LAAA - ProSomnus Sleep Technologies signs $30M debt financing ahead of debut with SPAC Lakeshore

• ProSomnus Sleep Technologies, which is set to go public in reverse merger deal with SPAC Lakeshore Acquisition I ( NASDAQ: LAAA ), has announced financing deal on Friday.
• The company stated it has signed definitive agreements with institutional investors of Cohanzick Management and CrossingBridge Advisors' managed funds, comprising of $30M financing to be raised in the convertible notes issue.
• The facility is to broken down into two-tranches: $15M of senior secured convertible notes and $15M of junior secured convertible notes with maturities of 36 months and 40 months, respectively.
• That's where the senior debt is set at an initial conversion price of $13, to be reset at 5% premium half-yearly while the conversion price for subordinated debt is tuned to $11.50.
• The notes are reported to be issued by the combined company as pending merger of ProSomnus and Lakeshore Acquisition I is scheduled to be completed by Dec. 10, 2022.
• ProSomnus Sleep Technologies, a maker of oral appliance therapy devices to treat Obstructive Sleep Apnea, announced its business combination deal with SPAC Lakeshore Acquisition I on May. 10.
• The transaction implies a pro forma enterprise value for the combined company of $168M, which equates to approximately 4.3x projected FY 2023 revenue of $38 – 40M, at the midpoint.
• Once the deal goes through, the stock of combined company will be listed on Nasdaq under the ticker symbol "OSA"
• ProSomnus said it "intends to use a portion of the proceeds of the facility to fund multiple strategic growth initiatives, many of which are already underway."
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