Eargo (EAR) 10-Q 7 Nov 22 2022 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 02, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Registrant Name	Eargo, Inc.
Entity Central Index Key	0001719395
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		39,411,069
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	EAR
Security Exchange Name	NASDAQ
Entity File Number	001-39616
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-3879804
Entity Address, Address Line One	2665 North First Street
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95134
City Area Code	650
Local Phone Number	351-7700
Document Quarterly Report	true
Document Transition Report	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 88,075	$ 110,500
Accounts receivable, net	1,156	12,547
Inventories	4,953	5,712
Prepaid expenses and other current assets	5,058	10,873
Total current assets	99,242	139,632
Operating lease right-of-use assets	6,337	7,165
Property and equipment, net	8,691	9,551
Intangible assets, net	1,217	1,681
Goodwill	873	873
Other assets	210	1,209
Total assets	116,570	160,111
Current liabilities:
Accounts payable	6,396	9,053
Accrued expenses	10,966	9,235
Sales returns reserve	1,790	13,827
Settlement liability		34,372
Convertible notes	125,000
Long-term debt, current portion		3,333
Other current liabilities	1,902	1,813
Lease liability, current portion	665	750
Total current liabilities	146,719	72,383
Lease liability, noncurrent portion	6,175	6,640
Long-term debt, noncurrent portion		11,924
Total liabilities	152,894	90,947
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized as of September 30, 2022 and December 31, 2021, respectively; zero shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
Common stock; $0.0001 par value; 300,000,000 and 110,000,000 shares authorized as of September 30, 2022 and December 31, 2021, respectively; 39,411,069 and 39,307,093 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	4	4
Additional paid-in capital	434,200	425,972
Accumulated deficit	(470,528)	(356,812)
Total stockholders' equity (deficit)	(36,324)	69,164
Total liabilities and stockholders' equity (deficit)	$ 116,570	$ 160,111

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	110,000,000
Common stock, shares issued	39,411,069	39,307,093
Common stock, shares outstanding	39,411,069	39,307,093

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenue, net	$ 7,908	$ (22,869)	$ 24,331	$ 22,062
Cost of revenue	6,007	7,552	16,231	20,311
Gross profit (loss)	1,901	(30,421)	8,100	1,751
Operating expenses:
Research and development	4,963	7,296	14,689	17,222
Sales and marketing	11,282	24,444	37,306	63,202
General and administrative	11,702	16,887	43,980	32,806
Total operating expenses	27,947	48,627	95,975	113,230
Loss from operations	(26,046)	(79,048)	(87,875)	(111,479)
Other income (expense), net:
Interest income	419	2	480	19
Interest expense		(269)	(549)	(798)
Change in fair value of convertible notes	(25,000)		(25,000)
Loss on extinguishment of debt			(772)
Total other income (expense), net	(24,581)	(267)	(25,841)	(779)
Loss before income taxes	(50,627)	(79,315)	(113,716)	(112,258)
Net loss and comprehensive loss	(50,627)	(79,315)	(113,716)	(112,258)
Net loss attributable to common stockholders, basic and diluted	$ (50,627)	$ (79,315)	$ (113,716)	$ (112,258)
Net loss per share attributable to common stockholders, basic	$ (1.29)	$ (2.02)	$ (2.89)	$ (2.90)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic	39,397,347	39,195,211	39,361,948	38,765,151
Net loss per share attributable to common stockholders, diluted	$ (1.29)	$ (2.02)	$ (2.89)	$ (2.90)
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted	39,397,347	39,195,211	39,361,948	38,765,151

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning balance at Dec. 31, 2020	$ 193,911	$ 4	$ 392,965	$ (199,058)
Beginning balance, Shares at Dec. 31, 2020		38,246,601
Stock-based compensation	5,449		5,449
Exercise of stock options	118		118
Exercise of stock options, Shares		51,467
Net loss and comprehensive loss	(13,621)			(13,621)
Ending balance at Mar. 31, 2021	185,857	$ 4	398,532	(212,679)
Ending balance, Shares at Mar. 31, 2021		38,298,068
Beginning balance at Dec. 31, 2020	193,911	$ 4	392,965	(199,058)
Beginning balance, Shares at Dec. 31, 2020		38,246,601
Net loss and comprehensive loss	(112,258)
Ending balance at Sep. 30, 2021	102,577	$ 4	413,889	(311,316)
Ending balance, Shares at Sep. 30, 2021		39,270,448
Beginning balance at Mar. 31, 2021	185,857	$ 4	398,532	(212,679)
Beginning balance, Shares at Mar. 31, 2021		38,298,068
Stock-based compensation	5,519		5,519
Exercise of stock options	1,181		1,181
Exercise of stock options, Shares		668,760
Issuance of common stock in connection with employee stock purchase plan	2,674		2,674
Issuance of common stock in connection with employee stock purchase plan, Shares		174,743
Net loss and comprehensive loss	(19,322)			(19,322)
Ending balance at Jun. 30, 2021	175,909	$ 4	407,906	(232,001)
Ending balance, Shares at Jun. 30, 2021		39,141,571
Stock-based compensation	5,630		5,630
Exercise of stock options and release of restricted stock units	353		353
Exercise of stock options and release of restricted stock units, Shares		128,877
Net loss and comprehensive loss	(79,315)			(79,315)
Ending balance at Sep. 30, 2021	102,577	$ 4	413,889	(311,316)
Ending balance, Shares at Sep. 30, 2021		39,270,448
Beginning balance at Dec. 31, 2021	69,164	$ 4	425,972	(356,812)
Beginning balance, Shares at Dec. 31, 2021		39,307,093
Stock-based compensation	3,024		3,024
Exercise of stock options	92		92
Exercise of stock options, Shares		37,425
Restricted stock units cash settlement	(69)		(69)
Net loss and comprehensive loss	(30,645)			(30,645)
Ending balance at Mar. 31, 2022	41,566	$ 4	429,019	(387,457)
Ending balance, Shares at Mar. 31, 2022		39,344,518
Beginning balance at Dec. 31, 2021	$ 69,164	$ 4	425,972	(356,812)
Beginning balance, Shares at Dec. 31, 2021		39,307,093
Exercise of stock options, Shares	57,946
Net loss and comprehensive loss	$ (113,716)
Ending balance at Sep. 30, 2022	(36,324)	$ 4	434,200	(470,528)
Ending balance, Shares at Sep. 30, 2022		39,411,069
Beginning balance at Mar. 31, 2022	41,566	$ 4	429,019	(387,457)
Beginning balance, Shares at Mar. 31, 2022		39,344,518
Stock-based compensation	1,511		1,511
Exercise of stock options and release of restricted stock units	33		33
Exercise of stock options and release of restricted stock units, Shares		40,920
Tax withholdings on settlement of restricted stock units	(22)		(22)
Issuance costs	600		600
Net loss and comprehensive loss	(32,444)			(32,444)
Ending balance at Jun. 30, 2022	11,244	$ 4	431,141	(419,901)
Ending balance, Shares at Jun. 30, 2022		39,385,438
Stock-based compensation	3,057		3,057
Exercise of stock options and release of restricted stock units	9		9
Exercise of stock options and release of restricted stock units, Shares		25,631
Tax withholdings on settlement of restricted stock units	(7)		(7)
Net loss and comprehensive loss	(50,627)			(50,627)
Ending balance at Sep. 30, 2022	$ (36,324)	$ 4	$ 434,200	$ (470,528)
Ending balance, Shares at Sep. 30, 2022		39,411,069

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating activities:
Net loss	$ (113,716)	$ (112,258)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	4,023	2,780
Stock-based compensation	7,592	15,850
Non-cash interest expense and amortization of debt discount	209	314
Debt issuance costs from convertible notes	5,662
Change in fair value of convertible notes	25,000
Loss on extinguishment of debt	772
Non-cash operating lease expense	828	621
Bad debt expense	524	9,331
Loss on disposal of property and equipment		155
Changes in operating assets and liabilities:
Accounts receivable	10,867	(20,498)
Inventories	759	(3,535)
Prepaid expenses and other current assets	6,869	1,745
Other assets	999	(148)
Accounts payable	(2,366)	5,175
Accrued expenses	1,986	639
Sales returns reserve	(12,037)	11,293
Settlement liability	(34,372)	34,372
Other current and noncurrent liabilities	89	1,646
Deferred revenue		(294)
Operating lease liabilities	(550)	(687)
Net cash used in operating activities	(96,862)	(53,499)
Investing activities:
Purchases of property and equipment	(2,531)	(708)
Capitalized software development costs	(296)	(3,428)
Cash paid for acquisition of business		(2,434)
Net cash used in investing activities	(2,827)	(6,570)
Financing activities:
Proceeds from stock options exercised	134	1,652
Debt repayments	(16,238)
Proceeds from employee stock purchase plan purchases		2,674
Proceeds from issuance of convertible notes, net of issuance costs paid to lender	99,903
Payment of convertible notes issuance costs to third parties	(5,565)
Payment of deferred transaction costs	(872)
Payment of taxes related to net share settlement of restricted stock units	(29)
Restricted stock units settled in cash	(69)
Net cash provided by financing activities	77,264	4,326
Net decrease in cash and cash equivalents	(22,425)	(55,743)
Cash and cash equivalents at beginning of period	110,500	212,185
Cash and cash equivalents at end of period	88,075	156,442
Non-cash investing and financing activities:
Property and equipment and capitalized software costs in accounts payable and accrued liabilities	229	47
Deferred transaction costs included in accounts payable	182
Stock-based compensation included in capitalized software costs	$ 0	748
Convertible preferred stock issuance costs included in accounts payable		600
Acquisition liability in accrued liabilities		$ 429

