|
|
|||
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification Number)
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading
Symbol(s) |
Name of each exchange
on which registered
|
||
|
|
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Item 7.01
|
Regulation FD Disclosure.
|
Item 9.01
|
Financial Statements and Exhibits.
|
Exhibit No.
|
Description
|
|
Eargo, Inc. Press Release, dated November 3, 2022.
|
||
Eargo, Inc. Press Release, dated November 3, 2022.
|
||
104
|
Cover Page Interactive File, formatted in Inline XBRL.
|
EARGO, INC.
|
||
Date: November 3, 2022
|
By:
|
/s/ Adam Laponis
|
Adam Laponis
|
||
Chief Financial Officer
|
• |
Net revenues of $7.9 million, compared to ($22.9) million in the prior year period
|
• |
Gross systems shipped of 5,156, compared to 13,117 in the prior year period
|
• |
Return accrual rate of 32.3%, compared to 46.4% in the prior year period
|
• |
GAAP gross margin of 24.0%; non-GAAP gross margin of 24.5%
|
• |
GAAP sales and marketing expense as a percent of net revenues of 142.7%; non-GAAP sales and marketing expense as a percent of net revenues of 134.5%
|
• |
Cash and cash equivalents of $88.1 million as of September 30, 2022
|
• |
Quarterly cash burn of approximately $19.0 million
|
• |
As of late October 2022, Eargo available for purchase in approximately 1,500 Victra Wireless stores nationwide through a partnership between the companies.
|
September 30,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
88,075
|
$
|
110,500
|
||||
Accounts receivable, net
|
1,156
|
12,547
|
||||||
Inventories
|
4,953
|
5,712
|
||||||
Prepaid expenses and other current assets
|
5,058
|
10,873
|
||||||
Total current assets
|
99,242
|
139,632
|
||||||
Operating lease right-of-use assets
|
6,337
|
7,165
|
||||||
Property and equipment, net
|
8,691
|
9,551
|
||||||
Intangible assets, net
|
1,217
|
1,681
|
||||||
Goodwill
|
873
|
873
|
||||||
Other assets
|
210
|
1,209
|
||||||
Total assets
|
$
|
116,570
|
$
|
160,111
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
6,396
|
$
|
9,053
|
||||
Accrued expenses
|
10,966
|
9,235
|
||||||
Sales returns reserve
|
1,790
|
13,827
|
||||||
Settlement liability
|
—
|
34,372
|
||||||
Convertible notes
|
125,000
|
—
|
||||||
Long-term debt, current portion
|
—
|
3,333
|
||||||
Other current liabilities
|
1,902
|
1,813
|
||||||
Lease liability, current portion
|
665
|
750
|
||||||
Total current liabilities
|
146,719
|
72,383
|
||||||
Lease liability, noncurrent portion
|
6,175
|
6,640
|
||||||
Long-term debt, noncurrent portion
|
—
|
11,924
|
||||||
Total liabilities
|
152,894
|
90,947
|
||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized as of September 30, 2022 and December 31,
2021, respectively; zero shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
|
—
|
—
|
||||||
Common stock; $0.0001 par value; 300,000,000 and 110,000,000 shares authorized as of September 30, 2022 and December
31, 2021, respectively; 39,411,069 and 39,307,093 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
|
4
|
4
|
||||||
Additional paid-in capital
|
434,200
|
425,972
|
||||||
Accumulated deficit
|
(470,528
|
)
|
(356,812
|
)
|
||||
Total stockholders’ equity
|
(36,324
|
)
|
69,164
|
|||||
Total liabilities and stockholders’ equity
|
$
|
116,570
|
$
|
160,111
|
Three months ended
September 30, |
Nine months ended
September 30, |
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Revenue, net
|
$
|
7,908
|
$
|
(22,869
|
)
|
$
|
24,331
|
$
|
22,062
|
|||||||
Cost of revenue
|
6,007
|
7,552
|
16,231
|
20,311
|
||||||||||||
Gross profit (loss)
|
1,901
|
(30,421
|
)
|
8,100
|
1,751
|
|||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
4,963
|
7,296
|
14,689
|
17,222
|
||||||||||||
Sales and marketing
|
11,282
|
24,444
|
37,306
|
63,202
|
||||||||||||
General and administrative
|
11,702
|
16,887
|
43,980
|
32,806
|
||||||||||||
Total operating expenses
|
27,947
|
48,627
|
95,975
|
113,230
|
||||||||||||
Loss from operations
|
(26,046
|
)
|
(79,048
|
)
|
(87,875
|
)
|
(111,479
|
)
|
||||||||
