Anzu Special Acquisition Corp I *

PROPOSED BUSINESS COMBINATION: Envoy Medical, Inc.

ENTERPRISE VALUE: $tbd million

ANTICIPATED SYMBOL: COCH

Anzu Special Acquisition Corp I proposes to combine with Envoy Medical, Inc.

Envoy Medical Corp is a hearing health company focused on providing technologies and solutions across the hearing loss spectrum.

TRANSACTION

SPAC FUNDING

Subscription Agreement

• The Sponsor has agreed to subscribe for and purchase 1,000,000 shares of Anzu’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”) at a price of $10.00 per share, for gross proceeds of $10,000,000
  • The deemed original issuance price will be $10.00 per share of Series A Preferred Stock (the “Original Issuance Price”).
  • The holders of Series A Preferred Stock will be entitled to dividends at the rate of 12% per annum on the Original Issuance Price.
  • The Series A Holders will be also entitled to fully participate in any dividends or other distributions declared or paid on the Anzu Class A Common Stock.
  • Regular Dividends will be payable in cash quarterly in arrears.
• The Subscription Agreement will terminate with no further force and effect upon the earliest to occur of:
  • (i) such date and time as the Business Combination Agreement is terminated in accordance with its terms without being consummated
  • (ii) upon the mutual written agreement of each of Anzu, the Sponsor and Envoy to terminate the Subscription Agreement
  • (iii) if the closing of the PIPE Investment (the “PIPE Closing”) has not occurred by such date other than as a result of a breach of the Sponsor’s obligations under the Subscription Agreement, upon the date that is 30 days after the Outside Date or
  • (iv) if any of the conditions to the PIPE Closing set forth in the Subscription Agreement are not satisfied or waived, or are not capable of being satisfied, on or prior to the PIPE Closing and, as a result thereof, the PIPE Investment will not be and is not consummated at the PIPE Closing.

