Envoy Medical, Inc 10-K for FY2022

Envoy Medical, Inc. (COCH)

10-K 2023-04-03 For: 2022-12-31

Added on April 08, 2026

About this 10-K

Envoy Medical, Inc filed this 10-K on April 3, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $19.23M; compared with a net loss of $251.63K a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock and one-third of one redeemable warrant	ANZUU	The Nasdaq Stock Market LLC
Class A common stock, par value $0.0001 per share	ANZU	The Nasdaq Stock Market LLC
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	ANZUW	The Nasdaq Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

		Page
PART I
Item 1.	Business.	5
Item 1A.	Risk Factors.	23
Item 1B.	Unresolved Staff Comments.	56
Item 2.	Properties.	56
Item 3.	Legal Proceedings.	56
Item 4.	Mine Safety Disclosures.	56

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	57
Item 6.	[Reserved].	58
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	58
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	64
Item 8.	Financial Statements and Supplementary Data.	64
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	64
Item 9A.	Controls and Procedures.	64
Item 9B.	Other Information.	65
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	65

PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	66
Item 11.	Executive Compensation.	75
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	75
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	76
Item 14.	Principal Accounting Fees and Services.	79

PART IV
Item 15.	Exhibits, Financial Statement Schedules.	80
Item 16.	Form 10-K Summary.	81


Type of Transaction		Whether Stockholder Approval is Required
Purchase of assets		No
Purchase of stock of target not involving a merger with the company		No
Merger of target into a subsidiary of the company		No
Merger of the company with a target		Yes


Public shares		4,312,774
Founder shares		10,625,000
Total shares		14,937,774
Total funds in trust available for initial business combination	$	43,913,740
Public stockholders’ investment per public share	$	10.00
Implied value per share upon consummation of initial business combination	$	2.94

Name	Age	Position
Dr. Whitney Haring-Smith	38	Chairman of the Board of Directors & Chief Executive Officer
Daniel J. Hirsch	49	Chief Financial Officer, Corporate Secretary & Director
Diane L. Dewbrey	58	Independent Director
Priya Cherian Huskins	50	Independent Director
Susan J. Kantor	67	Independent Director

Individual	Entity	Entity’s Business	Affiliation
Dr. Whitney Haring-Smith	Anzu Partners	Investment firm	Co-founder & Managing Partner
	Adaptive Surface Technologies	Industrial technology	Board Member
	Voltaiq	Software solutions	Board Member
	Sofregen Medical	Biomaterials	Board Chair
	Partium (fka Slyce Acquisition)	Information technology services	Board Chair
	Xendee	Software solutions	Board Member
Priya Cherian Huskins	Woodruff Sawyer	Insurance	Employee, Compensation Committee Chair, Nominating and Corporate Governance Committee Member, Technology Risk Committee Member
	Realty Income Corporation	REIT	Compensation Committee Chair, Nominating and Corporate Governance Committee Member
	Stanford Rock Center for Corporate Governance	Academia	Advisory Member
	NMI Holdings, Inc.	Insurance	Board Member
	Long Term Stock Exchange	Securities Exchange	Board Member, Audit Committee Member
Susan J. Kantor	Teknor Apex Company	Specialty chemicals	Board Member
	Guest Services, Inc.	Hospitality	Board Member, Audit Committee Chair
	International Council on Clean Transportation	Climate Non-profit	Board Member, Audit Committee Chair
	Family & Community Resources	Human Services Non-profit	Board Member, Treasurer
Daniel J. Hirsch	Anzu Partners	Investment Firm	Consultant
	The Macerich Company	REIT	Board Member, Nominating and Governance Committee Member, Compensation Committee Member
	Broadmark Realty Capital	Real Estate Finance	Board Member, Nominating and Governance Committee Chair, Compensation Committee Member, Finance Committee Member
	Nuburu, Inc.	Industrial technology	Board Member
Diane L. Dewbrey	MBIA, Inc.	Financial Services	Board Member, Audit Committee Member, Finance Committee Member, Compensation Committee Member, Governance Committee Member
	Chandler Assets Management	Asset Management	Board Member
	YMCA of the USA	Non-profit	Board Member, Investment Committee Chair, Finance Committee Member, Audit Committee Member