Description of Business and Oth

Description of Business and Other Matters	9 Months Ended
	Sep. 30, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Description of Business and Other Matters	1. Description of business and other matters Eargo, Inc. (the “Company”) is a medical device company dedicated to improving the quality of life of people with hearing loss. The Company’s innovative product and go-to-market approach address the major challenges of traditional hearing aid adoption, including social stigma, accessibility and cost. DOJ investigation and settlement and claims audits On September 21, 2021, the Company was informed that it was the target of a criminal investigation by the U.S. Department of Justice (the “DOJ”) related to insurance reimbursement claims the Company submitted on behalf of its customers covered by various federal employee health plans under the Federal Employee Health Benefits (“FEHB”) program, which is administered by the Office of Personnel Management (the “OPM”). The investigation also pertained to Eargo’s role in customer reimbursement claim submissions to federal employee health plans (collectively, the “DOJ investigation”). Total payments the Company received from the government in relation to claims submitted under the FEHB program, net of any product returns and associated refunds, were approximately $ 44.0 million. Additionally, the third-party payor with whom the Company historically had the largest volume, which is one of the carriers contracted with the OPM under the FEHB program (“largest third-party payor”), conducted an audit of insurance reimbursement claims (“claims”) submitted by the Company (the “Primary Audit”), which included a review of medical records. The Company was informed by the third-party payor conducting the Primary Audit that the DOJ was the principal contact related to the subject matter of the Primary Audit. On January 4, 2022, the DOJ confirmed to the Company that the investigation had been referred to the Civil Division of the DOJ and the U.S. Attorney’s Office for the Northern District of Texas and the criminal investigation was no longer active. On April 29, 2022, the Company entered into a civil settlement agreement with the U.S. government that resolved the DOJ investigation related to the Company’s role in customer reimbursement claim submissions to various federal employee health plans under the FEHB program. The settlement agreement provided for the Company’s payment of approximately $ 34.4 million to the U.S. government and resolved allegations that the Company submitted or caused the submission of claims for payment to the FEHB program using unsupported hearing loss-related diagnostic codes. As discussed further in Note 5, based on the settlement agreement with the U.S. government, the Company recorded a settlement liability of $ 34.4 million as of December 31, 2021. The settlement amount was treated as consideration payable to a customer and was recorded as a reduction of revenue in the third quarter of 2021. On May 2, 2022, the Company paid the settlement amount. From the time the Company learned of the DOJ investigation and until December 8, 2021, the Company continued to process orders for customers with potential insurance benefits (including FEHB program members) but suspended all claims submission activities and offered affected customers ( i.e. , customers using insurance benefits as a method of direct payment for transactions prior to December 8, 2021) the option to return their hearing aids or purchase their hearing aids without the use of their insurance benefits in case their claim was denied or ultimately not submitted by the Company to their insurance plan for payment (the “extended right of return”). The Company determined that customer transactions using insurance benefits as a method of direct payment occurring between September 21, 2021 (when the Company learned of the DOJ investigation) and December 8, 2021 (when the Company temporarily stopped accepting insurance benefits as a method of direct payment) did not meet the criteria for revenue recognition under ASC 606 and, as such, the Company did not recognize revenue for shipments within that timeframe to customers with potential insurance benefits, substantially all of whom were covered under the FEHB program. The Company previously estimated that a majority of customers with unsubmitted claims would choose to return the hearing aid system if their insurance provider denied their claim or the claim was ultimately not submitted by the Company for payment, resulting in an increase in expected product returns from sales transactions that occurred prior to September 21, 2021 and recorded during the year ended December 31, 2021. Returns associated with unsubmitted claims reduce the sales returns reserve, with a corresponding reduction in the related accounts receivable at the time the product is returned. Further, the Company also estimated that, in addition to the customers who chose to return their hearing aid systems, a significant number of customers whose claims were denied by payors or not submitted by the Company for payment may not pay for or return the hearing aid system, resulting in bad debt expense that was recorded during the year ended December 31, 2021. During the three months ended September 30, 2022, the Company made the determination not to seek payment for approximately $ 16.1 million from customers with unsubmitted and unpaid claims. The Company accounted for this decision as a pricing concession ( “ Pricing Concession ” ) and during the three and nine months ended September 30, 2022 recorded a $ 16.1 million reduction to its insurance-related accounts receivable balance along with related reduction to net revenue of $ 11.6 million and the allowance for credit losses balance of $ 4.5 million for such unsubmitted and unpaid claims. Further, the Company simultaneously recorded a decrease in its insurance-related sales return reserve of $ 11.3 million along with a corresponding increase of $ 11.3 million to net revenue for the three and nine months ended September 30, 2022 related to unsubmitted and unpaid claims. These changes resulted in a decrease in net revenue of $ 0.3 million for the three and nine months ended September 30, 2022. In September 2022, the Company resumed accepting insurance benefits as a method of direct payment in certain limited circumstances where there is testing by an independent, licensed healthcare provider to establish medical necessity with supporting clinical documentation. While the Company is continuing to work with third-party payors with the objective of validating and establishing additional processes to support claims that it may submit for reimbursement, the Company may not be able to arrive at acceptable processes or submit future claims in sufficient volume to meaningfully restore or expand the amount of its insurance-based business. Notwithstanding the DOJ settlement, the Company remains subject to prepayment review of claims by its largest third-party payor before any insurance payments are made. Liquidity and going concern The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. The Company has incurred losses and negative cash flows from operations since its inception and management expects to incur additional substantial losses in the foreseeable future. As of September 30, 2022, the Company had cash and cash equivalents of $ 88.1 million and an accumulated deficit of $ 470.5 million. In June 2022, the Company entered into a note purchase agreement (“Note Purchase Agreement”) pursuant to which it agreed to issue and sell up to $ 125.0 million in senior secured convertible notes (the “Notes”) of the Company (the “Note Transaction”), of which $ 100.0 million were issued on June 28, 2022 and will mature in June 2023. Further, the Company’s future operating requirements will be substantial and it will need to raise significant additional resources to fund its operations through equity or debt financing, or some variation thereof. The Company is currently exploring fundraising opportunities to meet these capital requirements, including conducting a rights offering (“Rights Offering”) under the terms of the Note Transaction documents. If the Company is unable to raise additional funding to meet its operational needs, it will be forced to limit or cease its operations . The Note Transaction and Rights Offering are discussed further in Note 6. The Company believes that, without the completion of the Rights Offering or an alternative future financing, its current resources are insufficient to satisfy its obligations as they become due within one year after the date that the financial statements are issued. The negative cash flows and current lack of financial resources of the Company raise substantial doubt as to the Company’s ability to continue as a going concern. Additionally, if the Company is unable to complete the Rights Offering and all of the Notes remain outstanding, it will have insufficient funds to repay the Notes at their maturity without additional capital. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainty. Since the announcement of the DOJ investigation, there has been and may continue to be a significant reduction in shipments, revenue and gross margin, which has and could continue to negatively impact the Company’s liquidity and working capital, including by impacting its ability to access additional capital. It is difficult to assess or predict at this time the extent to which the Company is able to validate and establish processes to support the submission of claims for reimbursement to health plans, including those under the FEHB program, and the future impacts of the implementation of an over-the-counter (“OTC”) hearing aid regulatory framework (which may lead insurance providers to take actions limiting the Company’s ability to access insurance coverage).

