sanara and InfuSystem, will be the exclusive distributor
of ChemoMouthpiece’s kits in the United States. |
| ● | SI
Technologies plans to market and distribute the product through InfuSystem to approximately
3,000 cancer centers through InfuSystem’s existing sales team. |
| ● | SI
Technologies will purchase the product kits from ChemoMouthpiece at a fixed price and
pay a royalty on net revenues for the use of the product intellectual property. |
| ● | Sanara
invested $5 million for a 6.6% ownership position in ChemoMouthpiece. |
| ● | SI
Technologies will have a purchase option that expires on January 31, 2029 to purchase the
U.S. business of ChemoMouthpiece, including all U.S. intellectual property related to the
product. |
| ● | Sanara
has drawn $15.5 million on its term loan with CRG Servicing, LLC and will fund this investment
as part of that draw. |
Oral
Mucositis
Oral
mucositis causes painful mouth ulcers, which are a common complication of chemotherapy and radiation. In the U.S., there are an estimated
500,000 – 1,000,000 patients who have oral mucositis annually and the estimated market size exceeds $600 million. SI Technologies
believes this product will show material cost reductions for oncology treatment centers, improve patient quality of life and allow for
continued treatment of cancer therapy for patients. ChemoMouthpiece is planning to publish studies in the future reinforcing the efficacy
of their product.
Richard
Dilorio, InfuSystem’s CEO, stated, “Sanara and InfuSystem entered into our partnership in order to bring together our combined
technical, operational and commercial strengths to deliver proprietary efficacious products to patients. We believe this exclusive agreement,
which builds on our partnership, will allow us to do that by offering the Chemo Mouthpiece®
oral cryotherapy device and bringing potential relief to thousands of cancer patients suffering from oral mucositis.”
David
Yoskowitz, ChemoMouthpiece’s President and CEO stated, “We are pleased to have selected SI Technologies as our exclusive
distribution partner in the United States. We believe that InfuSystem’s experienced team of seasoned oncology professionals currently
calling on approximately 3,000 U.S. cancer centers will accelerate the uptake of the Chemo Mouthpiece, bringing a much-needed option
for patients that would otherwise suffer from the debilitating effects of oral mucositis.” David added, “We understand that
the executive team of SI Technologies has a long history of launching products into the oncology space, and coupled with Sanara’s
ownership position in ChemoMouthpiece, we are confident that they will execute the successful launch of the Chemo
Mouthpiece® oral cryotherapy device.”
Pickwick
Capital Partners, LLC, served as the exclusive advisor to ChemoMouthpiece on this transaction.
About
ChemoMouthpiece, LLC
ChemoMouthpiece,
LLC is a privately held medical device company that develops and commercializes propriety oral cryotherapy products for cancer patients.
The Chemo Mouthpiece® oral cryotherapy device was developed based on the personal experience of inventor, founder and CEO, David
Yoskowitz, who when diagnosed with Hodgkin’s Lymphoma, experienced oral mucositis firsthand. His treatment options included ice
chips to mitigate and minimize the pain. Yet this caused nausea, was difficult to maintain in his mouth, and did not effectively cool
the entire oral cavity which led him to search for a better option. The Chemo Mouthpiece® oral cryotherapy device cools down the
entire oral cavity, causing vasoconstriction, which in effect slows and reduces the flow of chemotherapy in the oral cavity, thus greatly
reducing the risk of developing oral mucositis. The cryotherapy approach has been positively studied for decades and the Chemo Mouthpiece®
oral cryotherapy device has significant and improved advantages over conventional cryotherapy interventions. For more information on
ChemoMouthpiece, LLC, please visit its website at www.chemomouthpiece.com.
About
Sanara MedTech Inc.