OTC Equity Prepaid Forward Transaction

• Anzu and Meteora Special Opportunity Fund entered into an OTC Equity Prepaid Forward Transaction
  • Excluding the shares of Anzu Class A Common Stock transferred to Seller as the Share Consideration the aggregate total number of Shares will in no event be more than 4,300,000 Shares (the “Maximum Number of Shares”).
  • The Number of Shares is subject to reduction as described under “Optional Early Termination” in the Forward Purchase Agreement.
  • Seller also may transfer any Shares as needed to beneficially own no more than 9.9% of the total number of shares of Anzu Class A Common Stock outstanding on a post-combination basis.
• The Forward Purchase Agreement provides that no later than the earlier of
  • (a) one business day after the Closing and
  • (b) the date any assets from Anzu’s trust account are disbursed in connection with the Business Combination (the “Prepayment Date”)
    • Seller shall be paid directly, out of the funds held in Anzu’s trust account, an amount (the “Prepayment Amount”) equal to the product of
      • (i) the redemption price per share indicated to investors ahead of Anzu’s redemption notice deadline (the “Redemption Price”) and
      • (ii) the Number of Shares less
        • (y) 50% of the Prepayment Shortfall.
• On the Prepayment Date, in addition to the Prepayment Amount, the Counterparty shall transfer a number of shares of Anzu Class A Common Stock to the Seller equal to the product of
  • (x) the Number of Shares and
  • (y) 2.00%, which Share Consideration shall be incremental to the Maximum Number of Shares, shall not be included in the Number of Shares under the Forward Purchase Agreement, and Seller shall have no obligations with respect to such Share Consideration in connection with the Forward Purchase Agreement, other than to sell them pursuant to an effective FPA Registration Statement or an available exemption under the Securities Act.
• The Counterparty has agreed to file a registration statement with the SEC registering the resale of the Shares, the Shortfall Sale Shares, the Share Consideration, the Shortfall Warrants and the Shortfall Warrant Shares (the “FPA Registration Statement”) with 45 days following the Closing.
  • Seller may, at its discretion, sell Shares without a payment obligation to the Counterparty until such time as the gross proceeds from such Shortfall Sales equal 1% of the product of
    • (x) the Number of Shares and
    • (y) the Redemption Price (the “Prepayment Shortfall”).
  • Counterparty shall retain an amount equal to 50% of the Prepayment Shortfall on the Prepayment Date and Seller shall pay the remaining 50% of the Prepayment Shortfall on the on the earlier of
    • (a) the FPA Registration Statement Effective Date and
    • (b) the first OET Date (as discussed below) and at such time the Seller may not make any additional Shortfall Sales.
  • The Seller in its sole discretion may request warrants of the Counterparty exercisable for shares of Anzu Class A Common Stock in an amount equal to
    • (i) 4,300,000 shares of Anzu Class A Common Stock less
    • (ii) the Number of Shares specified in the Pricing Date Notice.
      • The Shortfall Warrants will
        • (i) have an exercise price equal to the Reset Price
        • (ii) expire on June 30, 2024 and
        • (iii) not provide for cashless exercise or net share settlement.
    • The Form of Shortfall Warrant shall be agreed upon by the parties to the Forward Purchase Agreement within 45 days of the date of the Forward Purchase Agreement.
• Seller may also, at its discretion, terminate the transaction in whole or in part so long as Seller provides written notice to Counterparty which shall specify the quantity by which the Number of Shares is to be reduced (the “Terminated Shares”).
  • The Counterparty shall be entitled to an amount per Terminated Share equal to the product of
    • (x) the number of Terminated Shares multiplied by
    • (y) the Reset Price (as defined below), with the remainder of the proceeds going to the Seller.
  • Following the Closing, the reset price (the “Reset Price”) will initially be the per share Redemption Price, but will be adjusted on the first scheduled trading day of each week (each a “Reset Date”) commencing with the first week following the thirtieth day after the Closing to the lower of
    • (a) the per share Redemption Price and
    • (b) the VWAP Price of the shares of Anzu Class A Common Stock of the week immediately prior to the applicable Reset Date, but not lower than $4.00; provided, however, that the Reset Price may be further reduced to the price at which the Counterparty sells, issues or grants any shares of Anzu Class A Common Stock or securities convertible or exchangeable into shares of Anzu Class A Common Stock (other than as otherwise contemplated by a business combination agreement relating to the Business Combination).
• The maturity date will be the earliest to occur of
  • (a) the later of
    • (x) June 30, 2024 and
    • (y) the 365th day following the Closing and
  • (b) the date specified by Seller in a written notice to be delivered to Counterparty at Seller’s discretion (not earlier than the day such notice is effective) after the occurrence of a
    • (x) Seller VWAP Trigger Event or
    • (y) Delisting Event (the “Maturity Date”).
  • Upon the occurrence of the Maturity Date, the Counterparty is obligated to pay to Seller an amount equal to the product of
    • (1)
      • (a) the Number of Shares as set forth in the initial Pricing Date Notice less
      • (b) the number of Terminated Shares, multiplied by
    • (2) $0.25 or, if Counterparty elects to provide the Maturity Consideration in shares of Anzu Class A Common Stock as described in the following sentence, $0.50 (the “Maturity Consideration”).
  • At the Maturity Date, the Counterparty will be entitled to deliver the Maturity Consideration to Seller in cash or in shares of Anzu Class A Common Stock (other than in the case of a Delisting Event, in which case it will be at the election of the Seller).
  • If paid in shares of Anzu Class A Common Stock, the number of shares of Anzu Class A Common Stock shall be based on the average daily VWAP Price over 30 trading days ending on the Maturity Date, to the extent the shares of Anzu Class A Common Stock used to pay the Maturity Consideration are freely tradeable by Seller.
  • If such shares of Anzu Class A Common Stock used to pay the Maturity Consideration are not freely tradeable by Seller, the Counterparty shall pay to Seller an additional amount equal to the product of
    • (a) 3 multiplied by
    • (b) the
      • (i) the Number of Shares as set forth in the initial Pricing Date Notice less
      • (ii) the number of Terminated Shares (the “Penalty Shares”), provided that if such Penalty Shares become freely tradeable by Seller within 45 days after the Maturity Date, the Seller shall return to Counterparty such number of Penalty Shares that are valued in excess of Maturity Consideration based on the 10-day VWAP ending on the date that such Shares become freely tradeable by Seller.
• The Forward Purchase Agreement may be terminated if
  • (a) a business combination agreement relating to the Business Combination is terminated prior to the Closing or
  • (b) if a business combination agreement relating to the Business Combination is not executed by April 30, 2023.
  • If the Forward Purchase Transaction is terminated after the Closing, or is terminated and the Business Combination is later consummated, and except if due to a material breach by Seller, Anzu and Envoy, jointly and severally, will be obligated to pay Seller’s actual out-of-pocket reasonable and documented fees, costs and expenses relating to the Forward Purchase Transactions in an amount not to exceed $50,000 (the “Break-up Consideration”).

