Envoy Medical, Inc.
For the period ended Sep 30, 2025. Filed Nov 10, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 10, 2025
COCH$7.15+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0001213900-25-069663
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001213900-25-107902
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 141 current paragraphs.
72 unchanged; 39 reworded; 30 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 44 previous and 44 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
The IDE was approved as a “staged” clinical trial. The first stage allowed for enrollment of 10 study participants prior to the Company having to formally request FDA approval to expand enrollment to the full subject cohort of 56 patients. The Company collected and submitted preliminary clinical data after the three-month follow up visit that adequately characterized device effectiveness of the first 10 study participants to justify study expansion into the second and final stage. Envoy Medical’s expansion request to the FDA was formally approved by the FDA on October 3, 2025. We have now started the final stage of the trial and have begun enrolling the final cohort of 46 study participants for a total study population of 56 patients.
Current report
Recent Developments
Current report
Expansion of Clinical Trial
Current report
On October 3, 2025, the FDA approved the advancement of the Company’s pivotal clinical trial for Acclaim CI to the second and final stage of the clinical trial based on three-month data from the 10 study participants from the first stage of the clinical trial. None of the 10 study participants from the first stage of the trial have reported any serious adverse events or unanticipated device effects. In addition, the preliminary clinical data effectively characterized that the investigational Acclaim CI can achieve effectiveness for its proposed intended use, which was a required condition of expanded trial enrollment being approved by the FDA.
Current report
The second and final stage of the clinical trial will consist of an additional 46 participants at seven clinical trial sites within the United States. Enrollment for the second stage is currently underway. On October 31, 2025, the first three patients enrolled in the final stage of the clinical trial.
Current report
Nasdaq Market Value of Listed Securities Requirement
Current report
On February 25, 2025, we received a deficiency notification letter (the “Notification Letter”) from The Nasdaq Stock Market (“Nasdaq”) stating that we were not in compliance with Nasdaq Listing Rule 5550(b)(2) (the “Rule”) because the market value of the Company’s listed securities did not meet the minimum of $35,000 (the “MVLS Requirement”) for the period for 31 consecutive business days between January 7, 2025 and February 24, 2025. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had a grace period of 180 calendar days to regain compliance with Nasdaq Listing Rule 5550(b)(2) and would return to compliance if the market value of our listed securities exceeds $35,000 for ten consecutive business days.
Current report
On August 26, 2025, we received a determination letter from Nasdaq notifying us that we had not regained compliance with the MVLS Requirement within the 180-day cure period. The determination letter informed the Company that it can request a hearing regarding Nasdaq’s determination with a Hearings Panel (the “Panel”) to discuss how we believe we will regain compliance and why the Company believes the Panel should grant an extension. The Company timely requested a hearing, which occurred on October 2, 2025.
Current report
On October 23, 2025, the Panel notified us that it has granted the Company’s request for an exception to demonstrate compliance with the MVLS Requirement for continued listing through February 23, 2026.
Current report
We intend to actively monitor the market value of our listed Common Stock and will consider available options to regain compliance with the MVLS Requirement. However, there can be no assurance that we will be able to regain compliance with the MVLS Requirement or that Nasdaq will grant us a further extension of time to regain compliance, if applicable.
Current report
September 2025 Offering
Current report
On September 22, 2025, we entered into a Securities Purchase Agreement (the “September Purchase Agreement”) with certain accredited and institutional investors named therein (the “Purchasers”), pursuant to which we agreed to issue and sell, in a registered direct offering by the Company directly to the Purchasers (the “September Registered Offering”) 1,908,402 shares (the “September Shares”) of our Common Stock at a purchase price of $1.31 per share.
Current report
Pursuant to the terms of the September Purchase Agreement, in a concurrent private placement (the “September Private Placement” and together with the September Registered Offering, the “September 2025 Offering”), the Company issued warrants to purchase up to an aggregate of 5,725,206 shares of Common Stock (the “September 2025 Private Placement Warrants”) with each of the Purchasers acquiring three warrants for every share of Common Stock purchased. The September 2025 Private Placement Warrants have an exercise price of $1.31 per share, will be exercisable commencing on the effective date of stockholder approval of the issuance of the shares of Common Stock issuable upon exercise of the September 2025 Private Placement Warrants (the “Stockholder Approval”), and will expire twenty-four months following the effective date of the Stockholder Approval.
