8-K
Sonendo, Inc. (SONX)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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): January 10, 2022 |
|---|
Sonendo, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-40988 | 20-5041718 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 26061 Merit Circle, Suite 102 | ||
| Laguna Hills, CA 92653, California | 92653 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 949 7663636 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
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:
☐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<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | SONX | New York Stock Exchange |
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 2.02 Results of Operations and Financial Condition.
On January 10, 2022, Sonendo, Inc. (the “Company”) issued a press release announcing certain unaudited preliminary revenue results for the quarter and full year ended December 31, 2021. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
As provided in General Instruction B.2 of Form 8-K, the information in this Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure
The Company has prepared an investor presentation with information about the Company, which it intends to use as part of upcoming investor presentations. A copy of the investor presentation is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information in this Item 7.01, including the information incorporated by reference herein from Exhibit 99.2, is furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
The following exhibit is furnished as part of this report:
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release issued by Sonendo, Inc., dated January 10, 2022 |
| 99.2 | Sonendo, Inc. Investor Presentation, dated January 10, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 thereunto duly authorized.
| Sonendo, Inc. | |||
|---|---|---|---|
| Date: | January 10, 2022 | By: | /s/ Bjarne Bergheim |
| Bjarne Bergheim<br>President and Chief Executive Officer |
EX-99.1
Sonendo, Inc. Announces Preliminary Revenue Results for the Fourth Quarter and Full-Year 2021
January 10, 2022, 4:00 PM Eastern Standard Time
LAGUNA HILLS, Calif. - (BUSINESS WIRE) - Sonendo, Inc. (“Sonendo”) (NYSE: SONX), a leading dental technology company and developer of the GentleWave® System, today announced certain unaudited preliminary revenue results for the fourth quarter and full-year ended December 31, 2021.
The company expects to report revenue in the range of $9.7 million to $9.9 million for the fourth quarter of 2021:
Product revenue is expected to be in the range of $7.5 million to $7.7 million for the fourth quarter of 2021 which includes:
o GentleWave console revenue is expected to be in the range of $3.0 million to $3.1 million for the fourth quarter of 2021; and
o Procedure instrument revenue is expected to be approximately $3.8 million for the fourth quarter of 2021
Software revenue is expected to be approximately $2.2 million for the fourth quarter of 2021
The company expects to report total revenue in the range of $33.0 million to $33.2 million for the full year 2021, reflecting growth of 41% to 42% when compared to $23.4 million in 2020.
“We are very proud of our quarterly results, especially the number of GentleWave consoles placed by our sales team in what is typically our strongest quarter. We’re excited to welcome more providers to the GentleWave network,” said Bjarne Bergheim, Chief Executive Officer of Sonendo. “We believe our progress in expanding our commercial field team since the IPO has put us in a great position to execute our growth strategy in 2022 and make the GentleWave Procedure the standard of care for root canal therapy.”
Bergheim continued, “I also want to express my appreciation to our customers in the United States and Canada who continue to treat patients in need during the COVID-19 pandemic. We are proud to contribute to the protection of both patients and staff by providing a single use, sterile procedure instrument, allowing doctors to clean and disinfect a root canal while producing substantially no aerosol.”
About Sonendo
Sonendo is a commercial-stage medical technology company focused on saving teeth from tooth decay, the most prevalent chronic disease globally. Sonendo has developed the GentleWave® System, an innovative technology platform designed to treat tooth decay by cleaning and disinfecting the microscopic spaces within teeth without the need to remove tooth structure. The system utilizes a proprietary mechanism of action, which combines procedure fluid optimization, broad-spectrum acoustic energy and advanced fluid dynamics, to debride and disinfect deep regions of the complex root canal system in a less invasive procedure that preserves tooth structure. The clinical benefits of the GentleWave System when compared to conventional methods of root canal therapy include improved clinical outcomes, such as superior cleaning that is independent of root canal complexity and tooth anatomy, high and rapid rates of healing and minimal to no post-operative pain. In addition, the GentleWave System can improve the workflow and economics of dental practices. Sonendo is also the parent company of TDO® Software, the developer of widely used endodontic practice management software solutions, designed to simplify practice workflow. TDO Software integrates practice management, imaging, referral reporting and CBCT imaging, and offers built-in communication with the GentleWave System.
Preliminary Financial Information
The anticipated results discussed in this press release are based on management’s preliminary, unaudited analysis of financial results for the quarter ended and year ended December 31, 2021. As of the date of this press release, the company has not completed its quarter-end and year-end procedures for such periods, and the company’s independent registered accounting firm has not reviewed or audited the preliminary financial data discussed in this press release. During the course of the company’s quarter-end and year-end closing procedures and audit process, the company may identify items that would require it to make adjustments, which may be material to the information presented above. As a result, the estimates above constitute forward-looking information and are subject to risks and uncertainties, including possible adjustments to preliminary operating results.