SPONSOR SUPPORT AGREEMENT

• The Sponsor has agreed, among other things:
  • (i) subject to and upon the Closing, forfeit 10,010,000 shares of Anzu’s Class B common stock, par value $0.0001 per share (the “Anzu Class B Common Stock”) less the Retained Sponsor Shares
    • “Retained Sponsor Shares” means an amount of Anzu Class B Common Stock equal to
      • (a) 4,500,000 shares in the aggregate, minus
      • (b) the Expense Excess Shares, if any; provided, however, that the Sponsor shall exchange 2,500,000 of the Retained Sponsor Shares for shares of Series A Preferred Stock in connection with the Anzu Exchange Offer (the “Exchange”).
  • (ii) subject to and upon the Closing, to forfeit all of the 12,500,000 outstanding Anzu private placement warrants, each exercisable for one share of Anzu Class A Common Stock, held by the Sponsor,

LOCK-UP

• Company and Sponsor
  • 6 months from the Closing Date

NOTABLE CONDITIONS TO CLOSING

• That Anzu have at least $5,000,001 of net tangible assets remaining after giving effect to redemptions and the PIPE Investment

NOTABLE CONDITIONS TO TERMINATION

• By written notice by Anzu or Envoy if the Effective Time shall not have occurred prior to (x) September 30, 2023 or (y) December 31, 2023, if Anzu obtains the requisite approval of its stockholders to extend the deadline for Anzu to consummate its initial business combination to such date (the “Outside Date”)
• By written notice by Anzu if Envoy fails to deliver certain financial statements on or before April 30, 2023

ADVISORS

• None were mentioned at this time.

EXTENSION – 3/2/23 – LINK

• The SPAC approved the extension from March 4, 2023 to September 30, 2023
  • 38,187,226 shares were redeemed for approximately $10.15/Share
  • No contribution was made to the trust account.

SUBSEQUENT EVENT – 2/24/23 – LINK

• The Company and the Sponsor entered into extension support agreements with several unaffiliated third parties pursuant to which each Holder agreed to
  • (i) notify the Sponsor at least three business days prior to the Special Meeting regarding the number of shares of the Company’s Class A common stock that such Holder intends to redeem and the number of Public Shares that such Holder intends to retain in connection with the Special Meeting and
  • (ii) vote (and to cause its controlled affiliates to vote) all Public Shares beneficially owned them on the record date for the Special Meeting in favor of the Extension Amendment Proposal.
• In exchange, the Sponsor agreed to transfer, immediately following consummation of an initial business combination, 20,000 shares of the Company’s Class B common stock (“Founder Shares”) to each Holder for every 100,000 Public Shares held by such Holder immediately following the Special Meeting, up to a maximum of 80,000 Founder Shares to each Holder.
• Pursuant to the Extension Support Agreements, the Holders agreed to vote an aggregate of 3,311,894 Public Shares in favor of the Extension Amendment Proposal.

SUBSEQUENT EVENT – 2/21/23 – LINK

• The special meeting has been adjourned from February 21, 2023, to February 28, 2023.