Current report
The September 2025 Offering closed on September 23, 2025. The September 2025 Offering resulted in aggregate gross proceeds to the Company of $2,500. Additionally, if the holders of the September 2025 Private Placement Warrants exercise such September 2025 Private Placement Warrants in full for cash following the Stockholder Approval, the Company would receive additional gross proceeds of $7,500.
Current report
Additional warrants were issued to the placement agent to purchase 143,130 shares of Common Stock with an exercise price of $1.6375 per share.
Current report
October 2025 Offering
Current report
On October 7, 2025, we entered into an additional Securities Purchase Agreement (the “October Purchase Agreement”) with the Purchasers, pursuant to which we agreed to issue and sell, in a registered direct offering by the Company directly to the Purchasers (the “October Registered Offering”) 3,007,524 shares (the “October Shares”) of our Common Stock at a purchase price of $1.33 per share.
Current report
Pursuant to the terms of the October Purchase Agreement, in a concurrent private placement (the “October Private Placement” and together with the October Registered Offering, the “October 2025 Offering”), the Company issued warrants (the “October 2025 Private Placement Warrants”) to purchase up to an aggregate of 9,022,572 shares of common stock with each of the Purchasers acquiring three warrants for every share of Common Stock purchased. The October 2025 Private Placement Warrants have an exercise price of $1.33 per share, will be exercisable commencing on the effective date of a registration statement that has been filed with the SEC (the “Effective Date”) and will expire twenty-four months following the Effective Date.
Current report
The October 2025 Offering closed on October 9, 2025. The October 2025 Offering resulted in aggregate gross proceeds to the Company of $4,000. Additionally, if the holders of the October 2025 Private Placement Warrants exercise such October 2025 Private Placement Warrants in full for cash following the effective date of a registration statement, the Company would receive additional gross proceeds of $12,000.
Current report
Additional warrants were issued to the placement agent to purchase 225,564 shares of Common Stock with an exercise price of $1.6625 per share.
Current report
We recognize the private warrant liability at fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in our unaudited condensed consolidated statements of operations and comprehensive loss during each reporting period.
Current report
General and administrative expenses increased $752 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase is primarily due to increased public company costs of $268 and expenses directly related to the September 2025 Offering of $444. Additionally, increased consulting expenses of $132 were partially offset by decreased headcount-related expenses of $66.
Current report
The gain from the change in the fair value of the forward purchase agreement warrant liability was $64 for the three months ended September 30, 2025 compared to a loss of $311 for the three months ended September 30, 2024. For the three months ended September 30, 2025 the change was primarily a result of an amendment to the Forward Purchase Agreement that changed the Exercise Price Floor of the Shortfall Warrants (as defined in Note 9 of the unaudited condensed consolidated financial statements) to $1.50. The loss for the three months ended September 30, 2024 was driven by changes in the Company’s closing price during that period.
Current report
The loss from the change in the fair value of the private warrant liability was $339 for the three months ended September 30, 2025 as a result of issuing the warrants on September 23, 2025 and the subsequent remeasurement on September 30, 2025.
Current report
Other expense decreased by $8 for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to $15 of non-recurring income received in the three months ended September 30, 2024.
Current report
Comparison of the nine months ended September 30, 2025 and 2024
Current report
Cost of goods sold increased $78 for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase is primarily due to an increase in personnel costs, scrap, and non-recurring expenses partially of $144 offset by lower fees for third-parties performing work related to our products of $71.
Current report
The loss from the change in the fair value of the private warrant liability was $339 for the nine months ended September 30, 2025 as a result of issuing the warrants on September 23, 2025 and the subsequent remeasurement on September 30, 2025.
Current report
Net cash used in operating activities for the nine months ended September 30, 2024 was primarily used to fund a net loss of $16,177, adjusted for non-cash expenses in an aggregate amount of $3,053 and $266 of cash inflows changes in the levels of operating assets and liabilities. The change related to operating assets and liabilities relates to increases in accounts payable, accounts receivable, and inventories and decreases in other receivable, prepaid expenses and other current assets, operating lease liability (related party), accrued expenses, and product warranty liability.
Current report
Net cash provided by financing activities for the nine months ended September 30, 2024 was $14,581. This increase was driven by the $15,000 proceeds from the 2024 Term Loans, the receipt of $1,683 from the sale of Common Stock associated with the forward purchase agreement as well as proceeds from the exercise of Shortfall Warrants of $434, partially offset by dividends paid to holders of the Series A Preferred Stock of $1,833 and payments made on insurance financing loans of $703.