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of significant accounting policies Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting of Eargo, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, include all adjustments of a normal recurring nature necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations and cash flows. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on May 13, 2022. Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made in the accompanying unaudited condensed consolidated financial statements include, but are not limited to, the sales returns reserve, the present value of lease liabilities, the fair value of equity securities, the fair value of financial instruments, the allowance for credit losses, the net realizable value of inventory, the fair value of assets acquired in a business combination, the useful lives of long-lived assets, accrued product warranty reserve, legal and other contingencies, certain other accruals and recoverability of the Company’s net deferred tax assets and the related valuation allowance. Management periodically evaluates its estimates, which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from those estimates. Significant accounting policies There have been no significant changes to the accounting policies during the nine months ended September 30, 2022, as compared to the significant accounting policies described in Note 2 of the Notes to Consolidated Financial Statements in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K, except for the policy titled “Convertible notes - fair value option” below. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of demand deposit accounts, money market accounts and accounts receivable, including credit card receivables. The Company maintains its cash and cash equivalents, which may, at times, exceed federally insured limits, with financial institutions of high credit standing. As of September 30, 2022, the Company has not experienced any losses on its deposit accounts and money market accounts. As of September 30, 2022, the Company does not believe there is significant financial risk from nonperformance by the issuers of the Company’s deposit accounts and money market accounts. Approximately 93 % of the Company’s gross accounts receivable as of December 31, 2021 were for customers with insurance benefits, substantially all of whom were covered under the FEHB program. Furthermore, approximately 90 % of the Company’s gross accounts receivable as of December 31, 2021 were related to shipments of Eargo hearing aids to customers insured under a single insurance plan whose claims are processed through the Company’s largest third-party payor, which conducted the Primary Audit. The Company remains subject to a prepayment review of claims by the payor who conducted the Primary Audit. Please see caption “DOJ investigation and settlement and claims audits” in Note 1 for more information regarding the DOJ investigation and claims audits. As of September 30, 2022, subsequent to the Pricing Concession, there was no concentration in the Company’s accounts receivable. Convertible notes - fair value option The Company has elected the fair value option to account for the Notes that were issued in June 2022, discussed further in Note 6. The Company recorded the Notes at fair value with changes in fair value recorded as a component of other income (expense), net in the condensed consolidated statements of operations and comprehensive loss with the exception of changes in fair value due to instrument-specific credit risk, which are recorded as a component of other comprehensive income. Interest expense related to the Notes is included in the changes in fair value. As a result of applying the fair value option, direct costs and fees related to the Notes were not deferred and, therefore, expensed as incurred as a component of general and administrative expenses. Revenue recognition The Company’s revenue is generated from the sale of products (hearing aid systems and related accessories) and services (extended warranties). These products and services are primarily sold directly to customers through the Eargo website and the Company’s sales representatives. Under ASC 606, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by following a five step process: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Identify the contract with a customer . The Company generally considers completion of an Eargo sales order (which requires customer acceptance of the Company’s click-through terms and conditions for website sales and authorization of payment through credit card or another form of payment for sales made over the phone) as a customer contract provided that collection is considered probable. For payments that are not made upfront by credit card, the Company assesses insurance eligibility or customer creditworthiness based on credit checks, payment history, and/or other circumstances. For orders involving insurance payors, the Company validates customer eligibility and potential reimbursement amounts prior to shipping the product. If the criteria to establish a contract with a customer is not met, revenue is not recognized in accordance with ASC 606. Identify the performance obligations in the contract . Product performance obligations include hearing aid systems and related accessories and service performance obligations include extended warranty coverage. The Company also offers customers a one-time replacement of certain components of the hearing aid system for a fee (i.e., “loss and damage policy”), which represents an option with material right. However, as the historical redemption rate under the policy has been low, the option is not accounted for as a separate performance obligation. The Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. The Company has elected to treat shipping and handling activities performed after a customer obtains control of products as a fulfillment activity. Determine the transaction price and allocation to performance obligations . The transaction price in the Company’s customer contracts consists of both fixed and variable consideration. Fixed consideration includes amounts to be contractually billed to the customer while variable consideration may include concessions, product returns, discounts, incentives, or other similar items. Variable consideration is estimated based on contractual terms and historical analysis using specific data for the type of consideration being assessed. • Product Returns The Company’s customer contracts include the 45-day right of return that applies to all products and the extended right of return offered for certain shipments involving insurance payors prior to December 8, 2021 (at which time the Company temporarily ceased accepting insurance benefits as a method of direct payment). Please see caption “DOJ investigation and settlement and claims audits” in Note 1 for more information regarding the extended right of return. To estimate product returns, the Company analyzes various factors, including historical return levels, current economic trends, and insurance coverage. Based on this information, the Company reserves a percentage of product sale revenue and accounts for the estimated impact as a reduction in the transaction price. Consideration paid or payable to a customer that is not for a distinct good or service is accounted for as a reduction of the transaction price and recorded as a reduction in revenue in the period it becomes payable. • Concessions Concessions are generally viewed as any post-execution change to the original agreement between the Company and customer that increase the customer’s rights or the Company’s obligations without a commensurate increase to the consideration due the Company. Concessions may take many forms and include, but are not limited to, (i) accepting returns that are not required under the terms of the original arrangement, (ii) reducing the arrangement fee, and (iii) extending the terms of payment. While the Company granted price concession to its customers with unsubmitted and unpaid claims during the three months ended September 30, 2022 (please see caption “DOJ investigation and settlement and claims audits” in Note 1), the Company does not have an established history of providing concessions to its customers and has determined that no adjustments should made to the transaction price in the Company’s ongoing customer arrangements. However, at each reporting period, the Company will re-evaluate the occurrence and level of materiality of concessions and will assess any potential impact on the transaction price accordingly. Allocate the transaction price to the performance obligations in the contract. For contracts that contain multiple performance obligations, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis. Standalone selling prices are based on multiple factors including, but not limited to, historical discounting trends for products and services, gross margin objectives, internal costs, competitor pricing strategies, and industry technology lifecycles. Recognize revenue when or as the Company satisfies a performance obligation . Revenue for products (hearing aid systems and related accessories) is recognized at a point in time, which is generally upon shipment provided all other revenue recognition criteria have been met. Contract costs The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as expense when incurred if the amortization period would be one year or less. These incremental costs include processing fees paid to third-party financing vendors, who provide the Company’s customers with the option to finance their purchases. If a customer elects to utilize this service, the Company receives a non-recourse upfront payment for the product sold, less processing fee withheld by the financing vendor. These processing fees are recognized in cost of revenue in the condensed consolidated statements of operations and comprehensive loss as incurred. Recently adopted accounting pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify the accounting for income taxes. This standard removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing standards to improve consistent application. The Company adopted this standard in the fiscal year beginning January 1, 2022 . The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), which is intended to simplify the accounting for convertible debt instruments and convertible preferred stock. This standard removes the existing guidance in ASC 470-20 that requires companies to account for cash conversion features and beneficial conversion features in equity separately from the host convertible debt or preferred stock. The Company adopted this standard in the fiscal year beginning January 1, 2022 . The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Fair Value Measurements	3. Fair value measurements The following table summarizes the Company’s financial liabilities that were measured at fair value on a recurring basis by level within the fair value hierarchy: September 30, 2022 Level 1 Level 2 Level 3 Total (in thousands) Liabilities: Convertible notes $ — $ — $ 125,000 $ 125,000 There were no financial assets and liabilities outstanding that were remeasured at fair value on a recurring basis as of December 31, 2021. There were no financial assets outstanding that were remeasured at fair value on a recurring basis as of September 30, 2022. The carrying amounts reflected in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their short-term nature. The fair value option better reflects the underlying economics of the Notes and their embedded features. The fair value of the Notes is determined based on significant inputs not observable in the market, which represents a level 3 measurement within the fair value hierarchy. The fair value of the Notes is estimated as a combination of the Company’s equity, an option on the Company’s equity valued using the Black-Scholes option pricing model, and a short position in a bond valued under the discounted cash flow model. The following table provides a summary of the change in the estimated fair value of the Notes: Total (in thousands) Balance — December 31, 2021 $ — Fair value of convertible notes upon issuance 100,000 Change in fair value of convertible notes 25,000 Balance — September 30, 2022 $ 125,000

Balance Sheet Components

Balance Sheet Components	9 Months Ended
	Sep. 30, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Balance Sheet Components	4. Balance sheet components Inventories Inventories consist primarily of raw materials related to component parts and finished goods. The following is a summary of the Company’s inventories by category: September 30, December 31, 2022 2021 (in thousands) Raw materials $ 493 $ 1,905 Finished goods 4,460 3,807 Total inventories $ 4,953 $ 5,712 Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following: September 30, December 31, 2022 2021 (in thousands) Advanced payroll deposits $ 140 $ 3,889 Prepaid insurance fees 1,114 2,945 Prepaid marketing costs 297 1,948 Prepaid software subscription 1,036 1,468 Advance to suppliers 1,000 94 Deferred financing costs 1,054 — Other 417 529 Total prepaid expenses and other current assets $ 5,058 $ 10,873 Property and equipment, net Property and equipment, net, consists of the following: September 30, December 31, 2022 2021 (in thousands) Capitalized software $ 11,587 $ 11,569 Tools and lab equipment 5,813 4,712 Furniture and fixtures 1,677 906 Leasehold improvements 993 861 Computer and equipment 482 401 20,552 18,449 Less accumulated depreciation and amortization ( 11,861 ) ( 8,898 ) Total property and equipment, net $ 8,691 $ 9,551 Depreciation and amortization expense for the three months ended September 30, 2022 and 2021 amounted to $ 1.2 million and $ 1.4 million, respectively, which includes amortization of capitalized software costs of $ 0.9 million and $ 0.8 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2022 and 2021 amounted to $ 3.6 million and $ 2.8 million, respectively, which includes amortization of capitalized software costs of $ 2.7 million and $ 1.2 million, respectively. Intangible assets, net Intangible assets, net consist of the following: September 30, 2022 Gross carrying value Accumulated amortization Net carrying value (in thousands) Developed technologies $ 1,700 $ 531 $ 1,169 Other 290 242 48 Total intangible assets, net $ 1,990 $ 773 $ 1,217 December 31, 2021 Gross carrying value Accumulated amortization Net carrying value (in thousands) Developed technologies $ 1,700 $ 212 $ 1,488 Other 290 97 193 Total intangible assets, net $ 1,990 $ 309 $ 1,681 Amortization expense was $ 0.2 million and $ 0.5 million for the three and nine months ended September 30, 2022, respectively. The following table summarizes estimated future amortization expense of finite-lived intangible assets, net as of September 30, 2022: Amount (in thousands) Remainder of 2022 $ 154 2023 425 2024 425 2025 213 Total $ 1,217 Accrued expenses Accrued expenses consist of the following: September 30, December 31, 2022 2021 (in thousands) Accrued compensation $ 7,066 $ 4,845 Accrued warranty reserve 3,516 4,014 Refunds due to customers 384 376 Total accrued expenses $ 10,966 $ 9,235 Sales returns reserve The sales returns reserve consists of the following activity: Nine months ended September 30, 2022 2021 (in thousands) Sales returns reserve, beginning balance $ 13,827 $ 4,326 Reduction of revenue 11,637 32,612 Decrease related to Pricing Concession ( 11,263 ) — Utilization of sales returns reserve ( 12,411 ) ( 21,319 ) Sales returns reserve, ending balance $ 1,790 $ 15,619 During the three months ended September 30, 2022, as part of the Pricing Concession, the Company recorded a decrease in its insurance-related sales return reserve of $ 11.3 million related to unsubmitted and unpaid claims, which was reflected as a reduction to revenue in the condensed consolidated statement of operations. Please see caption “DOJ investigation and settlement and claims audits” in Note 1. Allowance for credit losses The allowance for credit losses consists of the following activity: Nine months ended September 30, 2022 2021 (in thousands) Allowance for credit losses, beginning balance $ 4,838 $ 1,868 Charged to expense 524 9,331 Accounts written off, net of recoveries ( 5,267 ) ( 6,628 ) Allowance for credit losses, ending balance $ 95 $ 4,571 Accrued warranty reserve The accrued warranty reserve consists of the following activity: Nine months ended September 30, 2022 2021 (in thousands) Accrued warranty reserve, beginning balance $ 4,014 $ 2,390 Charged to cost of revenue 1,632 2,145 Utilization of accrued warranty reserve ( 2,130 ) ( 973 ) Accrued warranty reserve, ending balance $ 3,516 $ 3,562

