Roth Capital Partners, LLC serves as the sole sales agent for the offering. Under the ATM agreement, Envoy Medical will pay Roth Capital Partners a fixed commission of up to 3.0% of the gross sales price per share sold through the facility. Roth Capital Partners is not required to sell any specific number or dollar amount of shares and will act only on a commercially reasonable efforts basis consistent with its normal trading and sales practices; there is no minimum offering amount required to close. The prospectus supplement also discloses that Envoy Medical agreed to reimburse Roth Capital Partners for its legal counsel fees up to $50,000, plus $5,000 per due diligence update session. In connection with sales under the agreement, Roth Capital Partners will be deemed an "underwriter" within the meaning of the Securities Act.
Shares will be sold from time to time at prevailing market prices on Nasdaq rather than at a fixed price negotiated in advance, consistent with the at-the-market structure. As of January 16, 2025, Envoy Medical had 21,293,861 shares of Class A Common Stock outstanding, of which approximately 10,702,127 shares were held by non-affiliates. For illustrative purposes only, the prospectus supplement modeled a scenario in which all $15.0 million of shares were sold at $1.50 per share, the last reported Nasdaq closing price on January 16, 2025 (the trading day before the ATM agreement was signed), which would imply roughly 10,000,000 new shares issued, net proceeds of approximately $14.4 million after commissions and estimated offering expenses, and an increase in total shares outstanding to approximately 31,293,861. Because there is no minimum offering amount, the actual number of shares sold, the price at which they are sold, and the resulting gross and net proceeds are not determinable in advance and will depend on market conditions over the life of the ATM program.
The prospectus supplement discloses that purchasers in the illustrative $1.50 per share scenario would experience immediate dilution of $1.62 per share, representing the difference between the assumed offering price and Envoy Medical's as-adjusted net tangible book value (deficit) per share as of September 30, 2024 after giving effect to the offering, which the filing states was approximately $(3,499) thousand, or $(0.12) per share, on that pro forma basis. No concurrent share repurchase or buyback was disclosed alongside the offering.
Envoy Medical intends to use the net proceeds from the offering for general corporate purposes, which may include working capital, capital expenditures, research and development expenditures, clinical trial expenditures, expansion of business development activities, and other general corporate purposes; the filing also notes proceeds may be used to acquire or invest in complementary products, technologies, or businesses, though no specific acquisition or debt repayment use was identified. No greenshoe or over-allotment option applies to this ATM structure, which is standard for at-the-market programs since shares are issued directly into the market over time rather than in a single underwritten tranche.
Fredrikson & Byron, P.A. of Minneapolis, Minnesota serves as legal counsel to Envoy Medical and passed upon the validity of the shares offered. Ellenoff Grossman & Schole LLP of New York, New York represents Roth Capital Partners as the sales agent's legal counsel in connection with the offering.
Because the ATM program allows sales over an open-ended period at then-prevailing prices, the prospectus supplement does not provide a specific closing date, a fixed number of shares to be sold, or the ultimate aggregate proceeds that will be raised; these depend on the pace and pricing of sales Envoy Medical and Roth Capital Partners choose to execute under the agreement over its term. No subsequent SEC filing confirming the amount actually sold or the program's completion was identified in this review.