Removed paragraphs (11)
Previous report
The IDE was approved as a “staged” clinical trial with the first stage allowing enrollment of 10 study participants. Envoy Medical may request expansion into the second stage once it has discussed initial three to six month data on the 10 study participants with the FDA. If allowed by the FDA to proceed into the second stage, an additional 46 study participants will be enrolled for a total study population of 56 patients.
Previous report
The first two surgeries took place in February of 2025 and all 10 patients in the first stage were implanted by mid-April. To date, all 10 patients have been “activated” (i.e., devices turned on).
Previous report
Timing of expansion beyond the first stage is dependent on data collection and subsequent discussions with the FDA about the data. Envoy Medical is currently targeting expansion into the second stage in the fourth quarter of 2025 or the first quarter of 2026.
Previous report
The gain from the change in the fair value of the forward purchase agreement warrant liability was $37 thousand for the three months ended June 30, 2025 compared to a gain of $0.2 million for the three months ended June 30, 2024 primarily due to the decrease in stock price.
Previous report
Comparison of the six months ended June 30, 2025 and 2024
Previous report
Cost of goods sold increased $62 thousand for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase is primarily due to an increase in headcount in preparation of production growth of the Esteem FI-AMEI product.
Previous report
General and administrative expenses increased $0.2 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase is primarily due to a $0.3 million severance accrual for the former CFO partially offset by $0.2 million in reduced professional services for the six months ended June 30, 2025.
Previous report
Other expense decreased by $11 thousand for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, due to a reduction in interest incurred on insurance financing loans.
Previous report
Net cash used in operating activities for the six months ended June 30, 2024 was primarily used to fund a net loss of $10.2 million, adjusted for non-cash expenses in aggregate amount of $1.0 million and $1.0 million of cash used from net changes in the levels of operating assets and liabilities.
Previous report
The $1.0 million of cash outflows from net changes in the levels of operating assets and liabilities was primarily due to a decrease of $1.3 million in accrued expenses resulting from payments of Series A Preferred Stock dividends as well as an increase of $0.4 million in inventories resulting from purchases of Battery replacement parts for the Esteem FI-AMEI.
Previous report
Net cash provided by financing activities for the six months ended June 30, 2024 was $8.7 million primarily related to the $7.5 million proceeds from Term Loans as well as the receipt of $1.7 million from the sale of Common Stock associated with the Forward Purchase Agreement.
Reworded paragraphs (39)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements as of June 30, 2025 and December 31, 2024, and the three and six months ended June 30, 2025 and 2024, together with the notes thereto included elsewhere in this Report. It should also be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, together with related notes thereto included in the Form 10-K, which is accessible on the SEC’s website at www.sec.gov.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements as of September 30, 2025 and December 31, 2024, and the three and nine months ended September 30, 2025 and 2024, together with the notes thereto included elsewhere in this Report. It should also be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, together with related notes thereto included in the Form 10-K, which is accessible on the SEC’s website at www.sec.gov.
Previous wording
Our first product, the Esteem ® Fully Implanted Active Middle Ear Implant (“Esteem FI-AMEI”), received FDA approval in 2010. The Esteem FI-AMEI is a fully implanted active middle ear hearing device and remains the only FDA approved fully implanted hearing device in the US market. Unfortunately, the Esteem FI-AMEI failed to gain commercial traction, primarily due to a lack of reimbursement or insurance coverage from third-party payors.
Current wording
Our first product, the Esteem ® Fully Implanted Active Middle Ear Implant (“Esteem FI-AMEI”), received FDA approval in 2010. The Esteem FI-AMEI is a fully implanted active middle ear hearing device and remains the only FDA approved fully implanted hearing device in the U.S. market. Unfortunately, the Esteem FI-AMEI failed to gain commercial traction, primarily due to a lack of reimbursement or insurance coverage from third-party payors.
Previous wording
The Investigational Device Exemption (“IDE”) to begin a pivotal clinical study on the fully implanted Acclaim CI was granted by the FDA in October of 2024. Seven investigational sites were selected prior to the end of 2024. To date, five of the seven investigational sites have received Institutional Review Board (“IRB”) approvals and been successfully activated. The two remaining sites are waiting for IRB approval and activation.
Current wording
The Investigational Device Exemption (“IDE”) to begin a pivotal clinical study on the fully implanted Acclaim CI was granted by the FDA in October of 2024. Seven investigational sites were selected prior to the end of 2024.