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	5. Commitments and contingencies Operating leases In September 2021, the Company entered into a lease agreement, as amended, for office and laboratory space located in San Jose, California. The lease commenced in September 2021 and has a 93 -month term with two 60 -month renewal options, which are not reasonably certain of being exercised. The Company also leases office space in Nashville, Tennessee, with a lease term that expires in March 2023. Variable lease payments are primarily comprised of common area maintenance. The right-of-use asset and corresponding lease liability for the Company’s operating leases were estimated using a weighted-average incremental borrowing rate of 7.7 %. The weighted-average remaining lease term is 6.64 years. For the three and nine months ended September 30, 2022, the Company incurred $ 0.4 million and $ 1.2 million of operating lease costs, respectively. Variable lease payments for operating expenses and costs related to short-term leases were $ 0.2 million for the nine months ended September 30, 2022 and were immaterial for the three months ended September 30, 2022. As of September 30, 2022, undiscounted future minimum lease payments due under the non-cancelable operating leases are as follows: Operating (in thousands) Remainder of 2022 $ 367 2023 1,114 2024 1,081 2025 1,331 2026 1,372 Thereafter 3,607 Total minimum future lease payments 8,872 Present value adjustment for minimum lease commitments ( 2,032 ) Total lease liability $ 6,840 Legal and other contingencies The Company is involved in legal proceedings in the ordinary course of its business and may become involved in additional legal proceedings. Other than those listed below, the Company does not believe that any lawsuits or claims currently pending against it, individually or in the aggregate, are material or will have a material adverse effect on its financial condition, results of operations or cash flows. The Company may enter into settlement discussions, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders. Unless stated otherwise, the matters discussed below, if decided adversely or settled by the Company, individually or in the aggregate, may result in a liability material to the Company’s financial condition, results of operations or cash flows. The Company is also subject to review from federal and state taxing authorities in order to validate the amounts of income, sales and/or use taxes which have been claimed and remitted. The Company has estimated exposure and established reserves for its estimated sales tax audit liability. In the normal course of business, the Company may agree to indemnify third parties with whom it enters into contractual relationships, including customers, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed, under certain conditions, to hold these third parties harmless against specified losses, such as those arising from a breach of representations or covenants, other third-party claims that the Company’s products, when used for their intended purposes, infringe the intellectual property rights of such other third parties, or other claims made against certain parties. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in any particular claim. DOJ Investigation and Settlement. On September 21, 2021, the Company was informed that it was the target of a criminal investigation by the DOJ related to insurance reimbursement claims the Company submitted on behalf of its customers covered by various federal employee health plans under the FEHB program. The investigation also pertained to the Company’s role in customer reimbursement claim submissions to federal employee health plans. Additionally, the Company was the subject of an ongoing claims audit by an insurance company that was historically the Company’s largest third-party payor and was informed by such insurance company that the DOJ was the principal contact related to the subject matter of the audit. In addition to such audit, the Company has been subject to a number of other audits of insurance reimbursement claims submitted to additional third-party payors. One of these claims audits did not relate to claims submitted under the FEHB program. On January 4, 2022, the DOJ confirmed to the Company that the investigation had been referred to the Civil Division of the DOJ and the U.S. Attorney’s Office for the Northern District of Texas and the criminal investigation was no longer active. On April 29, 2022, the Company entered into a civil settlement agreement with the U.S. government that resolved the DOJ investigation, including allegations that the Company violated the False Claims Act by knowingly submitting or causing the submission of false claims for payment under the FEHB program during the period from February 1, 2021 through September 22, 2021. The settlement agreement provided for the payment by the Company of approximately $ 34.4 million to the U.S. government and resolved allegations that the Company submitted or caused the submission of claims for payment to the FEHB program using unsupported hearing loss-related diagnostic codes. As of December 31, 2021, the Company recorded a $ 34.4 million settlement liability in the condensed consolidated balance sheets in connection with the settlement. The settlement amount was treated as consideration payable to a customer and was recorded as a reduction in revenue in the third quarter of 2021. On May 2, 2022, the Company paid the settlement amount. The settlement of the investigation may not resolve all of the audits of insurance reimbursement claims by additional third-party payors, and additionally the Company remains subject to a prepayment review of claims by the payor who conducted the Primary Audit. The Company intends to continue to work with applicable third-party payors to establish processes to support any claims that it may submit for reimbursement, and there are no guarantees that the Company will be able to arrive at such acceptable processes or submit future claims in sufficient volume to meaningfully restore or expanded its insurance-based business. Securities Class Action. On October 6, 2021, putative shareholder Joseph Fazio filed a purported securities class action against the Company and certain of its officers, captioned Fazio v. Eargo, Inc., et al. , No. 21-cv-07848 (N.D. Cal. Oct. 6, 2021) (the “Fazio Action”). Plaintiff Fazio alleges that certain of the Company’s disclosures about its business, operations, and prospects, including reimbursements from third-party payors, violated federal securities laws. Fazio voluntarily dismissed his complaint on December 6, 2021. On November 4, 2021, putative shareholder Alden Chung filed a purported class action lawsuit substantially similar to the Fazio Action, captioned Chung v. Eargo, Inc., et al. , No. 21-cv-08597 (N.D. Cal. Nov. 4, 2021) (the “Chung Action”). On November 10, 2021, putative shareholder IBEW Local 353 Pension Plan filed a purported class action substantially similar to the Fazio and Chung Actions and also asserting claims under the federal securities laws against current and former members of the Company’s Board of Directors (the “Board of Directors”) and the underwriters of the Company’s October 15, 2020 initial public offering of common stock, captioned IBEW Local 353 Pension Plan v. Eargo, Inc., et al. , No. 21-cv-08747 (N.D. Cal. Nov. 10, 2021) (the “IBEW Action”). These class actions, which seek damages and other relief, were filed in the United States District Court for the Northern District of California. The Fazio and Chung Actions were brought purportedly on behalf of a class of investors who purchased or otherwise acquired Eargo securities between February 25, 2021 and September 22, 2021. The IBEW Local 353 Action was brought purportedly on behalf of a class of investors who purchased or otherwise acquired: (i) Eargo shares in or traceable to the Company’s October 15, 2020 initial public offering of common stock; and/or (ii) shares of Eargo common stock between October 15, 2020 and September 22, 2021. On January 5, 2022, the court consolidated the foregoing class actions (as consolidated, the “Securities Class Action”) under the caption In re Eargo, Inc. Securities Litigation , No. 21-cv-08597-CRB, and appointed IBEW Local 353 Pension Plan and Xiaobin Cai as Lead Plaintiffs and Bernstein Litowitz Berger & Grossmann LLP and Block & Leviton LLP as Lead Counsel. On May 20, 2022, Lead Plaintiffs filed a consolidated amended complaint, which purports to extend the class period through March 2, 2022. Defendants filed a motion to dismiss on July 29, 2022. On September 7, 2022, plaintiffs filed their opposition, and on October 7, 2022, Defendants filed their reply brief in support of their motion to dismiss. A hearing on Defendants’ motion to dismiss is currently scheduled for December 16, 2022. The Company intends to vigorously defend the Securities Class Action and cannot reasonably estimate any loss or range of loss that may arise from the litigation. Accordingly, the Company can provide no assurance as to the scope and outcome of this matter and no assurance as to whether its business, financial position, results of operations, or cash flows will not be materially adversely affected. Derivative Action. On December 3, 2021, putative shareholder Barbara Wolfson filed a derivative complaint purportedly on Eargo’s behalf against members of the Board of Directors and the Company as nominal defendant, captioned Wolfson v. Gormsen , et. al., No. 21-cv-09342 (N.D. Cal. Dec. 3, 2021) (the “ Wolfson Action”). Plaintiff asserts, among other things, that the defendants breached their fiduciary duties by allegedly failing to implement and maintain an effective system of internal controls related to the Company’s financial reporting, public disclosures and compliance with laws, rules and regulations governing the business. Plaintiff purports to assert derivative claims on the Company’s behalf for alleged violations of Section 14(a) of the Securities Exchange Act of 1934, as amended, breach of fiduciary duty, waste of corporate assets, and aiding and abetting. On March 1, 2022, the court entered the parties’ stipulation staying the Wolfson Action until the resolution of the pending motion to dismiss in the Securities Class Action. On June 9, 2022, putative shareholder Brodie Woodward filed a derivative complaint purportedly on Eargo’s behalf against the same defendants as in the Wolfson Action, as well as Juliet Tammenoms Bakker, Adam Laponis, and Geoff Pardo, captioned Woodward v. Gormsen, et al. , No. 22-cv-03419 (N.D. Cal. June 9, 2022) (together with the Wolfson Action, the “Derivative Action”). Plaintiff Woodward asserts substantively similar allegations and causes of action as those asserted in the Wolfson Action. On August 4, 2022, the court granted the parties’ stipulation to consolidate the Derivative Action and to stay the consolidated action until the resolution of the pending motion to dismiss in the Securities Class Action. The defendants intend to vigorously defend the Derivative Action and cannot reasonably estimate any loss or range of loss that may arise from the litigations. Accordingly, the Company can provide no assurance as to the scope and outcome of these matters and no assurance as to whether its business, financial position, results of operations, or cash flows will not be materially adversely affected. Proxy Statement Class Action. On September 14, 2022, putative shareholder Adam C. Wolfe filed a purposed securities class action against members of the Board of Directors and the Company as nominal defendant, captioned Wolfe v. Gormsen, et al. , No. 2022-0812-MTZ (Del. Ch. Sept. 14, 2022) (the “Wolfe Action”). Plaintiff Wolfe asserted, among other things, breaches of fiduciary duty by the Board of Directors in connection with the Note issuance, as well as that the Company’s proxy statement omitted material information concerning the Note issuance. Plaintiff Wolfe sought injunctive relief and attorneys’ fees and costs, among other remedies. Although the Company believes no supplemental disclosures were required under applicable law, to alleviate the costs, risks and uncertainties inherent in litigation, avoid any potential delay in the Company’s annual meeting of stockholders or the Rights Offering and provide additional information to its stockholders, on October 3, 2022, the Company filed a Current Report on Form 8-K to voluntarily supplement its proxy statement disclosures. On October 17, 2022, Plaintiff Wolfe filed a notice of dismissal with the court, which the court granted on October 24, 2022.

