This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. Any statements about our plans, objectives, expectations, strategies, beliefs, or future performance or events constitute forward-looking statements. Such statements are identified as those that include words or phrases such as "believes," "expects," "anticipates," "plans," "trend," "objective," "continue" or similar expressions or future or conditional verbs such as "will," "would," "should," "could," "might," "may" or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other important factors that could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. All forward-looking statements are qualified in their entirety by reference to the factors discussed in this report and the following risk factors discussed more fully in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008: (i) deterioration of economic conditions could harm our business; (ii) we have a history of losses and negative cash flow; (iii) we face aggressive competition in our business, and if we do not compete effectively our net sales and operating results will suffer; (iv) our financial results may fluctuate significantly, which may cause our stock price to decline; (v) On October 6, 2009, we received a letter from The Nasdaq Stock Market ("Nasdaq") notifying us that for the last 30 consecutive business days the bid price of our common stock has closed below the minimum $1.00 per share requirement for continued inclusion under Listing Rule 5450(a)(1). The letter stated that Nasdaq will provide us a grace period of 180 calendar days, or until April 5, 2010, to regain compliance. To regain compliance, any time before April 5, 2010, the bid price of our common stock must close at $1.00 per share or more for a minimum of 10 consecutive business days. If we do not regain compliance with Rule 5450(a)(1) by April 5, 2010, we will be eligible for an additional 180 calendar day compliance period if we meet The Nasdaq Capital Market initial listing criteria except for the bid price requirement. To avail ourselves of this alternative, we would need to submit an application to transfer our securities to The Nasdaq Capital Market. If we are not eligible for an additional compliance period, Nasdaq will provide us with written notification that our common stock will be delisted. At that time, we may appeal Nasdaq's determination to delist our common stock to the Listings Qualifications Panel. At our May 2009 annual shareholder meeting, our shareholders approved a one-for-five reverse stock split, which has yet to be implemented. We may implement this reverse stock split should we determine that such action is necessary; (vi) we have made a number of acquisitions and could make additional acquisitions, which could be difficult to integrate, disrupt our existing business, dilute the equity of our shareholders, harm our operating results, and create tension within our existing customer bases; (vii) if we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which could harm our business and the trading price of our common stock; (viii) the loss of any large customer or a reduction in orders from any large customer or buying groups could reduce our net sales and harm our operating results; (ix) we rely on several suppliers and contractors, and our business will be seriously harmed if these suppliers and contractors are not able to meet our requirements;
(x) we have high levels of product returns, remakes and repairs, and our net sales and operating results will be lower if these levels increase; (xi) if we fail to develop new and innovative products, our competitive position will suffer, and if our new products are not well accepted, our net sales and operating results will suffer; (xii) because of the complexity of our products, there may be undiscovered errors or defects that could harm our business or reputation; (xiii) if we are subject to litigation and infringement claims, they could be costly and disrupt our business; (xiv) we may be unable to adequately protect or enforce our proprietary technology, which may result in its unauthorized use or reduced sales or otherwise reduce our ability to compete;
(xv) we are dependent on international operations, which exposes us to a variety of risks, including the recent German legislative changes and adverse German court ruling in connection with our German operation, that could result in lower sales and operating results; (xvi) complications may result from hearing aid use, and we may incur significant expense if we are sued for product liability;
(xvii) if we fail to comply with Food and Drug Administration regulations or various sales-related laws, we may suffer fines, injunctions or other penalties;
(xviii) there may be sales of our stock by our directors and officers, and these sales could cause our stock price to fall; and (xix) provisions in our charter documents, our shareholders rights plan and Delaware law may deter takeover efforts that shareholders feel would be beneficial to shareholder value.

Because the foregoing factors could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements, undue reliance should not be placed on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of future events or developments.

OVERVIEW

Otix Global, Inc. ("Otix") was previously named Sonic Innovations, Inc. ("Sonic"). At the May 2009 annual meeting, the shareholders of Sonic voted to change the name to Otix. The change was to create a holding company that will allow the Sonic Innovations brand and Sonic's other brands to operate independently from each other. Sonic will continue as a company and brand, developing and distributing leading hearing instruments and services, and Otix will serve as the parent company of Sonic and Sonic's other legal entities.

Otix is a hearing aid company focused on the therapeutic aspects of hearing care. We design, develop, manufacture and market high-performance digital hearing aids intended to provide the highest levels of satisfaction for hearing impaired consumers. We have developed patented digital signal processing ("DSP") technologies based on what we believe is an advanced understanding of human hearing. In those countries where we have direct (owned) operations, we sell our products to hearing care professionals or directly to hearing impaired consumers. In other parts of the world where we do not have direct operations, we sell principally to distributors.