Previous wording
Each implanted study participant will be followed through their 12 month visit. After all 56 patients have been through their 12 month visits, the data will be collected and analyzed in accordance with the clinical study protocol and statistical analysis plan. Upon finalization of the results, Envoy Medical intends to submit a Premarket Approval (“PMA”) application to the FDA. The FDA will have 180 days to review the PMA unless a panel review is requested. If a panel review is requested, it may add several months of additional review time to the PMA. As a result, Envoy Medical currently anticipates obtaining the FDA’s decision on our PMA at some point within the second half of 2027 or first half of 2028, depending on the FDA’s review process and timeline.
Current wording
Each implanted study participant will be followed through their 12-month visit. After all 56 patients have been through their 12-month visits, the data will be collected and analyzed in accordance with the clinical study protocol and statistical analysis plan. Upon finalization of the results, Envoy Medical intends to submit a Premarket Approval (“PMA”) application to the FDA. The FDA will have 180 days to review the PMA application unless a panel review is requested. If a panel review is requested, it may add several months of additional review time to the PMA application. As a result, Envoy Medical currently anticipates obtaining the FDA’s decision on our PMA application at some point within the second half of 2027 assuming that no panel review is requested. If a panel review is requested, the FDA’s decision could extend to the first half of 2028.
Previous wording
We had a net losses of $5.7 million and $3.9 million for the three months ended June 30, 2025 and 2024, respectively, and$10.7 million and $10.2 million for the six months ended June 30, 2025 and 2024, respectively, and had an accumulated deficit of $297.9 million and $284.7 million as of June 30, 2025 and December 31, 2024, respectively. We have funded our operations to date primarily through the issuance of equity securities, term debt and convertible debt. We expect to continue to incur net losses for the foreseeable future, and expect our research and development expenses, sales and marketing expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of the Acclaim CI and seek the necessary regulatory approvals for our product candidate, as well as hire additional personnel, pay fees to outside consultants, attorneys and accountants, and incur other increased costs associated with being a public company. In addition, if and when we seek and obtain regulatory approval to commercialize the Acclaim CI in the United States, we will also incur increased expenses in connection with commercialization and marketing of such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, if any, and our expenditures on other research and development activities. We anticipate that our expenses will increase significantly in connection with our ongoing activities, if and as we:
Current wording
We had a net loss of $6,482 and $5,960 for the three months ended September 30, 2025 and 2024, respectively, and $17,170 and $16,177 for the nine months ended September 30, 2025 and 2024, respectively, and had an accumulated deficit of $305,659 and $284,734 as of September 30, 2025 and December 31, 2024, respectively. We have funded our operations to date primarily through the issuance of equity securities and debt. We expect to continue to incur net losses for the foreseeable future, and expect our research and development expenses, sales and marketing expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of the Acclaim CI and seek the necessary regulatory approvals for our product candidate, as well as hire additional personnel, pay fees to outside consultants, attorneys and accountants, and incur other increased costs associated with being a public company. In addition, if and when we seek and obtain regulatory approval to commercialize the Acclaim CI in the United States, we will also incur increased expenses in connection with commercialization and marketing of such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, if any, and our expenditures on other research and development activities. We anticipate that our expenses will increase significantly in connection with our ongoing activities, if and as we:
Previous wording
Upon commercialization of our Acclaim CI product, we expect that Acclaim CI revenues will more than exceed our Esteem FI-AMEI revenue. We are targeting FDA approval on our PMA for the Acclaim CI in the second half of 2027 or first half of 2028, depending on the FDA’s review process and timeline.
Current wording
Upon commercialization of our Acclaim CI product, we expect that Acclaim CI revenues will more than exceed our Esteem FI-AMEI revenue. We are targeting FDA approval on our PMA application for the Acclaim CI in the second half of 2027 or first half of 2028, depending on the FDA's review process and timeline.
Previous wording
Our R&D expenses are currently tracked on a project basis. The majority of our R&D expenses incurred during the three and six months ended June 30, 2025 and 2024 were for the development of the Acclaim CI.
Current wording
Our R&D expenses are currently tracked on a project basis. The majority of our R&D expenses incurred during the three and nine months ended September 30, 2025 and 2024 were for the development of the Acclaim CI.
Previous wording
Interest expense, related party consists of accrued interest for the term loans held by a related party (the “Term Loans”), as well as amortization of the debt discount recorded as a result of the warrants issued with the Term Loans. Amortization of the debt discount is recorded over the respective terms of the Term Loans.