Forward Looking Statements
This press release contains “forward-looking statements” based on Sonendo’s current expectations, forecasts and beliefs including statements related to Sonendo’s anticipated revenue results for the fourth quarter and year ended December 31, 2021. These forward-looking statements are subject to inherent uncertainties, risks, and assumptions that are difficult to predict. Actual outcomes and results could differ materially due to a number of factors, including the company’s completion of its quarter-end and year-end closing procedures and audit process and other risks and uncertainties described more fully in the section titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in its public filings with the U.S. Securities and Exchange Commission (SEC), including the prospectus filed with the SEC pursuant to Rule 424(b)(4) on November 1, 2021, the Quarterly Report on Form 10-Q for the period ended September 30, 2021 filed with the SEC on December 9, 2021, as well as any reports that we may file with the SEC in the future. Forward-looking statements contained in this announcement are based on information available to Sonendo as of the date hereof. Sonendo undertakes no obligation to update such information except as required under applicable law. These forward-looking statements should not be relied upon as representing Sonendo’s views as of any date subsequent to the date of this press release and should not be relied upon as prediction of future events. In light of the foregoing, investors are urged not to rely on any forward-looking statement in reaching any conclusion or making any investment decision about any securities of Sonendo.
Investor Contact:
Gilmartin Group
Matt Bacso, CFA
Matt.bacso@gilmartinir.com
January 2022
Disclaimer and Confidentiality Notice This presentation contains forward-looking statements with respect to the Company. These forward-looking statements, by their nature, require the Company to make certain assumptions and necessarily involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, including without limitation the successful and timely completion and the commercialization of the products referred to herein, addressable markets, entering other markets and any plans and objectives of management for future operations and future results. Forward-looking statements are not guarantees of performance. These forward-looking statements, including financial outlooks and strategies or deliverables stated herein, may involve, but are not limited to, comments with respect to the Company’s business or financial objectives, its strategies or future actions, its targets, expectations for financial condition or outlook for operations. Words such as “may”, “will”, “would”, “could”, “expect”, “believe”, “plan”, “anticipate”, “intend”, “estimate”, “continue”, or the negative or comparable terminology, as well as terms usually used in the future and conditional, are intended to identify forward-looking statements. Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. These assumptions are considered to be reasonable based on currently available information, but the reader is cautioned that these assumptions regarding future events, many of which are beyond its control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect the Company and its business. The forward-looking information set forth therein reflects expectations as of the date hereof and is subject to change thereafter. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Undue reliance should not be placed on forward- looking statements. We operate in a very competitive and rapidly changing environment. New risk factors and uncertainties may emerge from time to time, and it is not possible to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances described in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements contained in this presentation. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. Certain information contained in this presentation and statements made orally during this presentation relate to or are based on studies, publications, surveys, and other data obtained from third party sources and Sonendo’s own internal estimates and research. While Sonendo believes these third-party sources to be reliable as of the date of this presentation, it has not independently verified, and makes no representation as to the adequacy, fairness, accuracy, or completeness of, any information obtained from third party sources. While Sonendo believes its internal research is reliable, such research has not been verified by any independent source. Sonendo’s estimates are derived from publicly available information, management’s knowledge of the Sonendo’s industry and management’s assumptions based on such information and knowledge, which they believe to be reasonable. This data involves a number of assumptions and limitations which are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy our securities. All amounts are in U.S. dollars unless otherwise indicated.
