Filed Pursuant to Rule 424(b)(3)
Registration No. 333-276590
PROSPECTUS SUPPLEMENT NO. 10
To Prospectus dated May 2, 2024
Up to 18,041,060 Shares of Class A Common Stock
Issuable Upon Exercise of Warrants
Up to 3,913,043 Shares of Class A Common Stock
Issuable Upon Conversion of Series A Preferred Stock
13,418,923 Shares of Class A Common Stock
3,874,394 Warrants
This prospectus supplement no. 10 supplements
the prospectus dated May 2, 2024 (the “Prospectus”), which forms a part of the Registration Statement on Form S-1 (Registration
No. 333-276590). Capitalized terms used in this prospectus supplement and not otherwise defined herein have the meanings specified in
the Prospectus.
The Prospectus relates to the issuance by us of
up to an aggregate of 21,954,103 shares of our Class A Common Stock, consisting of (i) up to 14,166,666 shares of Class A Common Stock
that are issuable upon the exercise of 14,166,666 Public Warrants originally issued by our predecessor company, Anzu, as part of its IPO
of units at a price of $10.00 per unit, with each unit consisting of one share of Anzu Class A Common Stock and one-third of one Public
Warrant; (ii) up to 3,874,394 shares of Class A Common Stock that are issuable upon the exercise of 3,874,394 Shortfall Warrants issued
to the Meteora FPA Parties for no additional consideration pursuant to the Forward Purchase Agreement; up to 2,173,913 shares of Class
A Common Stock issuable upon conversion of 2,500,000 shares of our Series A Convertible Preferred Stock, issued to the Sponsor concurrently
with the Closing in a private exchange offer for 2,500,000 shares of Anzu’s Class B Common Stock, originally issued in connection
with the IPO at a price of $0.002 per share; (iv) up to 869,565 shares of Class A Common Stock issuable upon conversion of an aggregate
of 1,000,000 shares of Series A Preferred Stock, which were issued to the PIPE Investors, each an affiliate of the Sponsor, in connection
with the Closing at a price of $10.00 per share and have a conversion price of $11.50 per share; and (v) up to 869,565 shares of
Class A Common Stock issuable upon conversion of 1,000,000 shares of Series A Preferred Stock, which were issued to GAT in connection
with the Closing in exchange for the Legacy Envoy Bridge Note at a price of $10.00 per share and have a conversion price of $11.50 per
share. We will receive the proceeds from any exercise of any Warrants, assuming the exercise in full of all of the Warrants for cash,
but not from the sale of the shares of Class A Common Stock issuable upon such exercise.
The Prospectus and prospectus supplement also
relate to the offer and sale from time to time by the Selling Securityholders named in the Prospectus of up to 3,874,394 Shortfall Warrants
and up to 21,206,360 shares of Class A Common Stock, consisting of (i) up to 3,874,394 shares of Class A Common Stock that are issuable
upon the exercise of 3,874,394 Shortfall Warrants issued to the Meteora FPA Parties for no additional consideration pursuant to the Forward
Purchase Agreement; (ii) up to 2,173,913 shares of Class A Common Stock issuable upon conversion of 2,500,000 shares of Series A Preferred
Stock, which were issued to the Sponsor concurrently with the Closing in a private exchange offer for 2,500,000 shares of Anzu Class B
Common Stock originally issued in connection with the IPO at a price of $0.002 per share and have a conversion price of $11.50 per share;
(iii) up to 869,565 shares of Class A Common Stock issuable upon conversion of an aggregate of 1,000,000 shares of Series A Preferred
Stock, which were issued to the PIPE Investors in connection with the Closing at a price of $10.00 per share and have a conversion price
of $11.50 per share; (iv) up to 869,565 shares of Class A Common Stock issuable upon conversion of 1,000,000 shares of Series A Preferred
Stock, which were issued to GAT in connection with the Closing in exchange for the Legacy Envoy Bridge Note at a price of $10.00 per share
and have a conversion price of $11.50 per share; (v) 2,000,000 shares of Class A Common Stock (1,000,000 of which remain unvested and
subject to forfeiture and will vest upon the approval from the United States Food and Drug Administration of the Acclaim CI or upon a
change of control of the Company) issued to the Sponsor concurrently with the Closing upon conversion of 2,000,000 shares of Anzu Class
B Common Stock originally issued in connection with the IPO at a price of $0.002 per share; (vi) an aggregate of 125,000 shares of Class
A Common Stock issued to Anzu’s former directors concurrently with the Closing upon conversion of 125,000 shares of Anzu Class B