Sanara
MedTech Inc. is a medical technology company focused on developing and commercializing transformative technologies to improve clinical
outcomes and reduce healthcare expenditures in the surgical, chronic wound and skincare markets. The Company markets, distributes and
develops surgical, wound and skincare products for use by physicians and clinicians in hospitals, clinics and all post-acute care settings
and offers wound care and dermatology virtual consultation services via telemedicine. Sanara’s products are primarily sold in the
North American advanced wound care and surgical tissue repair markets. Sanara markets and distributes CellerateRX® Surgical
Activated Collagen, FORTIFY TRG® Tissue Repair Graft and FORTIFY FLOWABLE® Extracellular Matrix as well
as a portfolio of advanced biologic products focusing on ACTIGENTM Verified Inductive Bone Matrix, ALLOCYTE®
Plus Advanced Viable Bone Matrix, BiFORM® Bioactive Moldable Matrix, TEXAGEN® Amniotic Membrane Allograft,
and BIASURGE® Advanced Surgical Solution to the surgical market. In addition, the following products are sold in the wound
care market: BIAKOS® Antimicrobial Skin and Wound Cleanser, BIAKOS® Antimicrobial Wound Gel,
and BIAKOS® Antimicrobial Skin and Wound Irrigation Solution. Sanara’s pipeline also contains potentially
transformative product candidates for mitigation of opportunistic pathogens and biofilm, wound re-epithelialization and closure, necrotic
tissue debridement and cell compatible substrates. The Company believes it has the ability to drive its pipeline from concept to preclinical
and clinical development while meeting quality and regulatory requirements. Sanara is constantly seeking long-term strategic partnerships
with a focus on products that improve outcomes at a lower overall cost.
About
InfuSystem Holdings, Inc.
InfuSystem
Holdings, Inc. (NYSE American: INFU), is a leading national health care service provider, facilitating outpatient care for durable medical
equipment manufacturers and health care providers. INFU services are provided under a two-platform model. The first platform is Patient
Services, providing the last-mile solution for clinic-to-home healthcare where the continuing treatment involves complex durable medical
equipment and services. The Patient Services segment is comprised of Oncology, Pain Management and Wound Therapy businesses. The second
platform, Device Solutions, supports the Patient Services platform and leverages strong service orientation to win incremental business
from its direct payer clients. The Device Solutions segment is comprised of direct payer rentals, pump and consumable sales, and biomedical
services and repair. Headquartered in Rochester Hills, Michigan, the Company delivers local, field-based customer support and also operates
Centers of Excellence in Michigan, Kansas, California, Massachusetts, Texas and Ontario, Canada.
Information
about Forward-Looking Statements
The
statements in this press release that do not constitute historical facts are “forward-looking statements,” within the meaning
of and subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements may be identified
by terms such as “aims,” “anticipates,” “believes,” contemplates,” “continue,”
“could,” “estimates,” “expect,” “forecast,” “guidance,” “intend,”
“may,” “plan,” “possible,” “potential,” “predicts,” “preliminary,”
“projects,” “seeks,” “should,” “targets,” “will” or “would,”
or the negatives of these terms, variations of these terms or other similar expressions. These forward-looking statements include, among
others, statements regarding the ability to market and distribute the Chemo Mouthpiece device. These items involve risks, contingencies
and uncertainties such as the ability to penetrate oncology hospitals and clinics, the extent of product demand, market and customer
acceptance, the effect of economic conditions, competition, pricing, uncertainties associated with the development and process for obtaining
regulatory approval for new products, the ability to consummate and integrate acquisitions, and other risks, contingencies and uncertainties
detailed in the Company’s SEC filings, which could cause the Company’s actual operating results, performance or business
plans or prospects to differ materially from those expressed in, or implied by these statements.
All
forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to revise any of
these statements to reflect the future circumstances or the occurrence of unanticipated events, except as required by applicable securities
laws.
Investor
Contact:
Callon
Nichols, Director of Investor Relations
713-826-0524
CNichols@sanaramedtech.com
SOURCE:
Sanara MedTech Inc.
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Sanara MedTech (NASDAQ:SMTI)
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