Free Writing Prospectus
Dated October 31, 2022
Filed Pursuant to Rule 433
Registration No. 333-267071
On October 31, 2022, Eargo, Inc. (“Eargo” or the “Company”) first began using the following letter to stockholders as part of its mailing to stockholders in connection with the
Company’s rights offering (the “Rights Offering”). Certain information linked within this communication has been included in this filing below. The text of the letter can be viewed below:
We were so pleased to announce that Proposals No. 5 and No. 6, which related to our proposed rights offering, were recently approved by stockholders at our 2022 Annual Meeting of Stockholders. We are
now able to go forward with our proposed rights offering. Stockholders of record as of the close of business on October 24, 2022 (the “record date”) are receiving this letter and certain other materials, which provide information on how you can
exercise your rights to purchase 9.5151 additional shares of common stock for $0.50 per share for each right that you receive. We also recently launched a website for stockholders with further information regarding the rights offering, which you can
visit at https://ir.eargo.com/rights-offering-information.
The rights offering gives stockholders the opportunity to purchase their pro rata portion of 375 million newly issued shares at a subscription price of $0.50 per share. Stockholders will receive one
right for every share that they owned as of the record date. Each right entitles a stockholder to purchase 9.5151 shares. For example, a stockholder holding 1,000 shares as of the record date would receive rights entitling them to purchase 9,515
shares, at a price of $0.50 per share, in the rights offering.
We expect to use a substantial portion of the proceeds from the rights offering to repay the outstanding convertible notes issued to Patient Square Capital at a premium. Any convertible notes not
repaid will convert into the shares of common stock not subscribed for in the rights offering. Therefore, depending on the level of participation in the rights offering, Patient Square Capital may own a substantial portion of our common stock
following the rights offering (and up to 90.5% if none of our stockholders purchase shares in the rights offering). Participating in the rights offering will allow stockholders to maintain their percentage ownership in the company – or, in other
words, reduce the level of dilution that they could incur from the conversion of Patient Square Capital’s convertible notes.
Following the completion of the rights offering, the company will have no debt to Patient Square.
We expect that the rights offering will raise between $22.5 million and $35 million in additional capital for the company, after taking into account applicable offering expenses and repayment of the
convertible notes. The net proceeds received by the company from the rights offering will depend on both the level of stockholder participation and the timing of the rights offering.
We intend to close the rights offering on or before November 25, 2022. The expiration date for participation in the rights offering is November 17, 2022 for U.S. holders and November
10, 2022 for non-U.S. holders. Please review the enclosed prospectus and the other rights offering materials for information regarding delivery of payment, documentation required and important deadlines to participate in the rights offering.
In connection with the rights offering, the company filed a registration statement on Form S-1 (File No. 333-267071) on August 25, 2022, which includes the enclosed prospectus, and an amended
registration statement on October 25, 2022 (as amended, the “Registration Statement”). Stockholders are urged to read the Registration Statement and the documents incorporated by reference therein before making any investment decision because it
contains important information regarding the company and the rights offering transaction.
President and Chief Executive Officer
On October 31, 2022, Eargo issued a press release announcing the launch of the Rights Offering. Certain information linked within this communication has been included in this filing below. The contents of the press release can be found below:
EARGO ANNOUNCES COMMENCEMENT OF RIGHTS OFFERING
SAN JOSE, Calif., Oct. 31, 2022 (GLOBE NEWSWIRE) – Eargo, Inc. (“Eargo” or the “Company”) (NASDAQ: EAR), a medical device company on a mission to improve the
quality of life for people with hearing loss, today announced that it has commenced a rights offering for up to 375 million newly issued shares of its common stock (the “Rights Offering”) and that it has launched its rights offering website.
Stockholders of record at the close of business on October 24, 2022 will be receiving a final prospectus and related documents for use in exercising the subscription rights and may visit Eargo’s rights offering website for more information here.