Current wording
Interest expense, related party consists of accrued interest for the term loans held by a related party (the “Term Loans”), as well as amortization of the debt discount recorded as a result of the warrants issued with the Term Loans. Amortization of the debt discount is recorded over the respective terms of the Term Loans. On August 25, 2025, the Term Loans were extinguished resulting in the Company no longer recognizing interest expense on the Term Loans.
Previous wording
Other expense for the three and six months ended June 30, 2025 and 2024 consists of interest incurred on insurance financing loans as well as interest income.
Current wording
Other expense for the three and nine months ended September 30, 2025 and 2024 consists of interest incurred on insurance financing loans as well as interest income.
Previous wording
Net revenues increased $10 thousand for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. Revenues were flat and not significant to the results of our operations.
Current wording
Net revenues decreased $14 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Revenues are not significant to the results of our operations.
Previous wording
Cost of goods sold decreased $11 thousand for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The decrease is due to reduction in Esteem FI-AMEI material waste during production offset by increases to the inventory reserve and supplier expenses.
Current wording
Cost of goods sold increased $16 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The change is due to an increase in Esteem FI-AMEI material waste during production offset by lower professional fees related to manufacturing personnel.
Previous wording
R&D expenses decreased $0.1 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. R&D product costs decreased $0.5 million from the prior period as we moved from the development phase into the clinical trials phase. Personnel costs and other R&D costs increased $0.3 million and $0.1 million, respectively, from the prior period to support the clinical trials with additional headcount and equipment, respectively.
Current wording
R&D expenses decreased $57 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. R&D product costs decreased $282 from the prior period as we moved from the development phase into the clinical trials phase. Personnel costs increased $282 from the prior period to support the clinical trials with additional headcount. Increases in other R&D costs were more than offset by lower professional services fees.
Previous wording
Sales and marketing expenses decreased $0.1 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The decrease is due to a reduction of legal and professional fees of $0.2 million associated with securing insurance reimbursement for the Esteem FI-AMEI product, partially offset by increased headcount and travel of less than $0.1 million.
Current wording
Sales and marketing expenses increased $11 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. A reduction of legal and professional fees of $112 associated with securing insurance reimbursement for the Esteem FI-AMEI product, was almost entirely offset by increased headcount-related expenses of $100.
Previous wording
The loss from the change in the fair value of the publicly traded warrant liability was $32 thousand for the three months ended June 30, 2025 compared to a gain of $0.8 million for the three months ended June 30, 2024. This fluctuation is due to an increase in the Company’s closing price for those warrants during the 2025 period as compared to the 2024 period.
Current wording
The loss from the change in the fair value of the publicly traded warrant liability was $33 for the three months ended September 30, 2025 compared to a loss of $426 for the three months ended September 30, 2024. This fluctuation is due to a larger increase in the Company’s closing price for those warrants during the 2024 period as compared to the 2025 period.
Previous wording
Interest expense, related party increased $0.5 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase is due to additional issuances of Term Loans between the two periods.
Current wording
Interest expense, related party increased $207 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase is due to additional issuances of Term Loans between the two periods. On August 25, 2025, the Term Loans were settled and accordingly, interest expense is no longer recognized.
Previous wording
Net revenues decreased $3 thousand for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Revenues were flat and not significant to the results of our operations.
Current wording
Net revenues decreased $17 for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Revenues are not significant to the results of our operations.
Previous wording
The following table summarizes the components of our R&D expenses for the six months ended June 30, 2025 and 2024:
Current wording
The following table summarizes the components of our R&D expenses for the nine months ended September 30, 2025 and 2024:
Previous wording
R&D expenses increased $0.3 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. R&D product costs decreased $0.3 million from the prior period as we moved from the development phase into the clinical trials phase. Personnel costs and other R&D costs increased $0.5 million and $0.2 million, respectively, from the prior period to support the clinical trials with increased headcount and equipment, respectively.
Current wording
R&D expenses increased $225 for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. R&D product costs decreased $315 from the prior period as we moved from the development phase into the clinical trials phase. R&D personnel costs and other R&D costs increased $211 and $329, respectively, from the prior period to support the clinical trials with increased headcount and equipment, respectively.
Previous wording
Sales and marketing expenses decreased $0.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The decrease is primarily due to a reduction of legal and professional fees of $0.3 million associated with securing insurance reimbursement for the Esteem FI-AMEI product, partially offset by increased headcount and travel of $0.1 million.