LETTER OF INTENT – 2/6/23 – LINK

• The SPAC entered into a non-binding letter of intent with Envoy Medical Corporation.
• Anzu and Envoy extended their mutual exclusivity to work towards the Proposed Business Combination until March 4, 2023.
• The Nasdaq Stock Market LLC has reserved the stock symbol of “COCH”

SUBSEQUENT EVENT – FORWARD PURCHASE AGREEMENT – 12/7/21 LINK

• On December 6, 2021, Anzu Special Acquisition Corp I (the “Company”) entered into Forward Purchase Agreements (collectively, the “Forward Purchase Agreements”) with certain institutional investors and anchored by Arena Capital Advisors, LLC and Fir Tree Partners (collectively, the “Forward Purchasers”), pursuant to which the Forward Purchasers have agreed, subject to certain conditions, to purchase the following:
  • Up to an aggregate of $80,000,000 of unsecured convertible notes of the Company (“Convertible Notes”) immediately prior to the closing of the Company’s initial business combination (the “Business Combination Closing”). The terms of the Convertible Notes, including the terms on which the Convertible Notes will convert into shares of the Company’s Class A common stock (“Class A Common Stock”), will be negotiated by the Company and the Forward Purchasers, each acting in its sole discretion, prior to the issuance of the Convertible Notes.
    • The aggregate total of up to $80,000,000 from the issuance of the Convertible Notes would be received by the Company upon the Business Combination Closing.
  • Up to an aggregate of 4,000,000 forward purchase securities of the Company (the “Forward Purchase Securities”) for $10.00 per Forward Purchase Security, or an aggregate total of up to $40,000,000, immediately prior to the Business Combination Closing. Each Forward Purchase Security would consist of one share of Class A Common Stock issued and sold by the Company and one-sixth of one warrant transferred by Anzu SPAC GP I LLC (the “Sponsor”) for no value, with each whole redeemable warrant exercisable to purchase one share of Class A Common Stock for $11.50 per share.
    • The aggregate total of up to $40,000,000 from the issuance of the Forward Purchase Securities would be received by the Company upon the Business Combination Closing.
• In addition, under the Forward Purchase Agreements, if the Company determines to raise capital by the private placement of equity securities in connection with the Business Combination Closing (the “New Equity Securities”), the Company shall first make an offer to the Forward Purchasers to purchase the securities then offered on the same terms as such New Equity Securities, in an aggregate amount of up to $120,000,000.
  • Any commitment by any Forward Purchaser under any of the Forward Purchase Agreements to purchase New Equity Securities is subject to and conditioned upon the acceptance of the Company’s offer by such Forward Purchaser, following the Company’s notification to such Forward Purchaser of its intention to offer the New Equity Securities.

MANAGEMENT & BOARD

Executive Officers

Dr. Whitney Haring-Smith, 36
Chief Executive Officer & Director

He has served as a co-founding managing partner at Anzu Partners since March 2015, where he has led the IPO-crossover investment into Ai-Media, a global provider of technology-enabled live and recorded captioning, transcription and translation services and led the mezzanine financing for Pivotal Systems Corporation, a gas flow monitoring provider and control technology platform for the global semiconductor industry. Dr. Haring-Smith serves on the board of multiple private technology companies, including Adaptive Surface Technologies since August 2020, Volatiq since July 2020, Sofregen Medical since August 2019 and Slyce Acquisition since November 2016. He previously served on the board of MultiMechanics, Inc. from January 2019 to November 2019, Axsun Technologies, Inc. from November 2016 to January 2019 and Lightship Works, Inc. from May 2015 to May 2020. In addition, he led the acquisition of Axsun Technologies Inc., the Koninklijke Philips N.V. spin-off, returning approximately eight times investors’ invested capital, and MultiMechanics, which was acquired by Siemens in 2019. He was formerly a BCG Principal from January 2011 to March 2015 in San Francisco, Hong Kong, Nigeria and United Kingdom, where he led transformations for multi-billion-dollar business units of large publicly-traded companies. Dr. Haring-Smith received his bachelor’s degree and master’s degree from Yale University in Political Science and his doctorate from Oxford University as a Rhodes Scholar.