Common Stock originally issued in connection with the IPO at a price of $0.002 per share; (vii) an aggregate of 490,000 shares of Class
A Common Stock issued to the Sponsor concurrently with the Closing upon conversion of 490,000 shares of Anzu Class B Common Stock and
subsequently transferred by the Sponsor to certain third parties for no additional consideration pursuant to (a) side letter agreements,
dated December 6, 2021, by and between the Sponsor and certain institutional investors and (b) extension support agreements, by and among
Anzu, the Sponsor and several unaffiliated third parties; (viii) an aggregate of 8,512 shares of Class A Common Stock issued to the Meteora
FPA Parties concurrently with the Closing for no additional consideration pursuant to the Forward Purchase Agreement; and (ix) an aggregate
of 10,795,411 shares of Class A Common Stock issued to the Key Seller Stockholders concurrently with the Closing, and as consideration
in the Business Combination, upon the conversion of an aggregate of 169,731,160 shares of Legacy Envoy Common Stock held by the Key Seller
Stockholders into shares of Class A Common Stock. We will not receive any proceeds from the sale of Shortfall Warrants or Class A Common
Stock by the Selling Securityholders pursuant to the Prospectus.
We registered the securities for resale pursuant
to the Selling Securityholders’ registration rights under certain agreements between us and the Selling Securityholders. Our registration
of the securities covered by the Prospectus does not mean that the Selling Securityholders will offer or sell any of their Shortfall Warrants
or Class A Common Stock. The Selling Securityholders may offer, sell or distribute all or a portion of their Shortfall Warrants and Class
A Common Stock publicly or through private transactions at prevailing market prices or at negotiated prices. We will not receive any proceeds
from the sale of Shortfall Warrants or Class A Common Stock by the Selling Securityholders pursuant to the Prospectus. We provide more
information about how the Selling Securityholders may sell their Shortfall Warrants and Class A Common Stock in the section entitled “Plan
of Distribution.”
This prospectus supplement incorporates into the
Prospectus the information contained in our attached current report on Form 8-K, which was filed with the Securities and Exchange Commission
on November 14, 2024.
You should read this prospectus supplement in
conjunction with the Prospectus, including any supplements and amendments thereto. This prospectus supplement is qualified by reference
to the Prospectus except to the extent that the information in the prospectus supplement supersedes the information contained in the Prospectus.
This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including
any supplements and amendments thereto.
Our Class A Common Stock and Public Warrants
are listed on The Nasdaq Capital Market under the symbols “COCH” and “COCHW,” respectively. On November 12,
2024, the closing price of our Class A Common Stock was $2.11 and the closing price for our Public Warrants was $0.09.
See the section entitled “Risk
Factors” beginning on page 10 of the Prospectus to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement of the
Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is November 14,
2024.
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):
November 14, 2024
ENVOY MEDICAL, INC.
(Exact name of registrant as specified in its
charter)
| Delaware |
|
001-40133 |
|
86-1369123 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
4875 White Bear Parkway
White Bear Lake, MN |
|
55110 |
| (Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: (877) 900-3277
Not Applicable
(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 Symbol(s) |
|
Name of each exchange on which
registered |
| Class A Common Stock, par value $0.0001 per share |
|
COCH |
|
The Nasdaq Stock Market LLC |
| Redeemable Warrants, each whole Warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share |
|
COCHW |
|
The Nasdaq Stock Market LLC |
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 November 14, 2024, Envoy Medical, Inc. (the “Company”),
issued a press release regarding the Company’s financial results for its third fiscal quarter ended September 30, 2024. A copy of
the Company’s press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02, including the accompanying exhibit,
is being furnished and 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. The information in this Item 2.02 shall not
be incorporated into any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation
language in such filing.