Current wording
Sales and marketing expenses decreased $92 for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease is primarily due to a reduction of legal fees of $425 associated with securing insurance reimbursement for the Esteem FI-AMEI product, partially offset by increased headcount related expenses of $219 and other professional services of $100.
Previous wording
General and administrative expenses increased $0.5 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase is primarily due to a $0.3 million severance accrual for the former CFO for the three months ended June 30, 2025.
Current wording
General and administrative expenses increased $950 for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase is primarily due to expenses directly related to the September 2025 Offering of $444, a $315 severance accrual for the former chief financial officer as well as increased costs for consultants for the nine months ended September 30, 2025.
Previous wording
The change in the fair value of the forward purchase agreement put option liability was zero for the six months ended June 30, 2025 compared to a gain of $0.1 million for the six months ended June 30, 2024. During the first quarter of 2024, the shares associated with the forward purchase agreement put option were sold.
Current wording
The change in the fair value of the forward purchase agreement put option liability was zero for the nine months ended September 30, 2025 compared to a gain of $103 for the nine months ended September 30, 2024. During the first quarter of 2024, the shares associated with the forward purchase agreement put option were sold.
Previous wording
The gain from the change in the fair value of the forward purchase agreement warrant liability was $0.5 million for the six months ended June 30, 2025 compared to a loss of $18 thousand for the six months ended June 30, 2024. The $0.5 million increase is primarily due to the decrease in stock price.
Current wording
The gain from the change in the fair value of the forward purchase agreement warrant liability was $522 for the nine months ended September 30, 2025 compared to a loss of $329 for the nine months ended September 30, 2024. The change is primarily due to the decrease in stock price.
Previous wording
The gain from the change in the fair value of the publicly traded warrant liability was $0.2 million for the six months ended June 30, 2025 compared to a loss of $0.4 million for the six months ended June 30, 2024. The fluctuation is due to a decrease in the Company’s closing price for those warrants during the 2025 period compared to the 2024 period.
Current wording
The gain from the change in the fair value of the publicly traded warrant liability was $129 for the nine months ended September 30, 2025 compared to a loss of $802 for the nine months ended September 30, 2024. The fluctuation is due to a decrease in the Company’s closing price for those warrants during the 2025 period compared to an increase for the 2024 period.
Previous wording
Interest expense, related party increased $1.0 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase is due to additional issuances of Term Loans between the two periods.
Current wording
Interest expense, related party increased $1,158 for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase is due to additional issuances of Term Loans between the two periods. On August 25, 2025, the Term Loans were settled and accordingly, interest expense is no longer recognized.
Previous wording
Other expense decreased by $7 thousand for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, due to a reduction in interest incurred on insurance financing loans.
Current wording
Other expense decreased by $3 for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, due to a reduction in interest incurred on insurance financing loans.
Previous wording
Since inception, we have incurred significant operating losses. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our products and fund the process of clinical FDA trials. We have funded our operations to date primarily with proceeds from issuing equity securities, term loans, convertible notes and proceeds from the Business Combination. As of June 30, 2025 and December 31, 2024, we had $5.3 million and $5.5 million of cash, respectively.
Current wording
Since inception, we have incurred significant operating losses. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our products and fund the process of clinical FDA trials. We have funded our operations to date primarily with proceeds from issuing equity securities, term loans, convertible notes and proceeds from the Business Combination. As of September 30, 2025 and December 31, 2024, we had $3,556 and $5,483 of cash, respectively.
Previous wording
We proactively manage our access to capital to support liquidity and continued growth. Our sources of capital include issuances of our Common Stock, Series A preferred stock (“Preferred Stock”), warrants, convertible debt, term debt and other financing agreements such as the Forward Purchase Agreement, and proceeds from the sales of the Esteem FI-AMEI implants and replacement components. See Note 1, “Nature of the Business and Basis of Presentation”, of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report.
Current wording
We proactively manage our access to capital to support liquidity and continued growth. Our sources of capital include issuances of our Common Stock, Series A Preferred Stock, warrants, convertible debt, term debt and other financing agreements such as the Forward Purchase Agreement, and proceeds from the sales of the Esteem FI-AMEI implants and replacement components. See Note 1, “Nature of the Business and Basis of Presentation”, of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report.