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Daniel J. Hirsch, 48 [Appointed 10/1/22]
Chief Financial Officer,Corporate Secretary, Director 

Mr. Hirsch was a principal of Cascade Acquisition Holdings, LLC, the sponsor of a special purpose acquisition company, Cascade Acquisition Corp. (NYSE: CAS), formed in November 2020, and served as its chief operating officer and chief financial officer through May 2022. Mr. Hirsch served as a consultant to Trinity Real Estate Investments, LLC from January 2019 through November 2019 in connection with Trinity’s sponsorship of a special purpose acquisition company, Trinity Merger Corp, which completed its initial business combination in November 2019 with Broadmark Realty Capital (NYSE: BRMK) (“Broadmark”). From November 2019 through present, Mr. Hirsch has served on the board of Broadmark and is currently the chair of the Nominating and Governance Committee and a member of the Compensation Committee and the Finance Committee. In addition, Mr. Hirsch has served on the board of The Macerich Company (NYSE: MAC) since 2018 and is currently a member of the Compensation Committee and Nominating and Governance Committee. In addition, Mr. Hirsch served as a consultant to Farallon Capital Management, L.L.C. (“Farallon”), an investment firm that manages capital on behalf of institutions and individuals, for which he has served as a board designee with respect to Farallon’s investment in Playa Hotels & Resorts N.V. (NASDAQ: PLYA), from January 2017 to March 2020. During his tenure as a director at Playa Hotels & Resorts N.V., Mr. Hirsch served as the chair of the Compensation Committee, and a member of the Nominating and Governance Committee and Capital Allocation Committee. Previously, from November 2003 to December 2016, Mr. Hirsch held several senior positions at Farallon, including Managing Member of the Real Estate Group from 2009 to December 2016, Managing Director from 2007 to 2008 and Legal Counsel from 2003 to 2006. Prior to joining Farallon, Mr. Hirsch worked as an associate in the San Francisco office of the law firm Covington & Burling LLP, from 2001 to 2003. Mr. Hirsch graduated from Yale Law School with a J.D. and earned a Bachelor of Arts degree, summa cum laude, in Law, Jurisprudence and Social Thought from Amherst College.

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John W. Joy, 56 [Resigned 8/4/22]
Chief Financial Officer

He served as Vice President of Corporate Development from 2008 to 2020 and Vice President of Financial Planning and Analysis from 2004 to 2008 at Ashland, where his significant transaction experience included: IPO / spin-off of Valvoline ($5.3 billion transaction value); acquisition of International Specialty Products ($3.2 billion transaction value) and Hercules ($3.4 billion transaction value); sale of Ashland Water Technologies ($1.8 billion transaction value), composites business and butanediol facility in Marl, Germany ($1 billion transaction value) and distribution business ($1 billion transaction value). Prior to Ashland, he was a director at PepsiCo from 1992 to 2004, where he led financial planning and analysis for a $9 billion division. Mr. Joy received his bachelor’s degree from Colgate University in Mathematical Economics and his master of management from Kellogg Graduate School of Management at Northwestern University.

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Peter J. Ganz, 58 [Resigned 8/4/22]
General Counsel & Corporate Secretary

He served as Senior Vice President, General Counsel and Secretary and Chief Compliance Officer at Ashland from June 2011 to January 2021, where he was a member of the executive committee and was responsible for managing Ashland’s legal and corporate governance matters, as well as overseeing Ashland’s ethics and compliance, government relations, risk and insurance and real estate functions. Prior to Ashland, he was Executive Vice President, General Counsel and Secretary at Foster Wheeler from September 2005 to January 2010, a $5 billion publicly traded company, and General Counsel and Secretary at G-I Holdings (formerly GAF Corporation), a $3.5 billion group of related companies. Mr. Ganz received his bachelor’s degree from Duke University and his juris doctorate from Harvard Law School.

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Board of Directors

William Wulfsohn, 58 [Resigned 8/4/22]
Chairman of the Board of Directors

He served as the Chief Executive Officer and Chairman of Ashland from 2015 to 2019, where he led Ashland’s transition to a pure-play specialty chemicals company and oversaw multiple spinouts and divestitures. This included the successful $5.3 billion separation of Valvoline, where Mr. Wulfsohn served as the founding chairman for the first year. Prior to Ashland, he was the President and Chief Executive Officer of Carpenter Technology Corporation from 2010-2014. Mr. Wulfsohn currently serves as a board director for Avient, formerly known as PolyOne. He was also previously a consultant with McKinsey & Co. and senior executive with PPG, Honeywell, and Rohm and Haas. Mr. Wulfsohn received his bachelor’s degree from the University of Michigan in Chemical Engineering and his master of business administration from Harvard Business School.

