Envoy Medical, Inc.

Previous wording

The following analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes included elsewhere in this Quarterly Report on Form 10-Q (this “Report”), as well as the information contained in the Company’s Annual Report on Form 10-K, dated and filed with the Securities and Exchange Commission (the “SEC”) on March 23, 2026 (the “Form 10-K”), which is accessible on the SEC’s website at www.sec.gov. Unless otherwise indicated or the context otherwise requires, references in this section to the “Company,” “Envoy Medical,” “we,” “us,” “our” and other similar terms refer (i) prior to the Closing Date, to Envoy Medical Corporation and (ii) after the Closing Date, to Envoy Medical, Inc.

Current wording

The following analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes included elsewhere in this Quarterly Report on Form 10-Q (this “Report”), as well as the information contained in the Company’s Annual Report on Form 10-K, dated and filed with the Securities and Exchange Commission (the “SEC”) on March 23, 2026 (the “Form 10-K”), which is accessible on the SEC’s website at www.sec.gov. Unless otherwise indicated or the context otherwise requires, references in this section to the “Company,” “Envoy Medical,” “we,” “us,” “our” and other similar terms refer to Envoy Medical, Inc.

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 March 31, 2026 and December 31, 2025, and the three months ended March 31, 2026 and 2025, 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, 2025 and 2024, 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 June 30, 2026 and December 31, 2025, and the three and six months ended June 30, 2026 and 2025, 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, 2025 and 2024, 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

We are a hearing health company focused on development of fully implanted hearing solutions and providing innovative medical technologies across the hearing loss spectrum. Our technologies are designed to shift the paradigm within the hearing industry and bring both providers and patients the hearing devices they desire. We are dedicated to pushing beyond the status quo to provide patients with improved access, usability, independence, and quality of life. We believe leveraging the ear’s natural anatomy, rather than the external or sub-dermal artificial microphone, is the ideal way for people to hear. In recent years, we have focused almost exclusively on developing the fully implanted Acclaim® cochlear implant (the “Acclaim CI”), our lead product candidate.

Current wording

We are a hearing health company focused on development of fully implanted hearing solutions and providing innovative medical technologies across the hearing loss spectrum. Our technologies are designed to shift the paradigm within the hearing industry and bring both providers and patients the hearing devices they desire. We are dedicated to pushing beyond the status quo to provide patients with improved access, usability, independence, and quality of life. We believe leveraging the ear’s natural anatomy, rather than an external or sub-dermal artificial microphone, is the ideal way for people to hear. In recent years, we have focused almost exclusively on developing the fully implanted Acclaim® cochlear implant (the “Acclaim CI”), our lead product candidate.

Previous wording

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 completed enrollment of all 56 patients on March 10, 2025 and all 56 patients have been through activation visits, when a patient’s device is initially turned on for the first time.

Current wording

The IDE was approved as a “staged” clinical trial. The first stage allowed for enrollment of 10 study participants (“First Stage”) prior to us having to formally request FDA approval to expand enrollment to the full subject cohort of 56 patients (“Second Stage”). Once the First Stage completed their 3-month follow-up visits, we submitted this preliminary clinical data to justify study expansion into the second and final stage. The FDA agreed that this data adequately characterized device effectiveness and our expansion request to the FDA was formally approved by the FDA on October 3, 2025. We completed enrollment of all 56 patients on March 10, 2025 and all 56 patients completed their activation visits, when a patient’s device is initially turned on for the first time, by April 16, 2026. On July, 21, 2026, we announced that all 56 patients enrolled in the clinical trial have surpassed the 3-month milestone.

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. As of March 31, 2026, the first three pivotal trial patients implanted at the start of 2025 have reached the 12-month follow-up evaluation point.

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, we intend to submit a Premarket Approval (“PMA”) application to the FDA. As of June 30, 2026, the first 10 pivotal trial patients implanted at the start of 2025 have reached the 12-month follow-up evaluation point. We expect all Stage 2 participants to complete their 12-month data collection by early Q2 2027, with a PMA submission to the FDA planned to follow a few months thereafter.

Previous wording

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.

Current wording

The FDA will have at least 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, we currently anticipate 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 loss of $4,351 and $4,998 for the three months ended March 31, 2026 and 2025, respectively, and had an accumulated deficit of $319,097 and $313,396 as of March 31, 2026 and December 31, 2025, 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:

Current wording

We had net losses of $5,982 and $5,690 for the three months ended June 30, 2026 and 2025, respectively, $10,333 and $10,688 for the six months ended June 2026 and 2025, respectively, and had an accumulated deficit of $326,369 and $313,396 as of June 30, 2026 and December 31, 2025, 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 the clinical trial forthe Acclaim CI and seek the necessary regulatory approvals for our product candidate. 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

Our R&D expenses are currently tracked on a project basis. The majority of our R&D expenses incurred during the three months ended March 31, 2026 and 2025 were for the development of the Acclaim CI, including expenses for clinical trial activities and patient enrollment for the Acclaim CI pivotal clinical trial.

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 six months ended June 30, 2026 and 2025 were for the development of the Acclaim CI, including expenses for clinical trial activities and patient enrollment for the Acclaim CI pivotal clinical trial.

Previous wording

Other income (expense), net consists of interest incurred on insurance financing loans as well as interest income and other expenses.

Current wording

Other income (expense), net consists of interest income as well interest incurred on insurance financing loans as and other expenses.