Other income (expense), net:
|
||||||||||||||||
Interest income
|
419
|
2
|
480
|
19
|
||||||||||||
Interest expense
|
—
|
(269
|
)
|
(549
|
)
|
(798
|
)
|
|||||||||
Change in fair value of convertible notes
|
(25,000
|
)
|
—
|
(25,000
|
)
|
—
|
||||||||||
Loss on extinguishment of debt
|
—
|
—
|
(772
|
)
|
—
|
|||||||||||
Total other income (expense), net
|
(24,581
|
)
|
(267
|
)
|
(25,841
|
)
|
(779
|
)
|
||||||||
Loss before income taxes
|
(50,627
|
)
|
(79,315
|
)
|
(113,716
|
)
|
(112,258
|
)
|
||||||||
Income tax provision
|
—
|
—
|
—
|
—
|
||||||||||||
Net loss and comprehensive loss
|
$
|
(50,627
|
)
|
$
|
(79,315
|
)
|
$
|
(113,716
|
)
|
$
|
(112,258
|
)
|
||||
Net income (loss) attributable to common stockholders, basic and diluted
|
$
|
(50,627
|
)
|
$
|
(79,315
|
)
|
$
|
(113,716
|
)
|
$
|
(112,258
|
)
|
||||
Net income (loss) per share attributable to common stockholders, basic and diluted
|
$
|
(1.29
|
)
|
$
|
(2.02
|
)
|
$
|
(2.89
|
)
|
$
|
(2.90
|
)
|
||||
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic and
diluted
|
39,397,347
|
39,195,211
|
39,361,948
|
38,765,151
|
Three months ended
September 30, |
Nine months ended
September 30, |
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
GAAP net loss per share to common stockholders, basic and diluted
|
$
|
(1.29
|
)
|
$
|
(2.02
|
)
|
$
|
(2.89
|
)
|
$
|
(2.90
|
)
|
||||
Stock-based compensation
|
0.08
|
0.14
|
0.19
|
0.41
|
||||||||||||
Non-GAAP net loss per share to common stockholders, basic and diluted
|
$
|
(1.21
|
)
|
$
|
(1.88
|
)
|
$
|
(2.70
|
)
|
$
|
(2.49
|
)
|
Three months ended
September 30, |
Nine months ended
September 30, |
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
GAAP net loss attributable to common stockholders, basic and diluted
|
$
|
(50,627
|
)
|
$
|
(79,315
|
)
|
$
|
(113,716
|
)
|
$
|
(112,258
|
)
|
||||
Stock-based compensation
|
3,057
|
5,478
|
7,592
|
15,850
|
||||||||||||
Non-GAAP net loss attributable to common stockholders, basic and diluted
|
$
|
(47,570
|
)
|
$
|
(73,837
|
)
|
$
|
(106,124
|
)
|
$ |
(96,408
|
)
|
Three months ended
September 30, |
Nine months ended
September 30, |
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
GAAP gross profit (loss)
|
$
|
1,901
|
$
|
(30,421
|
)
|
$
|
8,100
|
$
|
1,751
|
|||||||
Stock-based compensation
|
35
|
104
|
94
|
403
|
||||||||||||
Non-GAAP gross profit (loss)
|
$
|
1,936
|
$
|
(30,317
|
)
|
$
|
8,194
|
$
|
2,154
|
|||||||
GAAP gross margin
|
24.0
|
%
|
*
|
33.3
|
%
|
7.9 |
%
|
|||||||||
Stock-based compensation
|
0.5
|
%
|
*
|
0.4
|
%
|
1.8
|
%
|
|||||||||
Non-GAAP gross margin
|
24.5
|
%
|
*
|
33.7
|
%
|
9.7
|
%
|
|||||||||
GAAP research and development expense
|
$
|
4,963
|
$
|
7,296
|
$
|
14,689
|
$
|
17,222
|
||||||||
Stock-based compensation
|
(707
|
)
|
(1,584
|
)
|
(1,142
|
)
|
(3,751
|
)
|
||||||||
Non-GAAP research and development expense
|
$
|
4,256
|
$
|
5,712
|
$
|
13,547
|
$
|
13,471
|
||||||||
GAAP sales and marketing expense
|
$
|
11,282
|
$
|
24,444
|
$
|
37,306
|
$
|
63,202
|
||||||||
Stock-based compensation
|
(642
|
)
|
(1,841
|
)
|
(1,975
|
)
|
(5,595
|
)
|
||||||||
Non-GAAP sales and marketing expense
|
$
|
10,640
|
$
|
22,603
|
$
|
35,331
|
$
|
57,607
|
||||||||
GAAP general and administrative expense
|
$
|
11,702
|
$
|
16,887
|
$
|
43,980
|
$
|
32,806
|
||||||||
Stock-based compensation
|
(1,673
|
)
|
(1,949
|
)
|
(4,381
|
)
|
(6,101
|
)
|
||||||||
Non-GAAP general and administrative expense
|
$
|
10,029
|
$
|
14,938
|
$
|
39,599
|
$
|
26,705
|
||||||||
GAAP total operating expense
|
$
|
27,947
|
$
|
48,627
|
$
|
95,975
|
$
|
113,230
|
||||||||
Stock-based compensation
|
(3,022
|
)
|
(5,374
|
)
|
(7,498
|
)
|
(15,447
|
)
|
||||||||
Non-GAAP total operating expense
|
$
|
24,925
|
$
|
43,253
|
$
|
88,477
|
$
|
97,783
|
||||||||
GAAP operating loss
|
$
|
(26,046
|
)
|
$
|
(79,048
|
)
|
$
|
(87,875
|
)
|
$
|
(111,479
|
)
|
||||
Stock-based compensation
|
3,057
|
5,478
|
7,592
|
15,850
|
||||||||||||
Non-GAAP operating loss
|
$
|
(22,989
|
)
|
$
|
(73,570
|
)
|
$
|
(80,283
|
)
|
$
|
(95,629
|
)
|