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.
| |
ENVOY MEDICAL, INC. |
| |
|
|
| November 14, 2024 |
By: |
/s/ David R. Wells |
| |
|
David R. Wells |
| |
|
Chief Financial Officer |
Exhibit 99.1
Envoy
Medical Reports Third Quarter 2024 Results and Other Exciting Events
FDA approval to begin pivotal trial of
fully implanted cochlear implant and AMA approval of CPT codes for the Company’s already FDA-approved fully implanted middle ear
implant are two of the exciting developments for the growing company
WHITE BEAR LAKE, Minn., Nov. 14, 2024 (GLOBE NEWSWIRE) -- Envoy
Medical®, Inc. (“Envoy Medical”) (Nasdaq: COCH), a revolutionary hearing health company focused on fully implanted hearing
devices, today announces its corporate and financial results for the third quarter ended September 30, 2024, as well as other subsequent events.
“The progress and accomplishments of
late have been extremely important to Envoy Medical as they have set the stage for us to demonstrate the value of fully implanted hearing
devices. First, we have received FDA’s approval to start our pivotal trial of the Acclaim® fully implanted cochlear implant
(“Acclaim CI”). Second, we continue to make tremendous progress on obtaining meaningful reimbursement for our already FDA-approved
Esteem® FI-AMEI. We continue to receive considerable support for the bipartisan bills that were introduced in both the House and the
Senate this year to change the way fully implanted active middle ear hearing devices classified by CMS. In addition, the American Medical
Association’s CPT Editorial Panel has approved Category III CPT codes for totally implantable active middle ear hearing devices
for the first time. A significant step forward for our Esteem® device. Ultimately, we continue to believe that our products are important
innovations for patients suffering from hearing loss and foresee a bright future for Envoy Medical,” commented Brent Lucas, Envoy
Medical’s Chief Executive Officer. “We look forward to updating shareholders on our progress as we initiate the trial for
the Acclaim® device and as we progress with our reimbursement strategy for the Esteem® device.”.”
Corporate Highlights from Q3 2024 and To Date
| ● | Received FDA Approval to initiate pivotal clinical study for Acclaim fully implantable cochlear implant to support eventual PMA submission |
| ● | AMA approved new CPT codes for totally implantable middle ear hearing implants, which provides significant opportunity for Esteem® FI-AMEI |
| ● | Considerable support voiced for the bi-partisan House and Senate bills to change classification for fully implanted middle ear hearing
devices to become coverable benefits for Medicare beneficiaries |
| ● | U.S. Patent issued for Recharge System with Implantable Battery |
| ● | European Patent Agency issued Patent for Modular Cochlear Implant System |
| ● | Company included in Russell Microcap Index |
Financial Results for the Quarter Ended September 30, 2024
Net revenues were $56 thousand for the quarter ended September 30,
2024, a decrease of $24 thousand from $80 thousand for the same period in 2023. Net revenues were $183 thousand for the nine months ended
September 30, 2024, a decrease of $38 thousand compared to the previous period. Both decreases were due mainly to a reduction in the number
of battery replacement requests for Esteem implants received during the noted periods, and also as a result of supply chain issues.
R&D expenses increased $907 thousand from $1.9 million to $2.8
million for the three months ended September 30, 2024, and the nine-month results showed an increase of $1.8 million from $5.9 million
to $7.7 million for September 30, 2024. Both increases were due to costs associated with additional headcount and contractors across our
clinical and engineering departments in preparation for the pivotal clinical study for the Acclaim CI.
Sales and marketing expenses decreased by $5 thousand for the three
months ended September 30, 2024 as compared to the same period for 2023, although for the nine months ended September 30, 2024 increased
by $63 thousand compared to the same period in 2023. For the year to date results, increases in legal and professional fees to secure
insurance reimbursement for the Esteem FI-AMEI product were offset by reductions in headcount.
General and administrative expenses increased by $665 thousand to $1.7
million for the three months ended September 30, 2024, and the year-to-date results showed a $1.2 million increase over the prior year.
The increases are due primarily to increased legal and professional fees normally associated with being a publicly traded company and
other administrative expenses.
