Envoy Medical, Inc. announced that it has entered into an agreement for the private placement of promissory note for the gross proceeds of $10,000,000 on February 27, 2024. The transaction included participation from new lender GAT Funding, LLC. The notes bear interest of 8% per annum 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 note has a five year term and matures on February 27, 2029.

The company will issue warrants to purchase 250,000 shares of company Class A common stock for each $2,500,000 of principal funded under the note as commitment fee. 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 warrants to purchase 500,000 shares of Class A Common Stock at an exercise price of $1.24 per share the closing price on February 27, 2024.Class A Common Stock at an exercise price of $1.24 per share the closing price on February 27, 2024.