	Class B Common Stock			Class A Common Stock
	Number of			Number of		Approximate
	Shares	Approximate		Shares	Approximate	Percentage of
	Beneficially	Percentage		Beneficially	Percentage of	Voting
Name of Beneficial Owners (1)	Owned(2)	of Class		Owned	Class	Control
Anzu SPAC GP I LLC (our sponsor)(3)	10,500,000	98.8	%	—	—	70.3	%
Dr. Whitney Haring-Smith	—	—		—	—	—
Daniel J. Hirsch	25,000	*		—	—	*
Diane L. Dewbrey	25,000	*		—	—	*
Priya Cherian Huskins	25,000	*		—	—	*
Susan J. Kantor	25,000	*		—	—	*
All officers and directors as a group	100,000	*		—	—	*


	For the Year ended
	December 31, 2022		December 31, 2021
Audit Fees (1)	$	100,360	$	183,005
Audit-Related Fees (2)	$	—	$	—
Tax Fees (3)	$	8,580	$	10,375
All Other Fees (4)	$	—	$	—
Total	$	108,940	$	193,380

Exhibit Number		Description of Exhibit

3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).
3.2		Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8 K, filed on March 2, 2023).
3.3		Bylaws (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (File No. 333-252861) filed on February 8, 2021).
4.1		Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252861) filed on February 8, 2021).
4.2		Specimen Share of Class A common stock Certificate (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (File No. 333-252861) filed on February 8, 2021).
4.3		Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 (File No. 333-252861) filed on February 8, 2021).
4.4		Warrant Agreement, dated March 1, 2021, between the Company and American Stock Transfer & Trust Company, as arrant agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).
4.5		Description of Securities (incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K, filed on March 31, 2022).
10.1		Promissory Note, dated December 30, 2020, issued to Anzu SPAC GP I LLC (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-252861) filed on February 8, 2021).
10.2		Letter Agreement, dated March 1, 2021, among the Company, the Sponsor and the Company’s officers and directors (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).
10.3		Investment Management Trust Agreement, dated March 1, 2021, between the Company and American Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).
10.4		Registration Rights Agreement, dated March 1, 2021, among the Company, the Sponsor and certain other security holders named therein (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).
10.5		Administrative Services Agreement, dated March 1, 2021, between the Company and Anzu Partners, LLC (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).
10.6		Sponsor Warrant Purchase Agreement, dated March 1, 2021, between the Company and the Sponsor (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).
10.7		Form of Indemnity Agreement between the Company and each of its officers and directors (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K, filed on March 4, 2021).

Exhibit Number		Description of Exhibit

10.8		Securities Subscription Agreement, dated December 30, 2020, between the Company and Anzu SPAC GP I LLC (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (File No. 333-252861) filed on February 8, 2021).
10.9		Form of Forward Purchase Agreement (Forward Purchase Securities) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 6, 2021).
10.10		Form of Forward Purchase Agreement (Convertible Notes) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 6, 2021).
10.11		Promissory Note, dated March 29, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed on May 16, 2022).
10.12		Form of Extension Support Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 24, 2023).
10.13*		Amendment No. 1 to Promissory Note, dated March 21, 2023.
10.14*		Promissory Note, dated March 21, 2023.
14		Form of Code of Ethics and Business Conduct (incorporated by reference to Exhibit 14 to the Company’s Registration Statement on Form S-1 (File No. 333-252861) filed on February 8, 2021).
24.1*		Power of Attorney (included on the signature pages herein).
31.1*		Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d) to 14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d) to 14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interaction Data File (formatted as inline XBRL with application taxonomy extension information contained in Exhibits 101)


	ANZU SPECIAL ACQUISITION CORP I

	By:	/s/ Dr. Whitney Haring-Smith
		Dr. Whitney Haring-Smith
		Chief Executive Officer

