Vapotherm Announces Debt Amendment and NYSE Continued Listing Standard Notice

EXETER, NH–(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 used in treatment Patients of all ages suffering from shortness of breath announced today that on September 30, 2022 the Company issued Amendment No. 2 to the Loan and Security Agreement (the “Second Amendment”, together with the Loan and Security Agreement, the “Amended Loan and Security Agreement”) with SLR Investment Corp. as collateral administrator and the lenders involved.

In addition, the Company announced that on September 27, 2022 it was notified (the “Notice”) by the New York Stock Exchange, Inc. (the “NYSE”) that the Company was failing to comply with the NYSE’s continuing listing standards is due to the fact that the company’s average market capitalization over a 30 consecutive trading day period is less than $50 million and the company’s most recently reported equity is also less than $50 million.

Second Amendment to the Loan and Surety Agreement

In February 2022, the Company entered into its loan and security agreement (the “Loan and Security Agreement”), which provided the Company with a Term A loan facility (the “Term A Loan Facility”) of $100 million and a Term $25 million -B Loan Facility (the “Term B Loan Facility”), available in 2023 upon the achievement of a revenue milestone. The Loan and Security Agreement matures on February 1, 2027 (the “Maturity Date”). On September 30, 2022 (the “Effective Date”), the Company completed the second amendment, which includes:

  • A change to the Company’s minimum sales agreement for the remainder of 2022;

  • The addition of a $20 million minimum liquidity agreement;

  • replacing LIBOR with the secured overnight funding rate;

  • An increase in exit fee from 6.95% to 7.45% of the total principal amount of the Modified Loan and Security Agreement, payable no earlier than (i) the Maturity Date and (ii) Prepayment of the Modified Loan and Modified Security Agreement;

  • elimination of the Term B Loan Facility and associated $225,000 setup fee; and

  • A reset of the exercise price of warrants to purchase 107,373 common shares of the Company issued to lenders on February 18, 2022 in connection with the financing of the Term-A Loan Facility to a new exercise price of $1.63 per share.

Standard Notice of Continued Listing on NYSE

As set forth in the announcement, the Company’s average 30 trading day market capitalization as of September 27, 2022 was approximately $48.8 million and the Company’s most recently reported equity as of June 30, 2022 was approximately $13.7 million. Dollar.

In accordance with NYSE rules, the Company intends to notify the NYSE within 10 business days of receipt of notice that the Company intends to remedy the deficiency. Under the rules of the NYSE, the Company has 45 days from receipt of the Notice to submit a plan (the “Plan”) informing the NYSE of the final actions that the Company has taken or is in the process of taking would bring into line listed standards within 18 months of receipt of notification. Within 45 days of receiving the plan, the NYSE will determine whether the company has adequately demonstrated its ability to comply with the relevant standards over the 18-month period. If the NYSE accepts the plan, the company’s common stock will continue to be listed and traded on the NYSE during the 18-month healing period, subject to the company’s compliance with other ongoing listing standards, and the company will be monitored quarterly by the NYSE for compliance with the plan . The Company’s common stock will continue to trade under the symbol “VAPO” but will receive the additional designation “.BC” to indicate the common stock’s “below compliance” status.

The NYSE announcement does not adversely affect the Company’s operations or its reporting requirements with the Securities and Exchange Commission, nor does it conflict with or cause a default under any of the Company’s debt covenants.

About Vapotherm

Vapotherm, Inc. (NYSE: VAPO) is a publicly traded developer and manufacturer of advanced ventilation technology based in Exeter, New Hampshire, USA. The company develops innovative, comfortable, non-invasive respiratory support technologies for patients with chronic or acute respiratory disorders. Over 3.5 million patients have been treated with Vapotherm High Velocity Therapy® systems. Visit www.vapotherm.com for more information.

Vapotherm High Velocity Therapy is maskless, non-invasive ventilatory support and a premier tool for relieving respiratory distress – including hypercapnia, hypoxemia and dyspnea. It enables the fast and safe treatment of undifferentiated shortness of breath with one instrument. The maskless interface of the Precision Flow systems delivers optimally conditioned breathing gases that keep patients comfortable and reduce the risks and care complexities associated with mask therapies. During treatment, patients can talk, eat, drink, and take oral medications.

Website Information

Vapotherm routinely posts important investor relations information on its website at http://investors.vapotherm.com/. Vapotherm intends to use this website as a means of disclosing material, non-public information and to comply with Vapotherm’s disclosure obligations under Regulation FD. Accordingly, investors should keep an eye on the Investor Relations section of Vapotherm’s website, in addition to monitoring Vapotherm’s press releases, filings with the Securities and Exchange Commission, public conference calls, presentations and webcasts. The information contained on or accessible from Vapotherm’s website is not incorporated by reference into this document and does not form part of this document.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements pursuant to the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including intentions to regain compliance with NYSE standards for continued listing. In some instances, you can identify forward-looking statements by using words such as “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “believe,” “estimate,” “predict,” or “continue.” ‘ or the negative of such terms or other similar expressions, although not all forward-looking statements contain those words, and use of future data. Any forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Applicable risks and uncertainties include, but are not limited to, the following: Vapotherm’s future financial performance and results of operations; its need for additional funding; its ability to regain compliance with NYSE listing standards; risks related to moving its manufacturing facilities to Mexico; its dependence on revenue from its Precision Flow systems; competition from multinational corporations that have significantly greater resources than Vapotherm and are more established in the respiratory market; the ability of Precision Flow systems to gain increased market acceptance; Vapotherm’s inexperience in 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 variations; Vapotherm’s failure to comply with applicable governmental requirements of the United States and other countries; its failure to obtain US Food and Drug Administration or other regulatory approval for the marketing and sale of future products, or its inability to secure, maintain, or enforce patents 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 detailed under the heading “Risk Factors” in Vapotherm’s annual report on Form 10-K for the 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 June 30, 2022 as filed with the Securities and Exchange Commission on August 3, 2022, and all other subsequent filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release reflect the views of Vapotherm as of the date of this release, and Vapotherm assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be the case required by law.

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