Previous wording
We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us. Based on our cash position as of June 30, 2025, assuming there is no additional funding through the Forward Purchase Agreement or ATM, we expect to have sufficient funds for our operations through September 2025. Proceeds from the Forward Purchase Agreement or ATM, which we expect, will provide us with funding beyond September 2025. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing sooner than currently projected, which may not be available to us on acceptable terms, or at all. If we are unable to raise sufficient financing when needed or events or circumstances occur such that we do not meet our strategic plans, we may be required to reduce certain discretionary spending, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures, which could have a material adverse effect on our financial position, results of operations, cash flows, and ability to achieve our intended business objectives. These matters raise substantial doubt about our ability to continue as a going concern. To the extent that we raise additional capital through additional collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our Acclaim CI, future revenue streams, research programs or to grant licenses on terms that may not be favorable to us. If we do raise additional capital through public or private equity or convertible debt offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.
Current wording
We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us. Based on our cash position as of September 30, 2025, the $4,000 of gross proceeds from the October 2025 Offering, the $2,954 of proceeds from the Shortfall Warrants as discussed in Note 15, “Subsequent Events” of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report, and assuming there is no additional funding through the exercise of any outstanding warrants, we expect to have sufficient funds for our operations through February or March 2026. Proceeds from the exercise of any outstanding warrants or other sources, which we expect, will provide us with funding beyond this timeframe. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing sooner than currently projected, which may not be available to us on acceptable terms, or at all. If we are unable to raise sufficient financing when needed or events or circumstances occur such that we do not meet our strategic plans, we may be required to reduce certain discretionary spending, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures, which could have a material adverse effect on our financial position, results of operations, cash flows, and ability to achieve our intended business objectives. These matters raise substantial doubt about our ability to continue as a going concern. To the extent that we raise additional capital through additional collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our Acclaim CI, future revenue streams, research programs or to grant licenses on terms that may not be favorable to us. If we do raise additional capital through public or private equity or convertible debt offerings, the ownership interest of our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.
Previous wording
The following table presents a summary of our cash flow for the periods indicated (in thousands):
Current wording
The following table presents a summary of our cash flow for the periods indicated:
Previous wording
Net cash used in operating activities for the six months ended June 30, 2025 was primarily used to fund a net loss of $10.7 million and $1.0 million of cash inflows from net changes in the levels of operating assets and liabilities, adjusted for non-cash expenses in an aggregate amount of $1.5 million.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2025 was primarily used to fund a net loss of $17,170 and $1,761 of cash inflows from net changes in the levels of operating assets and liabilities, adjusted for non-cash expenses in an aggregate amount of $2,893.
Previous wording
The $1.0 million of cash inflows from net changes in the levels of operating assets and liabilities was primarily due to a decrease of $0.8 million in other receivable due to the receipt of an income tax refund, an increase to a severance accrual of $0.3 million, as well as other typical fluctuations resulting from timing of cash receipts and disbursements within operating accounts. We will continue to evaluate our capital requirements for both short-term and long-term liquidity needs, which could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in the section of this Report titled “Risk Factors.”
Current wording
The $1,761 of cash inflows from net changes in the levels of operating assets and liabilities was primarily due to a decrease of $761 in other receivable due to the receipt of an income tax refund, an increase to a severance accrual of $315 paid out over a 12-month period, as well as other typical fluctuations resulting from timing of cash receipts and disbursements within operating accounts. We will continue to evaluate our capital requirements for both short-term and long-term liquidity needs, which could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in the section of this Report titled “Risk Factors.”
Previous wording
Net cash used in investing activities for the six months ended June 30, 2025 was $7 thousand and consisted of purchases of computer equipment.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2025 was $7 and consisted of purchases of computer equipment.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2024 was $0.9 million and consisted of purchases of property and equipment, and deposits on equipment not yet placed in service.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 was $1,514 and consisted of purchases of property and equipment, specifically equipment used in the production of finished goods.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2025 was $8.0 million and was primarily a result of proceeds from the issuance of Term Loans in the amount of $10.0 million, proceeds from the ATM of $0.2 million, and from the employee stock purchase plan of less than $0.1 million, partially offset by dividends paid to preferred stockholders in the amount of $1.8 million and payments made on insurance financing loans of $0.5 million.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2025 was $10,593 and was a result of proceeds from the issuance of Term Loans in the amount of $10,000, proceeds from the September 2025 Offering in the amount of $2,500, and proceeds from the ATM equity offering program and Shortfall Warrants (both as defined in Note 9 of the unaudited condensed consolidated financial statements) in the amount of $572, partially offset by dividends paid to preferred stockholders in the amount of $1,820, payments made on insurance financing loans of $636, and $100 of costs related to extinguishing the Term Loans.