	Date:	April 3, 2023

Signature	Title	Date
/s/ Dr. Whitney Haring-Smith	Chairman of the Board of Directors, Chief Executive Officer &	April 3, 2023
Dr. Whitney Haring-Smith	Director (principal executive officer)

/s/ Daniel J. Hirsch	Chief Financial Officer, Corporate Secretary & Director (principal	April 3, 2023
Daniel J. Hirsch	financial and accounting officer)

/s/ Diane L. Dewbrey	Director	April 3, 2023
Diane L. Dewbrey

/s/ Priya Cherian Huskins	Director	April 3, 2023
Priya Cherian Huskins

/s/ Susan J. Kantor	Director	April 3, 2023
Susan J. Kantor

	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets as of December 31, 2022 and December 31, 2021	F-4
Statements of Operations for the years ended December 31, 2022 and December 31, 2021	F-5
Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and December 31, 2021	F-6
Statements of Cash Flows for the years ended December 31, 2022 and December 31, 2021	F-7
Notes to Financial Statements	F-8


	December 31, 2022		December 31, 2021
ASSETS:
Current assets:
Cash	$	107,773	$	149,845
Prepaid expenses		112,649		713,322
Total current assets		220,422		863,167
Investments held in Trust Account		430,047,193		425,037,665
Forward Purchase Agreement Assets		353,731		1,002,789
Total assets	$	430,621,346	$	426,903,621

LIABILITIES AND STOCKHOLDERS’ DEFICIT:
Current liabilities:
Accounts payable	$	1,177,546	$	618,742
Accrued expenses		3,945,680		2,059,431
Working Capital Loans (as stated in Note 5)		1,500,000		—
Income taxes payable		686,530		—
Total current liabilities		7,309,756		2,678,173
Deferred underwriting fee payable		10,412,500		14,875,000
Derivative warrant liabilities		1,066,667		21,063,972
Total liabilities		18,788,923		38,617,145

Commitments and Contingencies

Class A common stock subject to possible redemption, $0.0001 par value; 42,500,000 shares issued and outstanding at $10.11 and $10.00 per share redemption value as of December 31, 2022 and 2021, respectively		429,747,193		425,000,000

Stockholders’ deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of December 31, 2022 and 2021		—		—
Class A common stock, $0.0001 par value; 400,000,000 shares authorized; none issued or outstanding (excluding 42,500,000 shares subject to possible redemption) as of December 31, 2022 and 2021		—		—
Class B common stock, $0.0001 par value; 40,000,000 shares authorized; 10,625,000 shares issued and outstanding as of December 31, 2022 and 2021		1,063		1,063
Additional paid-in capital		—		—
Accumulated deficit		(17,915,833)		(36,714,587)
Total stockholders’ deficit		(17,914,770)		(36,713,524)
Total liabilities and stockholders’ deficit	$	430,621,346	$	426,903,621


	For Year Ended		For Year Ended
	December 31,		December 31,
	2022		2021
Operating expenses:
Formation and operating costs	$	4,888,124	$	5,204,970
Loss from operations		(4,888,124)		(5,204,970)

Other income (expense):
Interest earned on investments held in Trust Account		6,125,038		37,665
Deferred offering cost forgiveness		150,262		—
Offering costs allocated to warrant liabilities		—		(782,812)
Change in fair value of Forward Purchase Agreements		(649,058)		232,789
Change in fair value of warrant liabilities		19,997,306		5,465,695
Income (loss) before income tax expense		20,735,424		(251,633)
Income tax expense		(1,501,714)		—
Net income (loss)	$	19,233,710	$	(251,633)

Weighted average number of Class A common stock, basic and diluted		42,500,000		35,224,658
Basic and diluted net income (loss) per common stock, Class A	$	0.36	$	(0.01)
Weighted average shares outstanding of Class B common stock, basic and diluted		10,625,000		10,589,629
Basic and diluted net income (loss) per common stock, Class B	$	0.36	$	(0.01)