Debt Obligations

Debt Obligations	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Debt Obligations	6. Debt obligations 2018 Loan Agreement In June 2018, the Company entered into a Loan and Security Agreement (as subsequently amended, the “2018 Loan Agreement”) with Silicon Valley Bank, as amended in January 2019, May 2020 and September 2020. The Company’s existing subsidiaries were, and any additional future domestic subsidiaries of the Company were required to be, co-borrowers jointly and severally liable under the 2018 Loan Agreement. On June 28, 2022, in connection with the Note Transaction, the Company repaid the outstanding balance of $ 15.0 million, as well as a prepayment fee of $ 0.3 million and a final payment fee of $ 0.9 million, and terminated the 2018 Loan Agreement. In connection with the repayment of the 2018 Loan Agreement, the Company recognized a loss on extinguishment of $ 0.8 million. During the nine months ended September 30, 2022 and 2021, the Company recognized interest expense related to the 2018 Loan Agreement of $ 0.5 million and $ 0.8 million, respectively, which is inclusive of amortization of debt discount. 2022 Convertible Notes On June 24, 2022, the Company entered into the Note Purchase Agreement with an affiliate of Patient Square Capital (together with any subsequent holders of notes under the Note Purchase Agreement, the “Noteholders”) and Drivetrain Agency Services, LLC, as administrative agent and collateral agent. Pursuant to the Note Purchase Agreement, the Company agreed to issue and sell up to $ 125.0 million of Notes. On June 28, 2022, the Company closed the initial issuance of $ 100.0 million of Notes (the “First Tranche Closing”). The Company incurred $ 5.7 million in transaction costs related to the Note Transaction, which were recorded to general and administrative expenses. The Notes mature and will be due in cash at the Repayment Value (as defined below) on the one-year anniversary of the First Tranche Closing, subject to earlier conversion, redemption or repurchase in accordance with their terms (the “Maturity Date”). The “Repayment Value” of any Note on any applicable date means an amount payable such that the annualized return on the initial principal amount, which excludes accrued interest, of the Notes is not less than 12.00 %, or, if greater, an amount equal to 150 % of the initial principal amount of such Note. As of September 30, 2022, based on the outstanding borrowings, the Repayment Value of the Notes was $ 150.0 million. The Notes are senior, secured obligations bearing interest at a rate of 12.00 % per annum, payable quarterly in arrears on the first calendar day of each calendar quarter. Other than on the Maturity Date or any optional redemption date, accrued interest shall be paid in-kind by adding such interest to the outstanding principal of the Notes. The Company may, at its option, repay all (but not a portion) of the Notes outstanding upon three business days’ prior written notice at a price equal to the Repayment Value, and the Note Purchase Agreement does not prohibit the Company from refinancing the Notes with a new equity or debt financing. Upon an event of default, which includes a failure to complete the Rights Offering by December 24, 2022, the violation of certain covenants, and a change in control, the Company can be required to repay the Notes at the Repayment Value. Immediately upon the occurrence and during the continuance of an event of default, the Notes shall bear interest at a rate per annum which is 12.00 % above the rate that is otherwise applicable thereto. Rights offering The Company has agreed to complete a Rights Offering, subject to stockholder approval, for an aggregate of 375.0 million shares of common stock to the Company’s stockholders at an offering price of $ 0.50 per share of common stock. If a Rights Offering is completed within 150 days following the First Tranche Closing, then the Notes will automatically convert into (i) a number of shares of common stock equal to 375.0 million less the number of shares purchased in the Rights Offering by the Company’s stockholders, and (ii) cash in an amount equal to (x) the Repayment Value of Notes outstanding less (y) the Rights Offering Shortfall Amount. The “Rights Offering Shortfall Amount” represents an amount equal to (a) 375.0 million less the number of shares purchased by the Company’s stockholders in the Rights Offering, multiplied by (b) $ 0.50 . If existing stockholders purchase less than 75.0 million shares in the Rights Offering, then the Noteholders have agreed to purchase up to an additional $ 25.0 million of Notes (the “Second Tranche”). If a Rights Offering is completed between 150 days and 180 days following the First Tranche Closing, then the Second Tranche will be issued in full and the Notes will automatically convert into (i) a number of shares of common stock equal to 375.0 million less the number of shares purchased in the Rights Offering by the Company’s stockholders, and (ii) cash in an amount equal to the number of shares purchased by the Company’s stockholders multiplied by $0.50. Covenants and collateral The Notes are collateralized by substantially all the assets of the Company, including intellectual property. The Note Purchase Agreement contains various affirmative and restrictive covenants, including with respect to the Company’s ability to enter into fundamental transactions, incur additional indebtedness, grant liens, pay any dividend or make any distributions to its holders, make investments, merge or consolidate with any other person or engage in transactions with the Company’s affiliates, as well as requiring the Company to maintain a minimum of $ 40.0 million of cash and cash equivalents. The Company was in compliance with all of the covenants as of September 30, 2022 .

Stock-based Compensation

Stock-based Compensation	9 Months Ended
	Sep. 30, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-based Compensation	7. Stock-based compensation Total stock-based compensation is as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in thousands) Cost of revenue $ 35 $ 104 $ 94 $ 403 Research and development 707 1,584 1,142 3,751 Sales and marketing 642 1,841 1,975 5,595 General and administrative 1,673 1,949 4,381 6,101 Total stock-based compensation $ 3,057 $ 5,478 $ 7,592 $ 15,850 Stock-based compensation recorded to research and development expenses during the nine months ended September 30, 2022 included a decrease in cumulative compensation cost recorded for performance-based restricted stock units of $ 1.1 million as further discussed below. No stock-based compensation costs have been capitalized during the nine months ended September 30, 2022. Stock-based compensation costs capitalized as part of capitalized software costs was $ 0.2 million and $ 0.7 million during the three and nine months ended September 30, 2021, respectively. Equity incentive plans As of September 30, 2022, 4,737,428 shares of common stock were issuable upon the exercise of outstanding awards under the 2010 Equity Incentive Plan. As of September 30, 2022, the Company had reserved 9,307,482 shares of common stock for issuance under the 2020 Equity Incentive Plan (the “2020 Plan”), of which 5,144,707 were available for issuance in connection with grants of future awards. As a result of the uncertainty created by the DOJ investigation and the claims audits, on November 9, 2021, the Company temporarily restricted its employees from selling Company common stock, ceased granting stock option awards and restricted stock units (“RSUs”) that settle solely in Company common stock, suspended its ESPP and paused the settlement of outstanding RSUs, each effective as of November 9, 2021. The Company resumed granting RSUs on March 18, 2022 and RSUs that vested on November 15, 2021 were settled in cash during the first quarter of 2022. All RSUs that vested during the nine months ended September 30, 2022 were settled in shares during the reporting period. The Company resumed granting stock option awards on August 23, 2022. As of September 30, 2022, all outstanding equity awards continue to vest in accordance with their existing vesting schedules. Stock options Stock option activity for the nine months ended September 30, 2022 is set forth below: Number of Weighted Weighted Aggregate (in years) (in thousands) Balance December 31, 2021 5,406,815 $ 4.87 7.88 $ 12,860 Grants 448,830 2.48 Exercises ( 57,946 ) 2.31 Cancelled/forfeited ( 332,577 ) 5.14 Balance September 30, 2022 5,465,122 $ 4.69 6.51 $ 3,160 Vested and exercisable at September 30, 2022 3,571,439 $ 3.70 5.99 $ 3,160 The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2022 and 2021 was $ 1.34 per share and $ 25.94 per share, respectively. The aggregate intrinsic values of options outstanding and vested and exercisable were calculated as the excess of the exercise price of the options over the fair value of the Company’s common stock, if any. As of September 30, 2022, the unrecognized stock-based compensation related to outstanding unvested stock options was $ 7.7 million, which the Company expects to recognize over a remaining weighted-average period of approximately 1.7 years. Restricted stock units RSUs granted under the 2020 Plan represent share-based awards that generally entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. The RSUs cannot be transferred and the awards are subject to forfeiture if the holder’s service to the Company terminates prior to the satisfaction of the vesting restrictions. RSU activity for the nine months ended September 30, 2022 is set forth below: Number of Weighted average Balance December 31, 2021 348,451 $ 43.19 RSUs granted 3,221,920 3.32 RSUs vested ( 74,166 ) 46.60 RSUs forfeited ( 217,470 ) 11.21 Balance September 30, 2022 3,278,735 $ 6.02 As of September 30, 2022, total unrecognized stock-based compensatio n related to unvested RSUs was $ 17.9 million, which the Company expects to recognize over a remaining weighted-average period of approximately 3.55 years. Performance-based restricted stock units In June 2021, the Company granted 80,000 RSUs with performance-based vesting conditions that primarily related to the achievement of certain minimum sales of Eargo hearing aid systems and that must be met by December 31, 2022 for the awards to vest. The grant date fair value of the awards was $ 3.0 million, and the Company previously estimated that all vesting conditions were probable of being satisfied through March 31, 2022. As of June 30, 2022, the vesting conditions associated with 75 % of the awards were concluded to be improbable of being satisfied, and the Company recorded a reduction in cumulative compensation cost of $ 1.1 million during the three months then ended. None of these awards have vested or were forfeited and the probability assessment remained unchanged as of September 30, 2022. Employee stock purchase plan As of September 30, 2022, the Company reserved 1,502,310 shares of common stock for issuance under the ESPP, of which 1,327,567 were available for future issuance. The ESPP provides for consecutive, overlapping 24-month offering periods, which are generally divided into four purchase periods of approximately six months. The offering periods are scheduled to start on the first trading day on or after May 16 and November 16 of each year. Contributions under the ESPP are generally limited to a maximum of 15 % of an employee’s eligible compensation. Each offering period consists of four six-month purchase periods. On each purchase date, which falls on the last date of each purchase period, ESPP participants will purchase shares of common stock at a price per share equal to 85 % of the lesser of (1) the fair market value per share of the common stock at the start of the offering period or (2) the fair market value of the common stock on the purchase date. The ESPP was suspended on November 9, 2021, and there were no offering periods in effect through September 30, 2022.