Our Mission Improve Quality of Life by Saving Teeth and Stopping the Progression of Tooth Decay Establish the GentleWave Procedure as the Standard of Care for Tooth Decay, with an Initial Focus on Transforming Root Canal Therapy
Strong and Experienced Leadership Team Introducing the Team Bjarne Bergheim President & CEO Michael Watts Chief Financial Officer Michael Smith Chief Commercial Officer Mehrzad Khakpour, PhD Chief Technology Officer Jacqueline Collins VP, General Counsel Andrew Kirkpatrick Chief Operating Officer Roy Chen Chief Talent Officer
Key Success Factors for Sonendo Paradigm-Shifting Platform Technology for Tooth Decay Compelling and Growing Body of Clinical and Real-World Evidence Established and Growing Digital Infrastructure Recurring Revenue Business Model Large Market Opportunity with Significant Need for Innovation Transformative R&D Capabilities and a Robust Intellectual Property Portfolio Attractive Value Proposition for Dental Practitioners and Patients 1 7 2 3 4 5 6
~17 Million Root Canal Procedures Performed Annually in the U.S. and Canada Large Market For Root Canal Therapy (RCT) Non-Referring General Practitioners (GPs) (~50,000) ~9 million Annual Root Canal Procedures Remaining General Practitioners (GPs) (~126,000) ~4 million Annual Root Canal Procedures Endodontists (~5,000) ~4 million Annual Root Canal Procedures Global prevalence of additional 30+ million procedures annually outside of the U.S. and Canada Sonendo’s Potential Annual Addressable Market Opportunity for Root Canal Procedures in the U.S. and Canada $1.9 Billion 6
The Root Canal System is Complex Endodontic Biofilm Root Canal Dentin Dentin Root Canals are Complex… …Making Them Difficult to Effectively and Efficiently Clean Bacteria are smaller than anatomical features in the tooth Canals are increasingly complicated in hardest to reach areas Bacteria penetrates the microscopic spaces in the root canal system The Problem Unique for Each Person, Root and Tooth Include Branches and Connections Between Canals May Bifurcate into Multiple Canals or Converge into One Canal Exhibit Unpredictable Three-Dimensional Curvature 7
Limitations of Conventional RCT Ng YL. et al. Outcome of primary root canal treatment: systematic review of the literature - part 1. Effects of study characteristics on probability of success. Int Endod J. 2007; 40(12):921-39. POOR CLINICAL OUTCOMES RCT treatment failure ranges from 15% to 32%1 29% to 70% of patients report post-operative pain LACK OF STANDARDIZED PROTOCOLS Lack of standardized protocols for most critical steps of RCT Contributes to unpredictable procedure times and outcomes INEFFECTIVE CLEANING Files only touch 35% to 65% of the surface of the root canal >74% of canals show signs of residual tissue and bacteria EXTENSIVE USE OF INSTRUMENTATION Weakens tooth and impacts long-term survival Increases likelihood of procedural errors and other complications COMPLEX PROCEDURE Difficult procedure relies heavily on clinician skills Uses aerosol-generating devices NEED FOR MULTIPLE VISITS Approximately half of root canal procedures require multiple visits Causes patient inconvenience and impacts practice economics Limitations in Clinical Outcomes Limitations in Clinical Workflow 8
First and only FDA-cleared system for RCT that employs a sterilized, single-use procedure instrument to automate the cleaning of root canals Superior cleaning and disinfection of microscopic spaces independent of root canal complexity and tooth structure Intuitive touchscreen interface simplifies procedure setup and treatment delivery Wireless connectivity capabilities enables automatic software updates, remote monitoring of the system and real-time tracking of system utilization GentleWave System: Transforming RCT 9
vs GentleWave Procedure Conventional RCT GentleWave Procedure Enables Superior Cleaning 10
In-Vivo and In-Vitro in… In Real-World, Clinical Practice, with… 2 Prospective, Multi-Center Clinical Studies 30+ Peer-Reviewed Journal Publications ~820 GentleWave System Installed Base Clinical and Commercial Validation of the GentleWave Procedure The Clinical Benefits of the GentleWave System Have Been Demonstrated… [] + Strong Clinical Outcomes & Superior Cleaning in a Less Invasive Procedure Enhanced Procedure Efficiency …and Has Been Clinically Proven to Provide… 700k+ Patients Treated with the GentleWave System 1 2