We were acquisitive after raising capital in an Initial Public Offering in 2000 and a Private Investment/Public Equity ("PIPE") offering in 2006. Product evolution continues, but the differentiation between product offerings by hearing aid companies has narrowed, and thus distribution and access to distribution continues to grow in importance. Accordingly, we acquired a number of our then distributors from 2000 to 2003. Thereafter, we acquired an operation in Germany with a unique distribution model. Then, from 2006 to 2008, we acquired a number of retail practices. This was all to strengthen our distribution network.

Germany Legislation. Legislation passed by the Federal Council of Germany in November 2008 and which became effective on April 1, 2009, resulted in sweeping changes to the way doctors and healthcare providers interact and are reimbursed by insurance companies. These changes require our German subsidiary to renegotiate contracts with insurance companies and ENT doctors. In the first three months of 2009, we believed our German subsidiary was making progress, having successfully renegotiated contracts representing approximately 27% of our 2008 German revenue. However, on April 1, 2009, we were notified by one large insurance company representing approximately 25% of our German revenue that, despite several months of favorable negotiations, due to "political headwinds," they were refusing to enter into a contract; therefore, our German subsidiary filed a lawsuit in the Social Court in Hamburg, Germany against this insurance company, requesting that the court compel the insurance company to enter into a contract with our German subsidiary. On April 28, 2009, the Court rejected these claims. We have subsequently filed an appeal of this decision. In addition, a number of other insurance companies were unsure if they should sign a contract because there were rumors that the newly enacted law could potentially change again, thus requiring the need to renegotiate again. Without renegotiated insurance contracts, and the ability to pay customary fitting fees to the ENT doctors, we expected revenue to decline substantially and cash flow of the operation would not be sufficient to support our intangibles balances. Thus, we recognized a $14,658 non-cash write-off of our goodwill and trade name associated with our German operation in the first quarter of 2009.

In June 2009, the German government passed additional amendments to the law that became effective July 23, 2009. The key implication of these amendments to our business model was to impose additional costs on the doctors and insurance companies that conduct business with our German operation.

We are currently renegotiating contracts in light of the new legislative requirements and are working to contract with other insurance companies as well. Although our German subsidiary is exploring and implementing alternative avenues for replacing the lost revenue, the lack of signed insurance contracts and the imposition of new and costly requirements on the ENT doctors and the insurance companies are expected to put further strain on sales beyond what we experienced in the third quarter of 2009.

Germany represented 78% of European segment revenues and 95% of European segment operating profit for the year ended December 31, 2008. Germany represented 69% and 74% of European segment revenue as well as 39% and 85% of European segment operating profit for the three and nine months ended September 30, 2009, respectively.

Market

The hearing aid market is large at both the wholesale level (over $2 billion) and the retail level (over $6 billion). It is estimated less than 24% of those who could benefit from a hearing aid actually own one. There are many factors that cause this low market penetration rate, such as the high cost of hearing aids, the stigma associated with wearing hearing aids, the discomfort of wearing hearing aids and the difficulty in adjusting to amplification. We believe that these negative factors will decrease in importance in the future because we expect the stigma aspect to decrease as improvements in technology make the devices smaller, less conspicuous and more comfortable and as hearing loss becomes more prevalent in society. In addition, demographic trends and modern lifestyle choices will accelerate hearing aid adoption rates. We expect that more people who could benefit from hearing aids will buy them, and we believe that the growth rate of the hearing impaired population could be significant, particularly as the developed world's population ages.

Offsetting this trend are the following market conditions affecting us in a negative way:

• Competition is intense and new product offerings by our competitors are coming to market more quickly than in the past.

• The performance, features and quality of lower-priced products continue to improve.

• Many consumers feel that hearing aids are simply too expensive and they cannot justify the purchase on a cost-benefit basis.

• Governments who reimburse for hearing aids are reducing the amount per device or are increasing the technology requirements for the same level of reimbursement. In a more specific circumstance to us, we have the German legislative changes previously mentioned.

• The available wholesale market continues to shrink as our competitors implement forward integration strategies and buying groups limit the number of manufacturers with whom they do business. Therefore, we plan to continue to develop and potentially acquire additional distribution capacities.