Net Loss Per Share Attributable

Net Loss Per Share Attributable To Common Stockholders	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Net Loss Per Share Attributable To Common Stockholders	8. Net loss per share attributable to common stockholders The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share for the periods presented due to their anti-dilutive effect: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Common stock options issued and 5,465,122 5,543,234 5,465,122 5,543,234 Restricted stock units 3,358,735 479,665 3,358,735 479,665 Convertible notes 375,000,000 328,625 375,000,000 328,625 Total 383,823,857 6,351,524 383,823,857 6,351,524

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	9. Subsequent Events In October 2022, the Company amended its Amended and Restated Certificate of Incorporation to increase the number of authorized shares of its common stock to a total of 450,000,000 shares.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting of Eargo, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, include all adjustments of a normal recurring nature necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations and cash flows. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on May 13, 2022.
Use of Estimates	Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made in the accompanying unaudited condensed consolidated financial statements include, but are not limited to, the sales returns reserve, the present value of lease liabilities, the fair value of equity securities, the fair value of financial instruments, the allowance for credit losses, the net realizable value of inventory, the fair value of assets acquired in a business combination, the useful lives of long-lived assets, accrued product warranty reserve, legal and other contingencies, certain other accruals and recoverability of the Company’s net deferred tax assets and the related valuation allowance. Management periodically evaluates its estimates, which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from those estimates.
Concentration of Credit Risk	Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of demand deposit accounts, money market accounts and accounts receivable, including credit card receivables. The Company maintains its cash and cash equivalents, which may, at times, exceed federally insured limits, with financial institutions of high credit standing. As of September 30, 2022, the Company has not experienced any losses on its deposit accounts and money market accounts. As of September 30, 2022, the Company does not believe there is significant financial risk from nonperformance by the issuers of the Company’s deposit accounts and money market accounts. Approximately 93 % of the Company’s gross accounts receivable as of December 31, 2021 were for customers with insurance benefits, substantially all of whom were covered under the FEHB program. Furthermore, approximately 90 % of the Company’s gross accounts receivable as of December 31, 2021 were related to shipments of Eargo hearing aids to customers insured under a single insurance plan whose claims are processed through the Company’s largest third-party payor, which conducted the Primary Audit. The Company remains subject to a prepayment review of claims by the payor who conducted the Primary Audit. Please see caption “DOJ investigation and settlement and claims audits” in Note 1 for more information regarding the DOJ investigation and claims audits. As of September 30, 2022, subsequent to the Pricing Concession, there was no concentration in the Company’s accounts receivable.
Convertible Notes - Fair Value Option	Convertible notes - fair value option The Company has elected the fair value option to account for the Notes that were issued in June 2022, discussed further in Note 6. The Company recorded the Notes at fair value with changes in fair value recorded as a component of other income (expense), net in the condensed consolidated statements of operations and comprehensive loss with the exception of changes in fair value due to instrument-specific credit risk, which are recorded as a component of other comprehensive income. Interest expense related to the Notes is included in the changes in fair value. As a result of applying the fair value option, direct costs and fees related to the Notes were not deferred and, therefore, expensed as incurred as a component of general and administrative expenses.
Revenue Recognition	Revenue recognition The Company’s revenue is generated from the sale of products (hearing aid systems and related accessories) and services (extended warranties). These products and services are primarily sold directly to customers through the Eargo website and the Company’s sales representatives. Under ASC 606, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by following a five step process: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Identify the contract with a customer . The Company generally considers completion of an Eargo sales order (which requires customer acceptance of the Company’s click-through terms and conditions for website sales and authorization of payment through credit card or another form of payment for sales made over the phone) as a customer contract provided that collection is considered probable. For payments that are not made upfront by credit card, the Company assesses insurance eligibility or customer creditworthiness based on credit checks, payment history, and/or other circumstances. For orders involving insurance payors, the Company validates customer eligibility and potential reimbursement amounts prior to shipping the product. If the criteria to establish a contract with a customer is not met, revenue is not recognized in accordance with ASC 606. Identify the performance obligations in the contract . Product performance obligations include hearing aid systems and related accessories and service performance obligations include extended warranty coverage. The Company also offers customers a one-time replacement of certain components of the hearing aid system for a fee (i.e., “loss and damage policy”), which represents an option with material right. However, as the historical redemption rate under the policy has been low, the option is not accounted for as a separate performance obligation. The Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. The Company has elected to treat shipping and handling activities performed after a customer obtains control of products as a fulfillment activity. Determine the transaction price and allocation to performance obligations . The transaction price in the Company’s customer contracts consists of both fixed and variable consideration. Fixed consideration includes amounts to be contractually billed to the customer while variable consideration may include concessions, product returns, discounts, incentives, or other similar items. Variable consideration is estimated based on contractual terms and historical analysis using specific data for the type of consideration being assessed. • Product Returns The Company’s customer contracts include the 45-day right of return that applies to all products and the extended right of return offered for certain shipments involving insurance payors prior to December 8, 2021 (at which time the Company temporarily ceased accepting insurance benefits as a method of direct payment). Please see caption “DOJ investigation and settlement and claims audits” in Note 1 for more information regarding the extended right of return. To estimate product returns, the Company analyzes various factors, including historical return levels, current economic trends, and insurance coverage. Based on this information, the Company reserves a percentage of product sale revenue and accounts for the estimated impact as a reduction in the transaction price. Consideration paid or payable to a customer that is not for a distinct good or service is accounted for as a reduction of the transaction price and recorded as a reduction in revenue in the period it becomes payable. • Concessions Concessions are generally viewed as any post-execution change to the original agreement between the Company and customer that increase the customer’s rights or the Company’s obligations without a commensurate increase to the consideration due the Company. Concessions may take many forms and include, but are not limited to, (i) accepting returns that are not required under the terms of the original arrangement, (ii) reducing the arrangement fee, and (iii) extending the terms of payment. While the Company granted price concession to its customers with unsubmitted and unpaid claims during the three months ended September 30, 2022 (please see caption “DOJ investigation and settlement and claims audits” in Note 1), the Company does not have an established history of providing concessions to its customers and has determined that no adjustments should made to the transaction price in the Company’s ongoing customer arrangements. However, at each reporting period, the Company will re-evaluate the occurrence and level of materiality of concessions and will assess any potential impact on the transaction price accordingly. Allocate the transaction price to the performance obligations in the contract. For contracts that contain multiple performance obligations, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis. Standalone selling prices are based on multiple factors including, but not limited to, historical discounting trends for products and services, gross margin objectives, internal costs, competitor pricing strategies, and industry technology lifecycles. Recognize revenue when or as the Company satisfies a performance obligation . Revenue for products (hearing aid systems and related accessories) is recognized at a point in time, which is generally upon shipment provided all other revenue recognition criteria have been met. Contract costs The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as expense when incurred if the amortization period would be one year or less. These incremental costs include processing fees paid to third-party financing vendors, who provide the Company’s customers with the option to finance their purchases. If a customer elects to utilize this service, the Company receives a non-recourse upfront payment for the product sold, less processing fee withheld by the financing vendor. These processing fees are recognized in cost of revenue in the condensed consolidated statements of operations and comprehensive loss as incurred.
Recently Adopted Accounting Pronouncements	Recently adopted accounting pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify the accounting for income taxes. This standard removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing standards to improve consistent application. The Company adopted this standard in the fiscal year beginning January 1, 2022 . The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), which is intended to simplify the accounting for convertible debt instruments and convertible preferred stock. This standard removes the existing guidance in ASC 470-20 that requires companies to account for cash conversion features and beneficial conversion features in equity separately from the host convertible debt or preferred stock. The Company adopted this standard in the fiscal year beginning January 1, 2022 . The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2022
Summary of Financial Liabilities Measured at Fair Value on Recurring Basis	The following table summarizes the Company’s financial liabilities that were measured at fair value on a recurring basis by level within the fair value hierarchy: September 30, 2022 Level 1 Level 2 Level 3 Total (in thousands) Liabilities: Convertible notes $ — $ — $ 125,000 $ 125,000
2022 Convertible Notes
Summary of Change in the Estimated Fair Value	The following table provides a summary of the change in the estimated fair value of the Notes: Total (in thousands) Balance — December 31, 2021 $ — Fair value of convertible notes upon issuance 100,000 Change in fair value of convertible notes 25,000 Balance — September 30, 2022 $ 125,000