1 PURE Study: Single-Arm, Multi-Center, Prospective, Non-Significant Risk Clinical Study Strong Clinical Outcomes Note: Data for GentleWave and conventional RCT is from separate studies. Clinical data is not head-to-head. Ng YL. et al. Outcome of primary root canal treatment: systematic review of the literature - part 1. Effects of study characteristics on probability of success. Int Endod J. 2007; 40(12):921-39. Sigurdsson A, Garland RW, Le KT, Woo SM. 12-month Healing Rates after Endodontic Therapy Using the Novel GentleWave System: A Prospective Multicenter Clinical Study. J Endod. 2016; 42(7):1040-8. Ince B, Ercan E, Dalli M, Dulgergil CT, Zorba YO, Colak H. Incidence of postoperative pain after single- and multi-visit endodontic treatment in teeth with vital and non-vital pulp. Eur J Dent. 2009;3(4):273-9. High and Rapid Rates of Healing1 Minimal to No Post-Operative Pain2,3,4,5 68%-85% Range GentleWave Procedure: 97% Success Rate Conventional RCT: Estimated 68-85% Success Rate GentleWave Procedure: Minimal to No Post-Op Pain Conventional RCT: 29-70% of Patients Report Post-Op Pain Gambarini G, Testarelli L, De Luca M, Milana V, Plotino G, Grande NM, Rubini AG, Al Sudani D, Sannino G. The influence of three different instrumentation techniques on the incidence of postoperative pain after endodontic treatment. Ann Stomatol (Roma). 2013;4(1):152-5. Wong AW, Zhang S, Li SK, Zhu X, Zhang C, Chu CH. Incidence of post-obturation pain after single-visit versus multiple-visit non-surgical endodontic treatments. BMC Oral Health. 2015;15:96. 12
Proven, Real-World Results Supported by Clinical Studies and Commercial Experience Enhanced Procedure Efficiency Clinical Study Results Patients Treated in a Single Visit Using the GentleWave System2 Patients with Periapical Lesions Treated in a Single Visit Using the GentleWave System3 GentleWave Procedure Customer Survey1 + 92% 89% Includes data from Sonendo’s GentleWave Procedure customer survey conducted in October 2020 (n=33) where users were polled about percent of single-visit RCT cases and impact on per patient file costs before/after adopting the GentleWave System Sigurdsson A, Garland RW, Le KT, Woo SM. 12-month Healing Rates after Endodontic Therapy Using the Novel GentleWave System: A Prospective Multicenter Clinical Study. J Endod. 2016; 42(7):1040-8. Sigurdsson A, Garland RW, Le KT & Rassoulian SA. Healing of Periapical Lesions After Endodontic Treatment with the GentleWave Procedure: A Prospective Multicenter Clinical Study. Journal of Endodontics. 2018;44(3):510-517. 13 2
Establishing the GentleWave Procedure as the Standard of Care for RCT U.S. and Canada Commercial Strategy How? 1 Grow GentleWave Installed Base 2 Increase GentleWave Procedure Utilization 3 Drive Patients to GentleWave Providers Increase Referrals Targeted Direct-to-Patient Marketing Increase Awareness and Education Increase Team of Capital Sales Reps to Drive GentleWave Console Sales Expand Team of Consumable Sales Reps to Drive Utilization Partner with Clinicians Core Pillars of Sonendo’s Commercial Strategy 14
How We Structure Our Sales Team CAPITAL SALES REP Increase Market Penetration CONSUMABLE SALES REP Drive Account Utilization KEY RESPONSIBILITIES Win new business Establish customer relationships Target key opportunities Focus on GentleWave Console placements Grow installed base of GentleWave Consoles KEY RESPONSIBILITIES Increase utilization in existing GentleWave practices Onboarding, clinical education and training Improve practice efficiency Drive patient referral volumes 15
CleanFlow PI Our Next Generation Procedure Instrument TM
CleanFlow Procedure Instrument: Driving Procedure Simplicity No components placed inside tooth Simplified & Intuitive Value for Sonendo Commercial Status Cleans inside of tooth from outside Reduces procedure steps Easier and less technique-sensitive Confidence to use on more cases Fewer parts and easier to assemble Improved customer utilization Easier to teach procedure Expect to have positive impact on gross margins of single-use PIs Positive clinical and usability feedback Expect to be fully commercialized in 2022 Expected future expansion of indications Molar PI CleanFlow PI Clean Flow Procedure Instrument 17
Our Key Growth Strategies Focused on Driving Long-Term, Sustainable Growth Strategy Key Elements Execute U.S. and Canada Commercial Strategy Reduce Costs and Improve Production Efficiencies Invest in R&D Initiatives Expand into International Markets Expand sales and marketing teams Grow installed base Increase utilization Drive patients to providers Launch CleanFlow Realize operating leverage Implement lean manufacturing methods Reduce material costs Enhance usability, efficiency and predictability Perform additional elements of the root canal procedure Expand beyond RCT to treat cavities Pursue regulatory approvals and related certifications Engage in market access initiatives in attractive international markets Focused on Driving Long-Term, Sustainable Growth 18
2021 Financial Highlights $33.0 to $33.2million Full Year 2021 Estimate ~820 Consoles Placed Revenue Installed Base Sales Territories 24 (Covering US and Canada) We had 16 capital sales reps at the end of Q2’21
Key Success Factors for Sonendo Paradigm-Shifting Platform Technology for Tooth Decay Compelling and Growing Body of Clinical and Real-World Evidence Established and Growing Digital Infrastructure Recurring Revenue Business Model Large Market Opportunity with Significant Need for Innovation Transformative R&D Capabilities and a Robust Intellectual Property Portfolio Attractive Value Proposition for Dental Practitioners and Patients 1 7 2 3 4 5 6 20
Thank you