								Additional
	Class A Common Stock			Class B Common Stock				Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares		Amount		Capital		Deficit		Deficit
Balance as of December 31, 2021	—	$	—		10,625,000	$	1,063	$	—	$	(36,714,587)	$	(36,713,524)
Net income	—		—		—		—		—		19,233,710		19,233,710
Increase in redemption value of Class A common stock subject to redemption	—		—		—		—		—		(434,956)		(434,956)
Balance as of December 31, 2022	—	$	—		10,625,000	$	1,063	$	—	$	(17,915,833)	$	(17,914,770)


	Year Ended		Year Ended
	December 31,		December 31,
	2022		2021
Cash flow from operating activities:
Net income (loss)	$	19,233,710	$	(251,633)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization of prepaid expenses		704,857		499,699
Change in fair value of warrant liabilities		(19,997,306)		(5,465,695)
Gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities		(150,262)		—
Change in fair value of Forward Purchase Agreements		649,058		(232,789)
Offering costs allocated to warrant liabilities		—		782,812
Interest earned on investments held in Trust Account		(6,125,038)		(37,665)
Changes in operating assets and liabilities:
Prepaid expenses		(104,184)		(1,213,021)
Accounts payable		558,804		618,040
Accrued expenses		1,886,249		2,059,431
Income taxes payable		686,530		—
Net cash used in operating activities		(2,657,582)		(3,240,821)

Cash flows from investing activities:
Withdrawal from (investment of) funds in Trust Account		1,115,510		(425,000,000)
Net cash provided by (used in) investing activities		1,115,510		(425,000,000)

Cash flows from financing activities:
Proceeds from sale of Units, gross		—		425,000,000
Proceeds from sale of Private Placement Warrants		—		12,500,000
Payment of offering costs		—		(9,134,334)
Proceeds from note payable - related party		1,500,000		—
Net cash provided by financing activities		1,500,000		428,365,666

Net change in cash		(42,072)		124,845
Cash at beginning of year		149,845		25,000
Cash at end of year	$	107,773	$	149,845

Supplemental disclosure of non-cash financing activities:
Deferred underwriting commissions	$	—	$	14,875,000
Deferred offering costs included in accounts payable	$	—	$	(94,992)
Deferred offering costs associated with proposed public offering	$	—	$	94,992
Accretion of Class A common stock to redemption amount	$	(434,956)	$	(37,256,190)
Initial classification of Forward Purchase Agreements	$	—	$	(770,000)


	As Previously
Three months ended September 30, 2022	Reported filed		Adjustment		Restated
Deferred offering cost forgiveness	$	4,462,500	$	(4,312,237)	$	150,263
Net Income	$	5,690,350	$	(4,312,237)	$	1,378,113
Basic and diluted net income per common stock, Class A	$	0.11	$	(0.08)	$	0.03
Basic net income per common stock, Class B	$	0.11	$	(0.08)	$	0.03
Diluted net income per common stock, Class B	$	0.11	$	(0.08)	$	0.03


	As Previously
Nine months ended September 30, 2022	Reported filed		Adjustment		Restated
Deferred offering cost forgiveness	$	4,462,500	$	(4,312,237)	$	150,263
Net Income	$	21,242,449	$	(4,312,237)	$	16,930,212
Basic and diluted net income per common stock, Class A	$	0.40	$	(0.08)	$	0.32
Basic net income per common stock, Class B	$	0.40	$	(0.08)	$	0.32
Diluted net income per common stock, Class B	$	0.40	$	(0.08)	$	0.32


	Year Ended December 31, 2022
	Class A		Class B
Allocation of net income	$	15,386,968	$	3,846,742
Weighted average shares outstanding, basic and diluted		42,500,000		10,625,000
Basic and diluted net income per share	$	0.36	$	0.36


	Year Ended December 31, 2021
	Class A		Class B
Allocation of net loss	$	(193,470)	$	(58,163)
Weighted average shares outstanding, basic and diluted		35,224,658		10,589,629
Basic and diluted net loss per share	$	(0.01)	$	(0.01)


Gross proceeds	$	425,000,000
Less:
Proceeds allocated to Public Warrants		(14,026,667)
Class A common stock issuance costs		(23,229,523)
Plus:
Accretion of carrying value to redemption value		37,256,190
Class A common stock subject to possible redemption at December 31, 2021		425,000,000
Waiver of Class A shares issuance costs		4,312,237
Accretion of carrying value to redemption value		434,956
Class A common stock subject to possible redemption at December 31, 2022	$	429,747,193


