Hearing aid technology company Eargo has a new majority owner
earwhich makes technological hearing aids, announced on Tuesday that healthcare investment firm Patient Square Capital is the company’s new majority owner.
Patient Square now owns approximately 76.3% of Eargo shares through the conversion of the senior secured convertible notes it had bought this summer and following a recent rights offering of ordinary shares.
Eargo said the offering raised approximately $32.3 million, including another $5.5 million investment from Patient Square.
“Eargo’s innovative technology, established remote support infrastructure and direct-to-consumer experience positions the company well for future growth, especially now that the new FDA rules increase patient access and that the company has a strengthened balance sheet,” Justin Sabet-Peyman, CEO of Patient Square, said in a statement. “We are thrilled to partner with the talented team at Eargo as majority owner of the company to continue executing Eargo’s mission to improve the lives of people with hearing loss.”
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Founded in 2010, Eargo went public about 10 years later. This launches its sixth generation hearing aid at the beginning of this year, which includes a sound adjustment algorithm designed to modify the volume according to the surrounding noise and a “mask mode” function.
In 2021, the hearing technology company revealed he was investigated by the U.S. Department of Justice regarding insurance claims he submitted for clients covered by federal employee health plans.
The company agreed to pay $34.37 million to resolve allegations that he submitted claims with unsupported hearing loss diagnostic codes.
Eargo reported net revenue of $7.9 million for the third quarter of this year, compared to a loss of $22.9 million for the third quarter of 2021. The company noted that it recorded the DOJ settlement during the third quarter of last year, and she estimated that many customers with unsubmitted or denied insurance claims would return their products.
Eargo reported gross profit of $1.9 million for the third quarter of 2022, compared to a gross loss of $30.4 million in the prior year period.