Product Developments

We officially launched Touch™, our first receiver-in-the-canal ("RIC") product family, in March 2009. RIC has become a very popular product type, representing approximately 35% of hearing aids sold in the United States. In addition to its sophisticated design, very small size and ease of use features, we believe Touch is the smallest and has the best moisture resistance of any RIC product on the market. Sonic's Touch products incorporate many of the sound processing technologies present in our Velocity ® series of hearing solutions. Touch provides natural sound quality, superior noise reduction, and excellent directionality, driven by our unique DIRECTIONALfocus® technology. Touch is offered at three price points and available in a choice of five base colors and 15 accent color clips. The three Touch products are readily identified by the number of processing channels. Touch 6 has six channels and two programs, Touch 12 has 12 channels and three programs, and Touch 24 has 24 channels, four programs and voice alerts.

The current global economic situation makes it more important than ever to provide our customers with pricing flexibility in selling to the hearing impaired consumer. In the second half of 2008, we launched four new products specifically designed to provide competitive features and additional price options for our customers. Velocity 24, our new premium product, combines a superior set of algorithms to provide the consumer with hands-free operation in a variety of listening environments. Our new advanced-level product, Velocity 12, offers many sophisticated features, such as automatic and adaptive directionality, data logging, and auto telephone. With Velocity 6, we have added a highly competitive mid-level product line. Velocity 4, our newest entry-level offering, makes Sonic's patented and proven noise reduction available at a price-point that is particularly attractive to cost-sensitive consumers. All Velocity products are available in a full line of custom models and feature a robust standard behind the ear hearing aid ("BTE") that can accommodate a severe hearing loss. Velocity 24, Velocity 12, and Velocity 6 also offer a miniBTE model that provides both open-fit and standard fittings, a powerful fitting range and extendable functionality such as Bluetooth and direct audio import support.

The ion® family of products - ion 400, ion 200, and ion - continues to be an important part of our strategy to provide outstanding products in every market segment. ion 400, launched in March 2008, offers premium features in the smallest open-fit product available on the market.

The market is using open-fit products primarily to target the first-time hearing aid wearer. The market for open-fit products has grown rapidly, as illustrated by the Hearing Industries Association ("HIA") data. The BTE category, into which open-fit and RIC products fall, has seen continued growth in 2008, representing 55% of the units sold in the United States, up from 51% in 2007 and 44% in 2006.

With the release of the Sonic's Touch product series, we now have 15 active product families - Touch 24, Touch 12, Touch 6, Velocity 24, Velocity 12, Velocity 6, Velocity 4, ion 400, ion 200, ion, Balance®, Applause®, Natura® Pro, Natura and Quartet®.

Distribution Developments

Hearing aids are generally sold through the following distribution channels:

• Independent retailers,

• Purchasing groups,

• Retail chains,

• Governments,

• Internet, and

• Manufacturer owned retail.

The growth today is in retail chains, governments, internet (small but growing) and manufacturer owned retail. Independent retailers are shrinking for a number of reasons, but foremost due to consolidation through acquisition by large retailers and manufacturers. We are competing in an industry that includes six much larger competitors who have significantly more resources and have established relationships and reputations. Our competitors continue to forward integrate by buying independents and offering financial arrangements through loans and other lock-up agreements. Therefore, the market available for us in the wholesale business is shrinking, making it difficult for us to compete in the traditional distribution fashion. For this reason, we are interested in both new

and existing distribution methods. We are making progress with our strategy. In certain cases, we sell direct to the consumer utilizing the ENT doctor to perform the hearing aid fitting, while in other cases, we sell direct to the consumer through various retail stores. We believe a combination of wholesale and direct-to-consumer distribution will continue to be critical for us in certain geographies. We also offer customer advances to secure distribution in situations where customers are seeking to grow their businesses.

In parts of the world where we do not have direct operations, we sell principally to distributors with payment terms ranging from 30 to 120 days. Certain distributors are offered volume discounts that are earned upon meeting unit volume targets. Distributor agreements do not convey price protection or price concession rights.

In 2008, we had a number of entities in Europe which lacked sufficient market share to effectively compete in today's environment. Therefore, we restructured and eliminated certain operations in 2008 centered mostly in Europe with the goal of streamlining processes, eliminating non-performing business units and focusing on profitable opportunities. On September 1, 2008, we sold one European operation and closed a second European operation. These are classified as discontinued operations in our Condensed Consolidated Statements of Operations.

Financial Results

Our loss from continuing operations of $21,612 for the nine months ended September 30, 2009, compared with a loss from continuing operations of $513 for the nine months ended September 30, 2008, was primarily impacted by the following items:

• Non-cash goodwill and definite-lived intangibles impairment charges of $14,658 as a result of an adverse legal decision and regulatory changes in Germany and $135 related to the closure of three U.S. retail locations.

• The legislative changes in Germany reduced our German sales and profitability.

• A decline in North American sales as a result of customer and sales force attrition, a major buying group utilizing two additional manufacturers, the economic downturn, and modest market penetration of our RIC products. We launched Touch, our RIC product family, in March 2009.

