Merger LAAA

Sleep Apnea Device Maker ProSomnus to Merge with Lakeshore Acquisition I

, SPAC research

ProSomnus Holdings Inc. , the leader in patient-preferred medical devices for the treatment of obstructive sleep apnea, and Lakeshore Acquisition I Corp. (“Lakeshore”) (Nasdaq: LAAA) today announced that they have entered into a definitive business combination agreement. Upon closing, the combined company is expected to change its name to ProSomnus, Inc. and its Class A common stock is expected to be traded on the Nasdaq Capital Market under the symbol “OSA.

ProSomnus is the first manufacturer of precision, mass-customized oral appliance therapy devices to treat obstructive sleep apnea, which affects over 74 million Americans and is associated with serious comorbidities, including heart failure, stroke, hypertension, morbid obesity and type 2 diabetes. ProSomnus’s patented devices are a more comfortable and less invasive alternative to continuous positive airway pressure (CPAP) therapy, and lead to more effective and patient-preferred outcomes. With more than 150,000 patients treated, ProSomnus’s devices are the most prescribed oral appliance therapy in the U.S. To learn more, visit

Pursuant to the business combination agreement, Lakeshore will acquire ProSomnus for $125 million (including the assumption of $13 million of debt that will be paid off at closing). In connection with the transaction, (i) Lakeshore will issue approximately 11 million newly issued shares to current stockholders of ProSomnus (subject to the actual amount of net debt outstanding, at closing), (ii) Cohanzick Management and CrossingBridge Advisors are expected to lead and backstop a $30 million senior and junior convertible note investment, and (iii) the parties expect to receive a minimum additional $10 million in equity from a PIPE or from Lakeshore’s trust account. Current stockholders of ProSomnus may also be entitled to an earn-out of up to an additional 3 million shares in three tranches if certain trading price targets are met within three years after closing. The transaction implies a pro forma enterprise value for the combined company of approximately $168 million, which equates to approximately 4.3x projected FY 2023 revenue of $38 – 40 million, at the midpoint. The transaction is expected to close in the third quarter of 2022.

Solomon Partners and Gordon Pointe Capital, LLC are acting as financial advisors to ProSomnus. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is acting as legal advisor to ProSomnus and Loeb & Loeb is acting as legal advisor to Lakeshore. Craig-Hallum Capital Group and Roth Capital Partners are acting as joint placement agents on the PIPE. Craig-Hallum Capital Group is acting as M&A advisor to Lakeshore.

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