In the Rights Offering, the Company will distribute to holders of Eargo’s common stock non-transferable rights to purchase up to an aggregate of 375,000,000 shares. Each
right consists of a basic subscription privilege to purchase 9.5151 shares of common stock at a subscription price of $0.50 per whole share and an oversubscription privilege. The rights under the basic subscription privilege will be distributed in
proportion to stockholders’ holdings on the Record Date. If a stockholder exercises his or her basic subscription right in full, and other stockholders do not, such stockholder will be entitled to an oversubscription privilege to purchase a portion
of the unsubscribed shares at the subscription price, subject to proration and certain limitations.
The Company expects to use a substantial portion of the proceeds from the proposed Rights Offering to repay the outstanding convertible notes issued to Patient Square
Capital at a premium. The Company expects that the Rights Offering will raise between $22.5 million and $35.0 million in additional capital, after taking into account offering expenses and repayment of the convertible notes. Any notes not repaid
will convert into the shares of common stock not subscribed for in 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 stockholders in the Rights Offering.
The Company intends to close the Rights Offering on or before November 25, 2022. The rights will expire if they are not exercised by 5:00 p.m., New York City time, on
November 17, 2022 for U.S. holders and 11:00 a.m., New York City time, on November 10, 2022 for non-U.S. Holders, subject to the Company’s decision to extend the period for exercising the rights.
The Rights Offering will be made only by means of a prospectus, which was filed with the Securities and Exchange Commission (the “SEC”) on October 28, 2022. This press
release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful.
Any offer will be made only by means of a prospectus.
Eargo is a medical device company on a mission to improve hearing health. Our innovative products and go-to-market approach address the major challenges of traditional
hearing aid adoption, including social stigma, accessibility and cost. We believe our Eargo hearing aids are the first virtually invisible, rechargeable, completely-in-canal, FDA-regulated, Class I or Class II exempt devices indicated to compensate
for mild to moderate hearing loss. Our differentiated, consumer-first approach empowers consumers to take control of their hearing. Consumers can purchase online or over the phone and get personalized and convenient consultation and support from
hearing professionals via phone, text, email or video chat. Eargo hearing aids are offered to consumers at approximately half the cost 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 device featuring Sound Adjust technology that automatically optimizes the soundscape as the user
moves between environments. Eargo 6 is available for purchase here.
Senior Vice President of Corporate Strategy and Investor Relations
On October 31, 2022, Eargo launched a website in connection with the Rights Offering. A copy of the materials can be found below:
Cautionary Statement Regarding Forward-Looking Statements
This communication 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 fact contained in this communication 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 if it will occur at all, and stockholder 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, risks and uncertainties related to the conversion of the
notes issued pursuant to the Patient Square Capital investment; the timing of the anticipated rights offering, or if it will occur at all, and stockholder participation in the rights offering. These and other risks are described in greater detail
under the section titled “Risk Factors” contained in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (the “SEC”). Any forward-looking statements in this
communication 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 communication. 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 communication relates. Before you invest, you should read the prospectus
in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov.
Alternatively, you may obtain copies of the prospectus, by contacting Morrow Sodali, the information agent for the offering, 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
This communication shall not constitute an offer, nor a solicitation of an offer, of the sale or purchase of securities, nor shall any securities of the Company be offered or sold in any
jurisdiction in which such an offer, solicitation or sale would be unlawful. It is an outline of matters for discussion only. Neither the SEC nor any state securities commission has approved or disapproved of the transactions contemplated hereby
or determined if this document is truthful or complete. Any representation to the contrary is a criminal offense. In connection with the rights offering transaction discussed herein, the Registration Statement was filed with the SEC on August 25,
2022 and amended on October 25, 2022. Stockholders of the Company are urged to read the Registration Statement and the documents incorporated by reference therein before making any investment decision with respect to the rights offering because
they will contain important information regarding the proposed rights offering transaction. You should not construe the contents of this communication as legal, tax, accounting or investment advice or a recommendation. You should consult your own
counsel and tax and financial advisors as to legal and related matters concerning the matters described herein.