UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share |
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Item 1.01: Entry Into a Material Definitive Agreement
Envoy Medical, Inc. (the “Company”) has issued a promissory note, effective as of February 27, 2024 (the “Note”) with a principal amount of up to $10,000,000 to GAT Funding, LLC (“GAT”), an entity controlled by Glen Taylor, who is a member of the Company’s board of directors and controlling stockholder of the Company. Upon meeting certain conditions, the Company may draw funds in $2,500,000 tranches under the Note up to $10,000,000 until the second anniversary of the Note. The Note has a five year term and matures on February 27, 2029. The principal amount drawn bears interest at a rate of 8.0% per annum and is paid quarterly in arrears after the second anniversary of the Note. Interest will accrue and not be paid for the first two years of the term, and will compound and be added to the principal balance of the Note on the first and second anniversary of the Note. The Company may prepay the accrued interest and principal of the Note without penalty, with 10 day’s notice. At closing the Company requested and GAT agreed to fund an initial $5,000,000 in principal under the Note.
As a commitment fee, the Company will issue GAT warrants to purchase 250,000 shares of its Class A Common Stock for each $2,500,000 of principal funded under the Note. The warrants will have an exercise price equal to the closing price on the date of funding of the applicable tranche and a termination date as of the third anniversary of the initial closing for all warrants. At closing of the initial funding, the Company issued GAT warrants to purchase 500,000 shares of Class A Common Stock at an exercise price of $1.24 per share (the “Warrants”), the closing price on February 27, 2024.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the Note is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the Warrants is incorporated by reference into this Item 3.02. The issuance of shares of the Company’s Class A Common Stock underlying the Warrants will be made in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D thereunder.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number |
Description | |
| 99.1 | Press Release dated March 4, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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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. | ||
| March 4, 2024 | By: | /s/ David R. Wells |
| David R. Wells | ||
| Chief Financial Officer | ||
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