Envoy Medical(COCH) - 2025 Q1 - Quarterly Results

First Quarter 2025 Highlights and Business Overview Envoy Medical reported positive Q1 2025 clinical study progress for its Acclaim CI and detailed its fully implanted hearing device portfolio Company Overview and CEO Commentary Envoy Medical, a hearing health company focused on fully implanted hearing devices, announced its Q1 2025 corporate and financial results - Envoy Medical (Nasdaq: COCH) is a revolutionary hearing health company focused on fully implanted hearing devices[2] - CEO Brent Lucas reported positive progress in the pivotal clinical study for the fully implanted Acclaim cochlear implant, noting quick and efficient enrollment of the first 10 patients and excitement from investigational sites[4] - The company believes a meaningful percentage of cochlear implant candidates will be drawn to a fully implanted solution that uses the ear to pick up sound, does not have an implanted magnet, and offers multiple days of battery life[4] Corporate and Clinical Study Highlights Envoy Medical secured an additional $10 million in funding to advance its pivotal clinical trial for the Acclaim cochlear implant - Secured additional $10 Million in funding to advance the Pivotal Clinical Trial[6] - Completed Enrollment of 10 participants in the 'first stage' of the Pivotal Clinical Trial of the fully implanted Acclaim cochlear implant[6] - Activated six of 10 participants, with the remaining four due to be activated in May; two participants completed 1-Month Follow-Up visits[6] - No reports of Serious Adverse Events or Unanticipated Adverse Device Effects[6] - Modifications and mitigations put in place between the Early Feasibility Study and Pivotal Clinical Trial appear to address previously discussed electrical system noise[6] Product Portfolio Envoy Medical's product portfolio includes the fully implanted Acclaim Cochlear Implant (Acclaim CI) and the FDA-approved Esteem Fully Implanted Active Middle Ear Implant (FI-AMEI) - The fully implanted Acclaim Cochlear Implant (Acclaim CI) is a first-of-its-kind hearing device designed to leverage the natural anatomy of the ear to capture sound[10] - The Acclaim CI is designed to address severe to profound sensorineural hearing loss and received Breakthrough Device Designation from the U.S. FDA in 2019; it is currently an investigational device[11][12] - The Esteem fully implanted active middle ear implant (FI-AMEI) is the only FDA-approved, fully implanted hearing device for adults with moderate to severe sensorineural hearing loss, providing 24/7 invisible hearing without external components[12] First Quarter 2025 Financial Results Q1 2025 saw decreased net revenues, increased operating expenses, a widened stockholders' deficit, and improved operating cash flow Summary of Financial Performance Envoy Medical reported a slight decrease in net revenues for Q1 2025, primarily due to supply chain limitations affecting battery replacement sales - Net revenues decreased by $13 thousand for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a decrease in Battery replacement sales from supply chain limitations[5] - Cost of goods sold increased by $73 thousand, mainly due to increased headcount for Esteem FI-AMEI production, new supplier expenses, and an inventory reserve adjustment[5] - R&D expenses increased by $400 thousand, driven by increased headcount and contractors in engineering and clinical departments for the Acclaim CI pivotal clinical study, including site start-up costs[7] - Sales and marketing expenses increased by $33 thousand due to increased headcount, travel, and a patient engagement program, partially offset by reduced legal and professional fees[8] - General and administrative expenses decreased by $284 thousand, primarily due to reduced legal fees and professional service costs[9] - Cash and cash equivalents were approximately $5.3 million as of March 31, 2025[9] Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets ($ in thousands) | Metric | March 31, 2025 (Unaudited) | December 31, 2024 | | :---------------------------------- | :------------------------- | :------------------ | | Cash | $5,312 | $5,483 | | Total current assets | $8,312 | $9,384 | | Total assets | $10,385 | $11,538 | | Total current liabilities | $7,595 | $7,538 | | Term loans payable (related party) | $23,106 | $18,716 | | Total liabilities | $34,609 | $30,380 | | Total stockholders' deficit | $(24,224) | $(18,842) | Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Operations and Comprehensive Loss ($ in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net revenues | $46 | $59 | | Cost of goods sold | $226 | $153 | | Research and development | $2,748 | $2,360 | | Sales and marketing | $358 | $325 | | General and administrative | $1,821 | $2,105 | | Total costs and operating expenses | $5,153 | $4,943 | | Operating loss | $(5,107) | $(4,884) | | Change in fair value of publicly traded warrant liability | $194 | $(1,177) | | Net loss | $(4,998) | $(6,270) | | Net loss per share attributable to common stockholders, basic and diluted | $(0.29) | $(0.41) | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows ($ in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(3,725) | $(5,589) | | Net cash used in investing activities | $(6) | $(109) | | Net cash provided by financing activities | $3,554 | $6,426 | | Net (decrease) increase in cash | $(171) | $727 | | Cash, end of period | $5,312 | $4,945 | - Key financing activities included $5,000 thousand in proceeds from term loans (related party) in both 2025 and 2024, and $1,213 thousand in dividends paid to Series A Preferred Stockholders in 2025[24] Additional Information This section includes forward-looking statement disclaimers and contact information for investor and media relations Forward-Looking Statements This section provides a standard disclaimer regarding forward-looking statements, indicating they are subject to numerous known and unknown risks, uncertainties, and assumptions - The press release includes 'forward-looking statements' as defined by the United States Private Securities Litigation Reform Act of 1995[17] - These statements are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly[17] - Envoy Medical disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes, except as required by applicable law[17] Investor and Media Contacts This section provides contact information for investor relations and media inquiries - Investor Relations contact: InvestorRelations@envoymedical.com[18] - Media Contact: Media@envoymedical.com[18]