Previous wording
Our principal commitments consist of our operating leases for office space, a litigation matter arising from the Company’s Business Combination, and Term Loans with GAT Funding, LLC in several installments totaling $30.0 million in outstanding principal (gross before discount for the fair value of the warrants of $2.7 million) as of June 30, 2025. Information on our open litigation matter is included in Note 13, “Commitments and Contingencies”, and details on the Term Loans are described in Note 8, “Debt (Related Party)” of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report.
Current wording
Our principal commitments consist of our operating leases for office space and a litigation matter arising from the Company’s Business Combination. Information on our open litigation matter is included in Note 13, “Commitments and Contingencies” of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report.
Previous wording
Our related party arrangements consist of receiving term loan financings, leasing our headquarters office space, and contracting for IT services from a stockholder. For further information on the related party arrangements, refer to Note 8, “Debt (Related Party)” and Note 12, “Related Party Transactions”, of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report.
Current wording
Our related party arrangements consist of receiving term loan financings, leasing our headquarters office space, contracting for IT services from a stockholder, and a contract with an executive officer. For further information on the related party arrangements, refer to Note 8*,* “Debt (Related Party)” and Note 12, “Related Party Transactions”, of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report.
Previous wording
We will incur substantial expenses associated with prototyping, improvements, testing and clinical trials. Accounting for clinical trials relating to activities performed by external vendors requires us to exercise significant estimates regarding the timing and accounting for these expenses. We estimate costs of R&D activities conducted by service providers, which include the conduct of sponsored research and contract manufacturing activities. The diverse nature of services being provided for our clinical trials and other arrangements, the different compensation arrangements that exist for each type of service and the lack of timely information related to certain clinical activities complicates the estimation of accruals for services rendered by third parties in connection with clinical trials. We record the estimated costs of R&D activities based upon the estimated amount of services provided but not yet invoiced and include these costs in accrued expenses or prepaid expenses on the consolidated balance sheets and within R&D expense on the consolidated statements of operations and comprehensive loss. In estimating the duration of a clinical study, we evaluate the start-up, treatment and wrap-up periods, compensation arrangements and services rendered attributable to each clinical trial and fluctuations are regularly tested against payment plans and trial completion assumptions.
Current wording
We will incur substantial expenses associated with prototyping, improvements, testing and clinical trials. Accounting for clinical trials relating to activities performed by external vendors requires us to exercise significant estimates regarding the timing and accounting for these expenses. We estimate costs of R&D activities conducted by service providers, which include the conduct of sponsored research and contract manufacturing activities. The diverse nature of services being provided for our clinical trials and other arrangements, the different compensation arrangements that exist for each type of service and the lack of timely information related to certain clinical activities complicates the estimation of accruals for services rendered by third parties in connection with clinical trials. We record the estimated costs of R&D activities based upon the estimated amount of services provided but not yet invoiced and include these costs in accrued expenses or prepaid expenses on the unaudited condensed consolidated balance sheets and within R&D expense on the unaudited condensed consolidated statements of operations and comprehensive loss. In estimating the duration of a clinical study, we evaluate the start-up, treatment and wrap-up periods, compensation arrangements and services rendered attributable to each clinical trial and fluctuations are regularly tested against payment plans and trial completion assumptions.
Previous wording
During 2013, we offered a lifetime warranty to clinical trial patients to cover Battery and surgery related costs. We estimate the costs that may be incurred under this lifetime warranty and record a liability in the amount of such costs at its present value. The assumptions utilized in developing the liability include an estimated cost per unit of $6 thousand, an average Battery life of five years, inflationary increases, discount rate, and an average patient life calculated on probabilities outlined in the PRI-2012 mortality tables, published from the Society of Actuaries.
Current wording
During 2013, we offered a lifetime warranty to clinical trial patients to cover Battery and surgery related costs. We estimate the costs that may be incurred under this lifetime warranty and record a liability in the amount of such costs at its present value. The assumptions utilized in developing the liability include an estimated cost per unit of $6, an average Battery life of five years, inflationary increases, discount rate, and an average patient life calculated on probabilities outlined in the PRI-2012 mortality tables, published from the Society of Actuaries.
Previous wording
Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or no not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public and private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard, until such time we are no longer considered to be an emerging growth company. At times, we may elect to early adopt a new or revised standard.
Current wording
Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public and private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard, until such time we are no longer considered to be an emerging growth company. At times, we may elect to early adopt a new or revised standard.