By Chris Wack


Eargo Inc. shares were down 14% to $1.08 Monday after the medical device company said it has signed a definitive agreement with Patient Square Capital to raise $100 million through the sale of senior secured convertible notes, with an additional $25 million future investment subject to certain conditions.

The company said it intends to use the proceeds of Patient Square's investment for working capital purposes, to fund its omni-channel growth strategy and to repay all of its $15 million in existing third-party debt as well as related pay-off expenses.

Under the agreement, Eargo said it will issue $100 million aggregate principal amount of senior secured convertible notes to Patient Square upon closing.

Patient Square has also agreed to buy up to an additional $25 million of senior secured convertible notes if the rights offering hasn't been completed within 150 days, Eargo said.

Any proceeds from the rights offering will be used to redeem the senior secured convertible notes and for general corporate purposes. In the event the rights offering is not fully subscribed, the remaining senior secured convertible notes not redeemed in the rights offering will convert into 375 million common shares less the number of shares subscribed for in the rights offering, Eargo said.


Write to Chris Wack at


(END) Dow Jones Newswires

June 27, 2022 10:35 ET (14:35 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.
Historical Stock Chart
From Jul 2022 to Aug 2022 Click Here for more Eargo Charts.
Historical Stock Chart
From Aug 2021 to Aug 2022 Click Here for more Eargo Charts.