As of September 30, 2024, cash and cash equivalents were approximately
$4.4 million.
About the Fully Implanted Acclaim®
Cochlear Implant
We believe the fully implanted Acclaim Cochlear
Implant (“Acclaim CI”) is a first-of-its-kind hearing device. Envoy Medical’s fully implanted technology includes a
sensor designed to leverage the natural anatomy of the ear instead of a microphone to capture sound.
The Acclaim CI is designed to address severe
to profound sensorineural hearing loss that is not adequately addressed by hearing aids. The Acclaim CI is expected to be indicated for
adults who have been deemed adequate candidates by a qualified physician.
The Acclaim Cochlear Implant received the
Breakthrough Device Designation from the U.S. Food and Drug Administration (FDA) in 2019.
CAUTION The fully implanted Acclaim Cochlear Implant is an investigational
device. Limited by Federal (or United States) law to investigational use.
About the Esteem® Fully Implanted Active
Middle Ear Implant (FI-AMEI)
The Esteem fully implanted active middle ear
implant (FI-AMEI) is the only FDA-approved, fully implanted* hearing device for adults diagnosed with moderate to severe sensorineural
hearing loss allowing for 24/7 hearing capability using the ear’s natural anatomy. The Esteem FI-AMEI hearing implant is invisible
and requires no externally worn components and nothing is placed in the ear canal for it to function. Unlike hearing aids, you never put
it on or take it off. You can’t lose it. You don’t clean it. The Esteem FI-AMEI hearing implant offers true 24/7 hearing.
| * | Once activated, the external Esteem FI-AMEI Personal Programmer
is not required for daily use. |
Important safety information for the Esteem
FI-AMEI can be found at: https://www.envoymedical.com/safety-information.
Additional Information and Where to Find
It
Copies of the documents filed by Envoy Medical
with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov.
Forward-Looking Statements
This press release includes “forward-looking
statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform
Act of 1995. Forward-Looking statements may be identified by the use of words such as “estimate,” “plan,” “project,”
“forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,”
“seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not
statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. Such statements
may include, but are not limited to, statements regarding the expectations of Envoy Medical concerning the outlook for its business, productivity,
plans and goals for future operational improvements and capital investments; the Acclaim CI being the first to market fully implanted
cochlear implant, the result of the clinical trial, the timing and results of clinical trials of the Acclaim CI, and the participation
of any institution in such trials; the safety, performance, and market acceptance of the Acclaim CI; and any information concerning possible
or assumed future operations of Envoy Medical. The forward-looking statements contained in this press release reflect Envoy Medical’s
current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances
that may cause its actual results to differ significantly from those expressed in any forward-looking statement. Envoy Medical does not
guarantee that the events described will happen as described (or that they will happen at all). These forward-looking statements are subject
to a number of risks and uncertainties, including, but not limited to changes in the market price of shares of Envoy Medical’s Class
A Common Stock; changes in or removal of Envoy Medical’s shares inclusion in any index;
Envoy Medical’s success in retaining or recruiting, or changes required in, its officers, key employees or directors; unpredictability
in the medical device industry, the regulatory process to approve medical devices, and the clinical development process of Envoy Medical
products; competition in the medical device industry, and the failure to introduce new products and services in a timely manner or at
competitive prices to compete successfully against competitors; disruptions in relationships with Envoy Medical’s suppliers, or
disruptions in Envoy Medical’s own production capabilities for some of the key components and materials of its products; changes
in the need for capital and the availability of financing and capital to fund these needs; changes in interest rates or rates of inflation;
legal, regulatory and other proceedings could be costly and time-consuming to defend; changes in applicable laws or regulations, or the
application thereof on Envoy Medical; a loss of any of Envoy Medical’s key intellectual property rights or failure to adequately
protect intellectual property rights; the effects of catastrophic events, including war, terrorism and other international conflicts;
and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward
Looking Statements” in the Annual Report on Form 10-K filed by Envoy Medical on April 1, 2024, and in other reports Envoy Medical
files, with the SEC. If any of these risks materialize or Envoy Medical’s assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking statements. While forward-looking statements reflect Envoy Medical’s
good faith beliefs, they are not guarantees of future performance. Envoy Medical disclaims any obligation to publicly update or revise
any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events
or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any
forward-looking statements, which are based only on information currently available to Envoy Medical.