Balance Sheet Components (Table

Balance Sheet Components (Tables)	9 Months Ended
	Sep. 30, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Summary of Inventories	Inventories consist primarily of raw materials related to component parts and finished goods. The following is a summary of the Company’s inventories by category: September 30, December 31, 2022 2021 (in thousands) Raw materials $ 493 $ 1,905 Finished goods 4,460 3,807 Total inventories $ 4,953 $ 5,712
Summary of Prepaid Expenses and Other Current Assets	Prepaid expenses and other current assets consist of the following: September 30, December 31, 2022 2021 (in thousands) Advanced payroll deposits $ 140 $ 3,889 Prepaid insurance fees 1,114 2,945 Prepaid marketing costs 297 1,948 Prepaid software subscription 1,036 1,468 Advance to suppliers 1,000 94 Deferred financing costs 1,054 — Other 417 529 Total prepaid expenses and other current assets $ 5,058 $ 10,873
Summary of Property And Equipment, Net	Property and equipment, net, consists of the following: September 30, December 31, 2022 2021 (in thousands) Capitalized software $ 11,587 $ 11,569 Tools and lab equipment 5,813 4,712 Furniture and fixtures 1,677 906 Leasehold improvements 993 861 Computer and equipment 482 401 20,552 18,449 Less accumulated depreciation and amortization ( 11,861 ) ( 8,898 ) Total property and equipment, net $ 8,691 $ 9,551
Summary of Intangible Assets, Net	Intangible assets, net consist of the following: September 30, 2022 Gross carrying value Accumulated amortization Net carrying value (in thousands) Developed technologies $ 1,700 $ 531 $ 1,169 Other 290 242 48 Total intangible assets, net $ 1,990 $ 773 $ 1,217 December 31, 2021 Gross carrying value Accumulated amortization Net carrying value (in thousands) Developed technologies $ 1,700 $ 212 $ 1,488 Other 290 97 193 Total intangible assets, net $ 1,990 $ 309 $ 1,681
Summary of Estimated Future Amortization Expense of Finite-lived Intangible Assets, Net	The following table summarizes estimated future amortization expense of finite-lived intangible assets, net as of September 30, 2022: Amount (in thousands) Remainder of 2022 $ 154 2023 425 2024 425 2025 213 Total $ 1,217
Summary of Accrued Expenses	Accrued expenses consist of the following: September 30, December 31, 2022 2021 (in thousands) Accrued compensation $ 7,066 $ 4,845 Accrued warranty reserve 3,516 4,014 Refunds due to customers 384 376 Total accrued expenses $ 10,966 $ 9,235
Summary of Sales Returns Reserve	The sales returns reserve consists of the following activity: Nine months ended September 30, 2022 2021 (in thousands) Sales returns reserve, beginning balance $ 13,827 $ 4,326 Reduction of revenue 11,637 32,612 Decrease related to Pricing Concession ( 11,263 ) — Utilization of sales returns reserve ( 12,411 ) ( 21,319 ) Sales returns reserve, ending balance $ 1,790 $ 15,619
Summary of Allowance for Credit Losses	The allowance for credit losses consists of the following activity: Nine months ended September 30, 2022 2021 (in thousands) Allowance for credit losses, beginning balance $ 4,838 $ 1,868 Charged to expense 524 9,331 Accounts written off, net of recoveries ( 5,267 ) ( 6,628 ) Allowance for credit losses, ending balance $ 95 $ 4,571
Summary of Accrued Warranty Reserve	The accrued warranty reserve consists of the following activity: Nine months ended September 30, 2022 2021 (in thousands) Accrued warranty reserve, beginning balance $ 4,014 $ 2,390 Charged to cost of revenue 1,632 2,145 Utilization of accrued warranty reserve ( 2,130 ) ( 973 ) Accrued warranty reserve, ending balance $ 3,516 $ 3,562

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2022
Commitments And Contingencies Disclosure [Abstract]
Schedule of Undiscounted Future Minimum Lease Payments Due under Non-cancelable Operating Leases	As of September 30, 2022, undiscounted future minimum lease payments due under the non-cancelable operating leases are as follows: Operating (in thousands) Remainder of 2022 $ 367 2023 1,114 2024 1,081 2025 1,331 2026 1,372 Thereafter 3,607 Total minimum future lease payments 8,872 Present value adjustment for minimum lease commitments ( 2,032 ) Total lease liability $ 6,840

Stock-based Compensation (Table

Stock-based Compensation (Tables)	9 Months Ended
	Sep. 30, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Total Stock-based Compensation	Total stock-based compensation is as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (in thousands) Cost of revenue $ 35 $ 104 $ 94 $ 403 Research and development 707 1,584 1,142 3,751 Sales and marketing 642 1,841 1,975 5,595 General and administrative 1,673 1,949 4,381 6,101 Total stock-based compensation $ 3,057 $ 5,478 $ 7,592 $ 15,850
Summary of Stock Option Activity	Stock option activity for the nine months ended September 30, 2022 is set forth below: Number of Weighted Weighted Aggregate (in years) (in thousands) Balance December 31, 2021 5,406,815 $ 4.87 7.88 $ 12,860 Grants 448,830 2.48 Exercises ( 57,946 ) 2.31 Cancelled/forfeited ( 332,577 ) 5.14 Balance September 30, 2022 5,465,122 $ 4.69 6.51 $ 3,160 Vested and exercisable at September 30, 2022 3,571,439 $ 3.70 5.99 $ 3,160
Schedule of RSU Activity	RSU activity for the nine months ended September 30, 2022 is set forth below: Number of Weighted average Balance December 31, 2021 348,451 $ 43.19 RSUs granted 3,221,920 3.32 RSUs vested ( 74,166 ) 46.60 RSUs forfeited ( 217,470 ) 11.21 Balance September 30, 2022 3,278,735 $ 6.02

Net Loss Per Share Attributab_2

Net Loss Per Share Attributable To Common Stockholders (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Summary of Outstanding Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Net Loss Per Share	The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share for the periods presented due to their anti-dilutive effect: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Common stock options issued and 5,465,122 5,543,234 5,465,122 5,543,234 Restricted stock units 3,358,735 479,665 3,358,735 479,665 Convertible notes 375,000,000 328,625 375,000,000 328,625 Total 383,823,857 6,351,524 383,823,857 6,351,524

Description of Business - Addit

Description of Business - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Apr. 29, 2022	Sep. 30, 2022	Sep. 30, 2022	Jun. 30, 2022	Jun. 28, 2022	Jun. 24, 2022	Dec. 31, 2021	Sep. 21, 2021
Description Of Business [Line Items]
Insurance claims received under FEHB program								$ 44,000
Unsubmitted and unpaid claims		$ 16,100	$ 16,100
Reduction in insurance related accounts receivable		16,100	16,100
Reduction in insurance related revenue from contracts with customer		11,600	11,600
Reduction in insurance related allowance for doubtful accounts receivable		4,500	4,500
Reduction in revenue related to unpaid claims		11,300	11,263
Increase in insurance related revenue from contracts with customer		11,300	11,300
Reduction in net revenue		300	300
Cash and cash equivalents		88,075	88,075				$ 110,500
Accumulated deficit		470,528	470,528				356,812
Civil Settlement Agreement
Description Of Business [Line Items]
Settlement liability							$ 34,400
Civil Settlement Agreement | U.S. Government
Description Of Business [Line Items]
Settlement Liability	$ 34,400
2022 Convertible Notes
Description Of Business [Line Items]
Cash and cash equivalents		$ 40,000	$ 40,000
Debt issuance amount						$ 125,000
2022 Convertible Notes | Note Purchase Agreement
Description Of Business [Line Items]
Debt instrument maximum Issuance amount				$ 125,000
Debt issuance amount					$ 100,000

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Dec. 31, 2021	Sep. 30, 2022
ASU 2019-12
Summary Of Significant Accounting Policies [Line Items]
Change In Accounting Principle Accounting Standards Update Adoption Date		Jan. 01, 2022
Change In Accounting Principle Accounting Standards Update Adopted		true
Change In Accounting Principle Accounting Standards Update Immaterial Effect		true
ASU 2020-06
Summary Of Significant Accounting Policies [Line Items]
Change In Accounting Principle Accounting Standards Update Adoption Date		Jan. 01, 2022
Change In Accounting Principle Accounting Standards Update Adopted		true
Change In Accounting Principle Accounting Standards Update Immaterial Effect		true
Accounts Receivable | Credit Concentration Risk | FEHB
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	93%
Accounts Receivable | Credit Concentration Risk | Eargo Hearing Aids
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	90%

Fair Value Measurements - Summa

Fair Value Measurements - Summary of Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Liabilities:
Liabilities		$ 0
Fair Value on Recurring Basis | Convertible Notes
Liabilities:
Liabilities	$ 125,000,000
Fair Value on Recurring Basis | Level 3 | Convertible Notes
Liabilities:
Liabilities	$ 125,000,000

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Financial assets outstanding	$ 0	$ 0
Financial liabilities outstanding		$ 0

Fair Value Measurements - Sum_2

Fair Value Measurements - Summary of Change in the Estimated Fair Value (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Change in fair value of convertible notes	$ (25,000)	$ (25,000)
2022 Convertible Notes
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of convertible notes upon issuance		100,000
Change in fair value of convertible notes		25,000
Balance — September 30, 2022	$ 125,000	$ 125,000

Balance Sheet Components - Summ

Balance Sheet Components - Summary of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 493	$ 1,905
Finished goods	4,460	3,807
Total inventories	$ 4,953	$ 5,712

Balance Sheet Components - Su_2

Balance Sheet Components - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Advanced payroll deposits	$ 140	$ 3,889
Prepaid insurance fees	1,114	2,945
Prepaid marketing costs	297	1,948
Prepaid software subscription	1,036	1,468
Advance to suppliers	1,000	94
Deferred financing costs	1,054
Other	417	529
Total prepaid expenses and other current assets	$ 5,058	$ 10,873

Balance Sheet Components - Su_3

Balance Sheet Components - Summary of Property And Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 20,552	$ 18,449
Less accumulated depreciation and amortization	(11,861)	(8,898)
Total property and equipment, net	8,691	9,551
Capitalized Software
Property Plant And Equipment [Line Items]
Total property and equipment, gross	11,587	11,569
Tools and Lab Equipment
Property Plant And Equipment [Line Items]
Total property and equipment, gross	5,813	4,712
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Total property and equipment, gross	1,677	906
Leasehold Improvements
Property Plant And Equipment [Line Items]
Total property and equipment, gross	993	861
Computer and Equipment
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 482	$ 401

