Eargo Announces Record Date for Proposed Rights Offering

  • Record date set at October 24, 2022
  • To be a registered shareholder, investors are advised to hold EAR shares by 4:00 p.m. EST on Thursday, October 20, 2022 to account for the settlement delay T (trade) +2

SAN JOSE, Calif., Oct. 13, 2022 (GLOBE NEWSWIRE) — Eargo, Inc. (“Eargo” or the “Company”) (NASDAQ: EAR), a medical device company whose mission is to improve the quality of life for the hearing impaired, today announced that the record date for its proposed rights offering is October 24, 2022 at 5:00 p.m. Eastern Time (the “Record Date”). Potential shareholders who wish to participate in the rights offering are urged to ensure that they complete their purchases of EAR common stock on the open market by October 20, 2022 to be considered a registered shareholder at the date of recording.

As previously announced, the Company intends to raise up to $187.5 million in gross proceeds through a rights offering where its existing shareholders as of the record date will be granted the right to purchase common shares of the Company (the “Rights Offering”).

The Company has filed a registration statement (File No. 333-267071) (the “Registration Statement”) regarding the proposed rights offering with the Securities and Exchange Commission (the “SEC”) on August 25, 2022 .

By way of background, on June 24, 2022, the Company entered into the note purchase agreement (the “Ticket Purchase Agreement”) with an affiliate of Patient Square Capital which was considering the rights offering. On June 28, 2022, pursuant to the note purchase agreement, the Company entered into an initial issuance of $100 million of senior secured convertible notes. Under the Note Purchase Agreement, the Company was required to obtain certain approvals from its shareholders to permit the completion of the Rights Offering, which approvals were obtained at the 2022 annual meeting of shareholders of the company held on October 12, 2022, and must complete the proposed Rights Offering by December 24, 2022. The Company intends to complete the Rights Offering by November 25, 2022, as the completion of the offer on that date provides more favorable terms for the Company and its shareholders under the Note Purchase Agreement.

As part of the rights offering, the Company will distribute to holders of common stock of Eargo non-transferable rights to purchase up to an aggregate of 375,000,000 shares at a subscription price of 0 $.50 per share. Each Right consists of a Base Subscription Privilege and an Oversubscription Privilege. The rights under the basic subscription privilege will be distributed in proportion to the shareholders’ holdings on the date of record. If a shareholder exercises his basic subscription right in full, and other shareholders do not, such shareholder will be entitled to an over-subscription privilege to purchase a portion of the unsubscribed shares at the subscription price, subject to a pro rata and certain limitations.

The Company expects to use a significant portion of the proceeds of the proposed rights offering to redeem the outstanding notes issued to Patient Square Capital for a premium. All unredeemed notes will be converted into unsubscribed common stock under the Rights Offering. The amount of common stock that Patient Square Capital will receive upon conversion of its Notes will depend on the timing and level of participation of the Company’s shareholders in the rights offering.

Further details of the terms of the Rights Offering and the procedures by which eligible shareholders can exercise their rights, including any changes to the dates included in this press release, will be announced prior to the commencement of the Rights Offering. .

No rights offering will be made until the Company announces the final terms of the rights offering and the registration statement incorporating such terms has been declared effective by the SEC.

About Eargo
Eargo is a medical device company with a mission to improve hearing health. Our innovative products and approach to market address key challenges to traditional hearing aid adoption, including social stigma, accessibility and cost. We believe our Eargo hearing aids are the first virtually invisible, rechargeable, fully in-canal, FDA regulated, Class I or Class II exempt devices indicated to compensate for mild to moderate hearing loss. Our differentiated, consumer-centric approach empowers consumers to take control of their hearing. Consumers can shop online or over the phone and get personalized, hands-on consultation and support from hearing care professionals via phone, text, email or video chat. Eargo hearing aids are offered to consumers at approximately half the price of competing hearing aids purchased through traditional channels in the United States.

Eargo’s sixth-generation device, Eargo 6, is an FDA Class II exempt hearing aid featuring Sound Adjust technology that automatically optimizes the soundscape as the user moves between environments. Eargo 6 is available for purchase here.

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Contact Investor
Nick Laudico
Senior Vice President of Corporate Strategy and Investor Relations
[email protected]

Caution Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release are forward-looking statements, including statements regarding the investment by Patient Square Capital, including the conversion of the notes, the terms of the anticipated rights offering , including the timing of the anticipated rights offering, or whether it will take place, and shareholder participation in the Rights Offering. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that could cause actual results and events to differ materially from those anticipated, including, but not limited to, the risks and uncertainties relating to the conversion of the Notes. issued as part of Patient Square Capital’s investment; the timing of the planned Rights Offering, or whether it will take place, and the participation of shareholders in the Rights Offering. These and other risks are described in more detail in the section entitled “Risk Factors” contained in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed with the SEC. All forward-looking statements in this press release are made pursuant to the Private Securities Litigation Reform Act of 1995, as amended, are based on current expectations, forecasts and assumptions and speak only as of the date of this release. Press. Except as required by law, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional information and where to find it

The Company has filed the registration statement (including a prospectus) with the SEC for the offering to which this press release relates. Before investing, you should read the prospectus of this registration statement and other documents the Company has filed with the SEC for more complete information about the Company and this offering. You can obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, you may obtain copies of the prospectus by contacting Morrow Sodali, the Information Agent for the Offer, at:

Morrow Sodali LLC
333 Ludlow Street
5th floor, south tower
Stamford, Connecticut 06902
Individuals call toll free: (800) 662-5200
Banks and brokerage firms, please call (203) 658-9400
Email: [email protected]

No offer or solicitation

This press release does not constitute an offer or a solicitation to offer, sell or buy any securities, and no securities of the Company will be offered or sold in any jurisdiction in which such offer, solicitation or sale would be illegal. . This is an overview of discussion topics only. Neither the SEC nor any state securities commission has approved or disapproved of the transactions contemplated herein or determined whether this document is true or complete. Any representation to the contrary is a criminal offence. In connection with the rights offering transaction described herein, the registration statement was filed with the SEC on August 25, 2022. Shareholders of the Company are urged to read the registration statement and the documents that are incorporated by reference before making any investment decision regarding the Rights Offering as they will contain important information regarding the proposed Rights Offering transaction. You should not construe the contents of this press release as legal, tax, accounting or investment advice or a recommendation. You should consult your own attorney and tax and financial advisors on legal and related matters regarding the matters described herein.

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