###
Investor Contact:
David R. Wells
Chief Financial Officer
(651) 361-8013
drwells@envoymedical.com
CORE IR
(516) 222-2560
investorrelations@envoymedical.com
ENVOY
MEDICAL, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In
thousands, except share and per share amounts)
| | |
September 30,
2024 | | |
December 31,
2023 | |
| Assets | |
| | |
| |
| Current assets: | |
| | |
| |
| Cash | |
$ | 4,424 | | |
$ | 4,218 | |
| Accounts
receivable, net | |
| 197 | | |
| 70 | |
| Other
receivable | |
| 32 | | |
| 176 | |
| Inventories | |
| 1,641 | | |
| 1,404 | |
| Prepaid
expenses and other current assets | |
| 842 | | |
| 957 | |
| Total
current assets | |
| 7,136 | | |
| 6,825 | |
| Property
and equipment, net | |
| 1,197 | | |
| 351 | |
| Operating
lease right-of-use asset (related party) | |
| 1,064 | | |
| 464 | |
| Total
assets | |
$ | 9,397 | | |
$ | 7,640 | |
| Liabilities
and stockholders’ deficit | |
| | | |
| | |
| Current
liabilities: | |
| | | |
| | |
| Accounts
payable | |
$ | 1,757 | | |
$ | 1,554 | |
| Accrued
expenses | |
| 6,854 | | |
| 4,613 | |
| Product
warranty liability, current portion | |
| 238 | | |
| 311 | |
| Operating
lease liability, current portion (related party) | |
| 225 | | |
| 158 | |
| Total
current liabilities | |
| 9,074 | | |
| 6,636 | |
| Term
loan payable and accrued interest (related party) | |
| 14,356 | | |
| — | |
| Product
warranty liability, net of current portion | |
| 1,923 | | |
| 1,923 | |
| Operating
lease liability, net of current portion (related party) | |
| 1,028 | | |
| 404 | |
| Publicly
traded warrant liability | |
| 1,134 | | |
| 332 | |
| Forward
purchase agreement put option liability | |
| — | | |
| 103 | |
| Forward
purchase agreement warrant liability | |
| 411 | | |
| 4 | |
| Total
liabilities | |
| 27,926 | | |
| 9,402 | |
| | |
| | | |
| | |
| Commitments
and contingencies (see Note 14) | |
| | | |
| | |
| | |
| | | |
| | |
| Stockholders’
deficit: | |
| | | |
| | |
| Series A Preferred
Stock, $0.0001 par value; 100,000,000 shares authorized and 10,000,000 shares designated as of September 30, 2024 and December 31,
2023; 4,500,000 shares issued and outstanding as of September 30, 2024 and December 31, 2023 | |
| — | | |
| — | |
| Class A Common Stock,
$0.0001 par value; 400,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 19,730,982 and 19,599,982 shares
issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | |
| 2 | | |
| 2 | |
| Additional
paid-in capital | |
| 259,119 | | |
| 255,596 | |
| Accumulated
deficit | |
| (277,529 | ) | |
| (257,242 | ) |
| Accumulated
other comprehensive loss | |
| (121 | ) | |
| (118 | ) |
| Total
stockholders’ deficit | |
| (18,529 | ) | |
| (1,762 | ) |
| Total
liabilities and stockholders’ deficit | |
$ | 9,397 | | |
$ | 7,640 | |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
ENVOY
MEDICAL, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(UNAUDITED)
(In
thousands, except share and per share amounts)
| | |
Three
Months Ended
September 30, | | |
Nine
Months Ended
September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Net
revenues | |
$ | 56 | | |
$ | 80 | | |
$ | 183 | | |
$ | 221 | |
| Costs
and operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Cost
of goods sold | |
| 187 | | |
| 189 | | |
| 585 | | |
| 555 | |
| Research
and development | |
| 2,757 | | |
| 1,850 | | |
| 7,708 | | |
| 5,901 | |
| Sales
and marketing | |
| 394 | | |
| 399 | | |
| 1,216 | | |
| 1,153 | |
| General
and administrative | |