Previous wording

Net revenues decreased $7 for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Revenues are not significant to the results of our operations.

Current wording

Net revenues decreased by $27 for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Revenue was not significant to our results of operations.

Previous wording

Cost of goods sold increased $87 for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase is due primarily to an increase in scrap and materials usage of $56 and fees to third-parties performing work related to our products of $35.

Current wording

Cost of goods sold increased by $44 for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily attributable to higher fees paid to third parties performing work related to our products of $60 and increased scrap and materials usage of $19, partially offset by decreases in other product-related costs.

Previous wording

Sales and marketing expenses decreased $194 for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease is primarily due to the reallocation of our field clinical engineers to research and development activities in support of the clinical trial during the three months ended March 31, 2026 compared to their involvement in broader business development activities in the prior period. For the three months ended March 31, 2025, we incurred $147 of sales and marketing expenses related to these employees, who no longer support sales and marketing activities.

Current wording

Sales and marketing expenses decreased by $180 for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The decrease was primarily attributable to the reallocation of field clinical engineers to research and development activities in support of the clinical trial. During the three months ended June 30, 2025, we incurred $188 of sales and marketing expenses related to these employees, who no longer support sales and marketing activities.

Previous wording

The gain from the change in fair value of the private warrant liability was $2,005 for the three months ended March 31, 2026 as a result of the remeasurement of the Investor Warrants (as defined in Note 9 of the unaudited condensed consolidated financial statements issued on September 23, 2025 and October 9, 2025. The change primarily reflects updates to valuation assumptions, including the effect of the shorter remaining term.

Current wording

The loss from the change in fair value of the private warrant liability was $838 for the three months ended June 30, 2026. The loss resulted from the remeasurement of the Investor Warrants (as defined in Note 9 to the unaudited condensed consolidated financial statements), which were issued on September 23, 2025 and October 9, 2025. No Investor Warrants were outstanding during the three months ended June 30, 2025.

Previous wording

Other income (expense), net increased by $17 for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase is due to higher interest income for the three months ended March 31, 2026 compared to the prior period.

Current wording

Other income (expense), net increased by $167 for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to higher interest income.

Previous wording

The loss from the change in the fair value of the publicly traded warrant liability was $390 for the three months ended March 31, 2026 compared to a gain of $194 for the three months ended March 31, 2025. The fluctuation is due to an increase in the stock price for those warrants during the 2026 period compared to a decrease for the 2025 period.

Current wording

The loss from the change in the fair value of the publicly traded warrant liability was $154 for the six months ended June 30, 2026 compared to a gain of $162 for the six months ended June 30, 2025. The change was attributable to an increase in the publicly traded warrants price during the 2026 period, compared to a decrease during the 2025 period.

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 March 31, 2026 and December 31, 2025 we had $25,251 and $3,739 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 a 2023 business combination. As of June 30, 2026 and December 31, 2025 we had $19,679 and $3,739 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 Class A 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.

Current wording

We proactively manage our access to capital to support liquidity and continued growth. Our sources of capital include issuances of our Class A 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.

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 March 31, 2026, and assuming there is no additional funding through the exercise of any outstanding warrants and no material change to our operating expenses, we expect to have sufficient funds for our operations into the second quarter of 2027. 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.

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 June 30, 2026, and assuming there is no additional funding through the exercise of any outstanding warrants and no material change to our operating expenses, we expect to have sufficient funds for our operations through the first quarter of 2027. Proceeds from the exercise of any outstanding warrants or other sources 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 $758 of cash outflows from net changes in the levels of operating assets and liabilities was primarily due to a decrease of $1,220 in accounts payable. This was partially offset by an increase in accrued expenses of $664, primarily related to the clinical trial, 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 our Form 10-K detailed in the section titled “Risk Factors.”

Current wording

The $1,437 of cash outflows from net changes in the levels of operating assets and liabilities was primarily due to a decrease of $912 in accounts payable and a decrease in accrued expenses of $247, primarily related to the clinical trial, as well as other changes in operating assets and liabilities resulting from the timing of cash receipts and disbursements. 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 our Form 10-K detailed in the section titled “Risk Factors.”

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was $6 and consisted of purchases of computer equipment.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 was $6 and consisted of purchases of production equipment.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $27,574 and was a result of net proceeds from the issuance of February 2026 Offering (as defined in Note 9 of the unaudited condensed consolidated financial statements) of $27,782, partially offset by payments made on insurance financing loans of $208.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2026 was $27,465 and was primarily due to net proceeds of $27,782 from the issuance of securities in the February 2026 Offering (as defined in Note 9 of the unaudited condensed consolidated financial statements), partially offset by payments made on insurance financing loans of $421.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $3,554 and was a result of proceeds from the issuance of Term Loans in the amount of $5,000, partially offset by dividends paid to preferred stockholders in the amount of $1,213 and payments made on insurance financing loans of $233.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 was $7,992 and was primarily due to proceeds from the issuance of Term Loans in the amount of $10,000, proceeds from the ATM of $204 (as defined in Note 9 of the unaudited condensed consolidated financial statements), and proceeds from the employee stock purchase plan of $77, partially offset by dividends paid to preferred stockholders in the amount of $1,820 and payments made on insurance financing loans of $469.

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 Interest Expense (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 historically consist of receiving term loan financings which have been extinguished, 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 Interest Expense (Related Party)” and Note 13, “Related Party Transactions”, of the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report.