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Teresa A. Harris, 55 [Resigned 8/4/22]
Director 

She is a finance, strategy and business development executive with experience in industrial technology software. She has served on the board of directors of Altair since 2016, including during its IPO process and listing on the NASDAQ in 2017. Altair is currently a $4.35 billion publicly traded software technology company focused on data analytics, product development, and high-performance computing. She is Chair of the compensation committee and a member of the audit and M&A committees. Ms. Harris is also on the board of USA Climbing, Landmark West and a private technology company, Bungie, which created the Halo and Destiny video game franchises. She was formerly the senior-most U.S. executive for strategy finance and M&A for Vivendi from 2001 to 2014, the $30 billion European media company, where she was a lead negotiator of a $5.8 billion transaction with NBC Universal. She began her career as an investment banker with JP Morgan. Ms. Harris received her bachelor’s degree from Stanford University in Economics and her master of business administration from Yale School of Management in Finance.

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Priya Cherian Huskins, 48
Director 

Ms. Huskins is an executive advisor for public companies and fast-growing private companies on risk mitigation. She is currently a partner and senior vice president at Woodruff Sawyer, where she has been focused on Director & Officer (D&O) insurance since 2003. In addition to serving on the board of Woodruff Sawyer, Ms. Huskins also serves on the board of Realty Income Corporation, an S&P 500 public company, where she serves on the Corporate Governance and Nominating Committee and is the Chair of the Compensation Committee. She also serves on the advisory board of the Stanford Rock Center for Corporate Governance. She is a former senior associate at Wilson Sonsini Goodrich & Rosati (WSGR), a prominent law firm, where she advised companies on M&A and corporate law transactions. Ms. Huskins received her bachelor’s degree from Harvard College and her juris doctorate from the University of Chicago Law School.

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Susan J. Kantor, 65
Director 

Ms. Kantor has experience leading international finance, tax, treasury, risk, compliance and technology enablement for global services organizations. She was a National Advisory Partner for PwC from 2011 to 2016, a CFO & Treasurer for PRTM from 1997 to 2011, and a former CFO at Monitor Group from 1995 to 1997. During her time at PRTM, she completed several successful M&A transactions in the U.S. and abroad, including the sale of PRTM to PwC. Ms. Kantor previously served as an executive with Parexel, a clinical research organization, and the Boston Consulting Group. Ms. Kantor is currently on the board of Teknor Apex, a billion dollar privately-held material science company, the board of Guest Services, a hospitality company, the board of Point Pleasant Resort and Audit Committee chair for the International Council on Clean Transportation (ICCT). Ms. Kantor previously served as a board director for Lionbridge Technologies from 2016 to 2017 when it was a $550 million publicly held company. She received her bachelor’s degree from Grove City College in Accounting and Business Administration and her CPA in MA.

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Diane L. Dewbrey, 58 [Appointed 10/1/22]
Director 

Since November 2018, Ms. Dewbrey has served as an independent director of MBIA Inc., a NYSE-listed holding company whose subsidiaries provide financial guarantee insurance and other specialized financial services. Ms. Dewbrey serves on MBIA’s Audit Committee, Compensation and Governance Committee, and Finance and Risk Committee. Since July 2022, Ms. Dewbrey has been a director of Chandler Asset Management (ESOP) and a member of its Compensation Committee. Additionally, Ms. Dewbrey served on Barrett Business Services, Inc. (NASDAQ: BBSI) from November 2019 to June 2022 and was Chair of the Nominating/Governance Committee, and from 2020 to 2021 she was a Board Advisor to Organic Valley Cooperative, largest organic dairy US cooperative, where she participated in all the director committees. For five years, until its merger with Consolidated Communications in 2014, Ms. Dewbrey served as an independent director and then chair (2013-14) of the board of Enventis, Inc. Prior to serving as a director at Enventis, she held various senior positions at Fifth Third Bancorp, where over an eighteen-year period she became Senior Vice President & Director of Central Operations and a member of the Executive Management Team. Then, she served as CEO of Foundation Bank from 2006 to 2015, and was Director of the Foundation Bancorp and Foundation Bank Board. Ms. Dewbrey is currently a director of the YMCA of The USA where she serves as Chair of the Investment Committee. Ms. Dewbrey earned her BS degree in Mathematics from Xavier University.

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