| 1,692 | | |
| 1,027 | | |
| 5,406 | | |
| 4,248 | |
| Total
costs and operating expenses | |
| 5,030 | | |
| 3,465 | | |
| 14,915 | | |
| 11,857 | |
| Operating
loss | |
| (4,974 | ) | |
| (3,385 | ) | |
| (14,732 | ) | |
| (11,636 | ) |
| Other
(expense) income: | |
| | | |
| | | |
| | | |
| | |
| Gain
(loss) from changes in fair value of convertible notes payable (related party) | |
| — | | |
| 4,902 | | |
| — | | |
| (13,332 | ) |
| Change
in fair value of forward purchase agreement put option liability | |
| — | | |
| — | | |
| 103 | | |
| — | |
| Change
in fair value of forward purchase agreement warrant liability | |
| (311 | ) | |
| — | | |
| (329 | ) | |
| — | |
| Change
in fair value of publicly traded warrant liability | |
| (426 | ) | |
| — | | |
| (802 | ) | |
| — | |
| Interest
expense, related party | |
| (264 | ) | |
| — | | |
| (432 | ) | |
| — | |
| Other
income (expense) | |
| 15 | | |
| 46 | | |
| 15 | | |
| (59 | ) |
| Total
other (expense) income, net | |
| (986 | ) | |
| 4,948 | | |
| (1,445 | ) | |
| (13,391 | ) |
| Net
(loss) income | |
$ | (5,960 | ) | |
$ | 1,563 | | |
$ | (16,177 | ) | |
$ | (25,027 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Cumulative
preferred dividends and undistributed earnings allocated to participating securities, basic | |
$ | (1,380 | ) | |
| (203 | ) | |
| (4,110 | ) | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Net
(loss) income attributable to common stockholders, basic | |
$ | (7,340 | ) | |
$ | 1,360 | | |
$ | (20,287 | ) | |
$ | (25,027 | ) |
| Net
(loss) income attributable to common stockholders, diluted | |
$ | (7,340 | ) | |
$ | 1,404 | | |
$ | (20,287 | ) | |
$ | (25,027 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net
(loss) income per share attributable to common stockholders, basic | |
$ | (0.37 | ) | |
$ | 0.13 | | |
$ | (1.03 | ) | |
$ | (2.46 | ) |
| Net
(loss) income per share attributable to common stockholders, diluted | |
$ | (0.37 | ) | |
$ | 0.13 | | |
$ | (1.03 | ) | |
$ | (2.46 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted-average
common stock outstanding, basic | |
| 19,616,362 | | |
| 10,214,183 | | |
| 19,605,482 | | |
| 10,153,564 | |
| Weighted-average
common stock outstanding, diluted | |
| 19,616,362 | | |
| 11,215,068 | | |
| 19,605,482 | | |
| 10,153,564 | |
| | |
| | | |
| | | |
| | | |
| | |
| Other
comprehensive (loss) income: | |
| | | |
| | | |
| | | |
| | |
| Foreign
currency translation adjustment | |
| (1 | ) | |
| (1 | ) | |
| (3 | ) | |
| (1 | ) |
| Other
comprehensive loss | |
| (1 | ) | |
| (1 | ) | |
| (3 | ) | |
| (1 | ) |
| Comprehensive
(loss) income | |
$ | (5,961 | ) | |
$ | 1,562 | | |
$ | (16,180 | ) | |
$ | (25,028 | ) |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
ENVOY
MEDICAL, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In
thousands)
| | |
Nine
Months Ended
September 30, | |
| | |
2024 | | |
2023 | |
| Cash flows from operating activities | |
| | |
| |
| Net loss | |
$ | (16,177 | ) | |
$ | (25,027 | ) |
| Adjustments to reconcile
net loss to net cash used in operating activities: | |
| | | |
| | |
| Depreciation | |
| 125 | | |
| 85 | |
| Accrued interest and
amortization of debt discount on term loan payable (related party) | |
| 432 | | |
| — | |
| Stock-based compensation | |
| 409 | | |
| — | |
| Change in fair value
of convertible notes payable (related party) | |
| — | | |
| 13,332 | |
| Change in fair value
of warrant liability (related party) | |
| — | | |
| 104 | |