	Quoted Prices		Significant		Significant
	in Active		Other		Other
	Markets		Observable		Unobservable
December 31, 2022	(Level 1)		(Level 2)		(Level 3)
Assets:
Investments held in Trust Account	$	430,047,193	$	—	$	—
Forward Purchase Agreements		—		—		353,731
Fair value at December 31, 2022	$	430,047,193	$	—	$	353,731
Liabilities:
Public Warrant liability	$	566,667	$	—	$	—
Private Warrant liability		—		500,000		—
Working Capital Loans – related party		—		—		1,500,000
Fair Value at December 31, 2022	$	566,667	$	500,000	$	1,500,000


FPA assets at December 31, 2021	$	1,002,789
Change in fair value of FPAs		(649,058)
FPA assets at December 31, 2022	$	353,731

Working Capital Loans at December 31, 2021	$	—
Issuance of loan		1,500,000
Change in fair value of working capital loan		—
Working Capital Loans at December 31, 2022	$	1,500,000


Level 3 Warrant liabilities at March 4, 2021	$	26,260,000
Change in fair value of warrant liabilities		(4,363,000)
Transfers from Level 3 to Level 1 investments		(14,000,000)
Warrants issued on April 12, 2021		103,000
Transfers from Level 3 to Level 2 investments		(8,000,000)
Level 3 Warrant liabilities at December 31, 2021	$	—

Issuance of FPA assets at December 6, 2021	$	770,000
Change in fair value of FPAs		232,789
Level 3 investments (at asset position) at December 31, 2021	$	1,002,789


	December 31, 2022			December 31, 2021
Unit Price	$	10.00		$	10.00
Remaining Term (in years)		0.16			0.50
Risk-Free Rate		4.18	%		0.19	%


	December 31, 2022
Principal Outstanding	$	1,500,000
Expected Remaining Term (in years)		0.16
Volatility		43.5	%
Risk-Free Rate		3.91	%


Warrant liabilities at December 31, 2021	$	21,063,972
Change in fair value of warrant liabilities		(19,997,305)
Warrant liabilities at December 31, 2022	$	1,066,667

Warrant liabilities at March 4, 2021	$	26,260,000
Warrants issued on April 12, 2021		269,667
Change in fair value of warrant liabilities		(5,465,695)
Warrant liabilities at December 31, 2021	$	21,063,972


	Year Ended December 31,		Year Ended December 31,
	2022		2021
Current
Federal	$	1,175,834	$	—
State		325,880		—
Deferred
Federal		(2,077,550)		(1,085,134)
State		(429,855)		—
Change in valuation allowance		2,507,405		1,085,134
Income tax provision	$	1,501,714	$	—


Statutory federal income tax rate	21.00	%	21.00	%
Cost allocated to warrants	0.00	%	65.33	%
Change in deferred offering costs	(0.15)	%	0.00	%
Change in fair value of warrant liabilities	(20.25)	%	(456.14)	%
Change in fair value of FPAs	0.66	%	(19.43)	%
Change in valuation allowance	6.82	%	389.24	%
Other	(0.84)	%	0.00	%
Effective tax rate	7.24	%	0.00	%

		ANZU SPECIAL ACQUISITION CORP I

		By:	/s/ Whitney Haring-Smith
		Name:	Whitney Haring-Smith
		Title:	Chief Executive Officer

Accepted and agreed this 21st day of March, 2023

ANZU SPAC GP I LLC

By:	/s/ Whitney Haring-Smith
Name:	Whitney Haring-Smith
Title:	President


Date: April 3, 2023	By:	/s/ Dr. Whitney Haring-Smith
		Dr. Whitney Haring-Smith
		Chief Executive Officer


Date: April 3, 2023	By:	/s/ Daniel J. Hirsh
		Daniel J. Hirsch
		Chief Financial Officer & Corporate Secretary