Balance Sheet Components - Addi

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property Plant And Equipment [Abstract]
Depreciation and amortization expense	$ 1,200	$ 1,400	$ 3,600	$ 2,800
Amortization of capitalized software costs	900	$ 800	2,700	$ 1,200
Amortization expense	200		500
Reduction in revenue related to unpaid claims	$ 11,300		$ 11,263

Balance Sheet Components - Su_4

Balance Sheet Components - Summary of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finite Lived Intangible Assets [Line Items]
Gross carrying value	$ 1,990	$ 1,990
Accumulated amortization	773	309
Net carrying value	1,217	1,681
Developed Technologies
Finite Lived Intangible Assets [Line Items]
Gross carrying value	1,700	1,700
Accumulated amortization	531	212
Net carrying value	1,169	1,488
Other
Finite Lived Intangible Assets [Line Items]
Gross carrying value	290	290
Accumulated amortization	242	97
Net carrying value	$ 48	$ 193

Balance Sheet Components - Su_5

Balance Sheet Components - Summary of Estimated Future Amortization Expense of Finite-lived Intangible Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
Remainder of 2022	$ 154
2023	425
2024	425
2025	213
Net carrying value	$ 1,217	$ 1,681

Balance Sheet Components - Su_6

Balance Sheet Components - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Accrued compensation	$ 7,066	$ 4,845
Accrued warranty reserve	3,516	4,014
Refunds due to customers	384	376
Total accrued expenses	$ 10,966	$ 9,235

Balance Sheet Components - Su_7

Balance Sheet Components - Summary of Sales Returns Reserve (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Sales returns reserve, beginning balance		$ 13,827	$ 4,326
Reduction of revenue		11,637	32,612
Decrease related to Pricing Concession	$ (11,300)	(11,263)
Utilization of sales returns reserve		(12,411)	(21,319)
Sales returns reserve, ending balance	$ 1,790	$ 1,790	$ 15,619

Balance Sheet Components - Su_8

Balance Sheet Components - Summary of Allowance for Credit Losses (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Receivables [Abstract]
Allowance for credit losses, beginning balance	$ 4,838	$ 1,868
Charged to expense	524	9,331
Accounts written off, net of recoveries	(5,267)	(6,628)
Allowance for credit losses, ending balance	$ 95	$ 4,571

Balance Sheet Components - Su_9

Balance Sheet Components - Summary of Accrued Warranty Reserve (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Accrued warranty reserve, beginning balance	$ 4,014	$ 2,390
Charged to cost of revenue	1,632	2,145
Utilization of accrued warranty reserve	(2,130)	(973)
Accrued warranty reserve, ending balance	$ 3,516	$ 3,562

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended
	Apr. 29, 2022 USD ($)	Sep. 30, 2021 Option	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Commitments And Contingencies [Line Items]
Operating lease, term of contract		93 months
Operating lease, renewal term		60 months
Operating lease number of renewal options | Option		2
ROU asset and operating lease liability, weighted-average incremental borrowing rate			7.70%	7.70%
Operating lease, weighted-average remaining lease term			6 years 7 months 20 days	6 years 7 months 20 days
Operating lease costs			$ 400	$ 1,200
Variable lease payments for operating expenses and costs related to short-term leases				$ 200
Settlement liability					$ 34,372
Civil Settlement Agreement
Commitments And Contingencies [Line Items]
Settlement liability					$ 34,400
Civil Settlement Agreement | U.S. Government
Commitments And Contingencies [Line Items]
Settlement Liability	$ 34,400

Commitments and Contingencies_2

Commitments and Contingencies - Schedule of Undiscounted Future Minimum Lease Payments Due under Non-cancelable Operating Leases (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Remainder of 2022	$ 367
2023	1,114
2024	1,081
2025	1,331
2026	1,372
Thereafter	3,607
Total minimum future lease payments	8,872
Present value adjustment for minimum lease commitments	(2,032)
Total lease liability	$ 6,840

Debt Obligations - Additional I

Debt Obligations - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended	9 Months Ended
	Jun. 28, 2022	Jun. 24, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Loss on extinguishment of debt				$ 772
Interest expense			$ 269	549	$ 798
Cash and cash equivalents				88,075		$ 110,500
Amendments 2018 Loan Agreement
Debt Instrument [Line Items]
Repayments on outstanding debt	$ 15,000
Prepayment fee	300
Final payment fee	900
Loss on extinguishment of debt	800
Interest expense				500	$ 800
2022 Convertible Notes
Debt Instrument [Line Items]
Debt issuance amount		$ 125,000
Interest rate		12%
Increase in interest rate		12%
Repayment value of outstanding notes				150,000
Cash and cash equivalents				$ 40,000
Covenant compliance				The Company was in compliance with all of the covenants as of September 30, 2022
2022 Convertible Notes | Rights Offering
Debt Instrument [Line Items]
Issuance of shares				375,000,000
Common stock offering price per share				$ 0.50
2022 Convertible Notes | Minimum
Debt Instrument [Line Items]
Interest rate		12%
2022 Convertible Notes | Minimum | Rights Offering
Debt Instrument [Line Items]
Issuance of shares				375,000,000
2022 Convertible Notes | Maximum
Debt Instrument [Line Items]
Percentage of initial principal amount		150%
2022 Convertible Notes | General And Administrative Expense
Debt Instrument [Line Items]
Note transaction cost incurred				$ 5,700
2022 Convertible Notes | First Tranche
Debt Instrument [Line Items]
Debt issuance amount	$ 100,000
2022 Convertible Notes | First Tranche | Rights Offering
Debt Instrument [Line Items]
Issuance of shares				375,000,000
Common stock offering price per share				$ 0.50
2022 Convertible Notes | Second Tranche | Maximum | Rights Offering
Debt Instrument [Line Items]
Issuance of shares				75,000,000
Additional issuance of shares				25,000,000

Stock-based Compensation - Summ

Stock-based Compensation - Summary of Total Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 3,057	$ 5,478	$ 7,592	$ 15,850
Cost of Revenue
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	35	104	94	403
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	707	1,584	1,142	3,751
Sales and Marketing
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	642	1,841	1,975	5,595
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 1,673	$ 1,949	$ 4,381	$ 6,101

Stock-based Compensation - Addi

Stock-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Jun. 30, 2021	Oct. 31, 2020	Jun. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation costs capitalized				$ 200	$ 0	$ 748
Shares of common stock issuable upon exercise of outstanding awards					3,571,439
Options granted					448,830
Weighted-average grant-date fair value of options granted					$ 1.34	$ 25.94
Unrecognized stock-based compensation related to outstanding unvested stock options					$ 7,700
Unrecognized stock-based compensation related to outstanding unvested stock options, period of recognition					1 year 8 months 12 days
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock-based compensation related to outstanding unvested stock options, period of recognition					3 years 6 months 18 days
Unrecognized compensation cost related to the RSUs					$ 17,900
Number of shares, RSUs granted					3,221,920
Number of shares, RSUs vested					74,166
Number of shares, RSUs forfeited					217,470
Performance-based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, RSUs granted	80,000
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage			75%
Share based cumulative compensation			$ 1,100		$ 1,100
Share-based compensation, options grants in period, grant date fair value					$ 3,000
Number of shares, RSUs vested					0
Number of shares, RSUs forfeited					0
2010 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of common stock issuable upon exercise of outstanding awards					4,737,428
2020 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for issuance					9,307,482
Number of shares available for grant					5,144,707
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for issuance					1,502,310
Number of shares available for grant					1,327,567
Employees eligible compensation maximum percentage					15%
Purchase shares of common stock at price per share equal to lesser		85%

Stock-based Compensation - Su_2

Stock-based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of shares, Balance	5,406,815
Number of shares, Grants	448,830
Number of shares, Exercises	(57,946)
Number of shares, Cancelled/forfeited	(332,577)
Number of shares, Balance	5,465,122	5,406,815
Number of shares, Vested and exercisable	3,571,439
Weighted average exercise price, Balance	$ 4.87
Weighted average exercise price, Grants	2.48
Weighted average exercise price, Exercises	2.31
Weighted average exercise price, Cancelled/forfeited	5.14
Weighted average exercise price, Balance	4.69	$ 4.87
Weighted average exercise price, Vested and exercisable	$ 3.70
Weighted average remaining contractual term, Balance	6 years 6 months 3 days	7 years 10 months 17 days
Weighted average remaining contractual term, Vested and exercisable	5 years 11 months 26 days
Aggregate intrinsic value, Balance	$ 3,160	$ 12,860
Aggregate intrinsic value, Vested and exercisable	$ 3,160

Stock-based Compensation - Su_3

Stock-based Compensation - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Balance | shares	348,451
Number of shares, RSUs granted | shares	3,221,920
Number of shares, RSUs vested | shares	(74,166)
Number of shares, RSUs forfeited | shares	(217,470)
Number of shares, Balance | shares	3,278,735
Weighted average grant date fair value per share, Balance | $ / shares	$ 43.19
Weighted average grant date fair value per share, RSUs granted | $ / shares	3.32
Weighted average grant date fair value per share, RSUs vested | $ / shares	46.60
Weighted average grant date fair value per share, RSUs forfeited | $ / shares	11.21
Weighted average grant date fair value per share, Balance | $ / shares	$ 6.02

Net Loss Per Share Attributab_3

Net Loss Per Share Attributable To Common Stockholders - Summary of Outstanding Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	383,823,857	6,351,524	383,823,857	6,351,524
Convertible Notes Payable
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	375,000,000	328,625	375,000,000	328,625
Common Stock Options Issued and Outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	5,465,122	5,543,234	5,465,122	5,543,234
Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	3,358,735	479,665	3,358,735	479,665

Subsequent Events - Additional

Subsequent Events - Additional Information (Details) - shares	Oct. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Subsequent Event [Line Items]
Common stock, shares authorized		300,000,000	110,000,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Common stock, shares authorized	450,000,000