| Change in fair value of publicly traded warrant liability | |
| 802 | | |
| — | |
| Change in fair value
of forward purchase agreement warrant liability | |
| 329 | | |
| — | |
| Change in fair value
of forward purchase agreement put option liability | |
| (103 | ) | |
| — | |
| Gain on exercise and
cancellation warrant liability (related party) | |
| — | | |
| (231 | ) |
| Change in operating lease
right-of-use asset (related party) | |
| 250 | | |
| 83 | |
| Changes in operating
assets and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (127 | ) | |
| (68 | ) |
| Other receivable | |
| 144 | | |
| — | |
| Inventories | |
| (237 | ) | |
| (102 | ) |
| Prepaid expenses and
other current assets | |
| 657 | | |
| (868 | ) |
| Accounts payable | |
| 203 | | |
| 2,378 | |
| Operating lease liability
(related party) | |
| (159 | ) | |
| (101 | ) |
| Accrued expenses | |
| (36 | ) | |
| 694 | |
| Product warranty liability | |
| (73 | ) | |
| (225 | ) |
| Payable
to related party | |
| — | | |
| 4,000 | |
| Net
cash used in operating activities | |
$ | (13,561 | ) | |
$ | (5,946 | ) |
| | |
| | | |
| | |
| Cash flows from investing
activities | |
| | | |
| | |
| Purchases
of property and equipment | |
| (1,514 | ) | |
| (132 | ) |
| Net
cash used in investing activities | |
$ | (1,514 | ) | |
$ | (132 | ) |
| | |
| | | |
| | |
| Cash flows from financing
activities | |
| | | |
| | |
| Proceeds from the issuance
of convertible notes payable (related party) | |
| — | | |
| 10,000 | |
| Proceeds from the PIPE
Transaction, the Forward Purchase Agreement, and the Business Combination, net of transaction costs | |
| — | | |
| 11,736 | |
| Proceeds from the additional
Series A Preferred Shares subscription | |
| — | | |
| 1,000 | |
| Proceeds from the issuance
of term loan (related party) | |
| 15,000 | | |
| — | |
| Dividends paid to Series
A Preferred Shareholders | |
| (1,833 | ) | |
| — | |
| Proceeds from exercise of warrants | |
| 434 | | |
| — | |
| Proceeds
from the sale of common stock associated with forward purchase agreement, net of transaction costs | |
| 1,683 | | |
| — | |
| Net
cash provided by financing activities | |
$ | 15,284 | | |
$ | 22,736 | |
| | |
| | | |
| | |
| Effect
of exchange rate changes on cash | |
| (3 | ) | |
| (1 | ) |
| Net increase in cash | |
| 206 | | |
| 16,657 | |
| Cash, beginning
of period | |
| 4,218 | | |
| 183 | |
| Cash, end of period | |
$ | 4,424 | | |
$ | 16,840 | |
| | |
| | | |
| | |
| Supplemental disclosures
of cash flow information: | |
| | | |
| | |
| Cash
paid for interest | |
$ | — | | |
$ | — | |
| Cash
paid for income taxes | |
$ | — | | |
$ | — | |
| | |
| | | |
| | |
| Non-cash investing and financing
activities: | |
| | | |
| | |
| Deemed
capital contribution from related party | |
$ | — | | |
$ | 18,702 | |
| SPAC
excise tax liability recognized upon the Business Combination | |
$ | — | | |
$ | 2,248 | |
| Accrued
and unpaid dividends on Series A Preferred Shares | |
$ | 2,277 | | |
$ | 30 | |
| Warrants
issued with 2024 Term Loans | |
$ | 1,075 | | |
$ | — | |
| Extinguishment
of excess warrant liability upon exercise of warrants associated with the forward purchase agreement | |
$ | 16 | | |
$ | — | |
| Modification
of forward purchase agreement warrant liability | |
$ | 94 | | |
$ | — | |
| Lease
liabilities arising from obtaining right-of-use assets | |
$ | 850 | | |
$ | — | |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
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