Our future sales and financial results for the next 12 months are expected to be driven by the following items:

• The penetration of the Touch product family. We have launched the product in all our major markets, including Germany early in the fourth quarter 2009. Touch and ion (open fit products) are product types that are experiencing growing demand in the marketplace.

• Launching a power BTE product in early 2010 for those individuals with profound hearing loss.

• Focusing on improving the results of retail audiology practices we acquired between 2006 and 2008.

• Implementation of cost savings initiatives. Reducing costs has been an on-going company focus since early 2008, with the closure/restructuring or sale of four European operations and significant U.S. cost reductions. Manufacturing continues lowering purchased component costs, reducing headcount, outsourcing to lower cost geographies and improving manufacturing efficiencies. During the first nine months of 2009 we had a net headcount reduction of 73 individuals or 11.3%, primarily in North America.

• We were awarded a contract with the U.S. Veteran's Administration ("the VA.") to supply hearing aids to U.S. veterans in August of 2009. According to data from the Hearing Industry Association, the VA represents approximately 18% of the market for hearing aids and experienced unit growth of more than 20% annually this past year. We were successful in receiving an award in each of the categories in which we bid, allowing us to sell our custom, behind-the-ear and receiver-in-canal products through the VA. The contract award from the VA is a one-year contract with four one-year extensions, at the VA's option. We anticipate participating on the contract for the entire five years. According to contract documents, the VA anticipates purchasing a total of approximately 430,000 hearing aids across all contract awardees in the first year, with steady growth in volume over the following four years. We currently expect to incur training and startup costs relating to the VA contract in the next two quarters of approximately $150 to $200 per quarter.

Offsetting these developments will be the following factors:

• The likely continued decline of sales to insurance companies in our German operation and possible continued decline in North American wholesale and retail.

We will continue to review our strategic alternatives in light of the adverse events in Germany and focus on reducing costs, strengthening cash flow, expanding distribution channels, enhancing customer service, improving product quality, launching new products, and improving operational efficiency.

The following table sets forth selected statement of operations information for the periods indicated expressed as a percentage of net sales.

                                                 Three months ended            Nine months ended
                                                    September 30,                September 30,
                                                 2009           2008          2009           2008
Net sales                                         100.0 %       100.0 %        100.0 %       100.0 %
Cost of sales                                      39.2 %        35.7 %         40.1 %        36.5 %

Gross profit                                       60.8 %        64.3 %         59.9 %        63.5 %
Selling, general and administrative expense        62.9 %        57.5 %         60.5 %        56.4 %
Research and development expense                    5.8 %         6.4 %          7.2 %         6.5 %
Goodwill and definite-lived intangibles
impairment charges                                  0.6 %         0.0 %         20.3 %         0.0 %
Restructuring charges                               0.4 %         0.7 %          0.9 %         1.6 %

Operating loss                                     (8.9 %)       (0.4 %)       (29.0 %)       (1.0 %)
Interest expense                                   (0.4 %)       (0.7 %)        (0.5 %)       (0.6 %)
Other income, net                                   0.9 %         0.2 %          0.4 %         0.7 %

Loss before income taxes                           (8.4 %)       (0.9 %)       (29.1 %)       (0.9 %)
Provision (benefit) for income taxes                0.5 %        (2.9 %)         0.5 %        (0.3 %)

Income (loss) from continuing operations           (8.9 %)        2.0 %        (29.6 %)       (0.5 %)
Loss from discontinued operations, net of
income taxes                                       (0.0 %)       (1.1 %)        (0.0 %)       (3.8 %)

Net income (loss)                                  (8.9 %)        0.9 %        (29.6 %)       (4.3 %)

Net Sales. Net sales consist of product sales less a provision for sales returns, which is made at the time of the related sale. Net sales by reportable operating segment were as follows:

                            Three months ended                 Nine months ended
                              September 30,                      September 30,
                         2009       2008     Change         2009       2008     Change
       North America   $  8,503   $ 11,899    (28.5 %)    $ 26,415   $ 36,131    (26.9 %)
       Europe             6,965     11,726    (40.6 %)      27,235     38,557    (29.4 %)
       Rest-of-World      7,671      7,686     (0.2 %)      19,341     22,910    (15.6 %)

       Total           $ 23,139   $ 31,311    (26.1 %)    $ 72,991   $ 97,598    (25.2 %)

The following table reflects the significant components of sales activity for the three months ended September 30, 2008 to the three months ended September 30, 2009.

                                         North America                Europe                Rest-of-World                Total
                                         $            %            $            %            $          %            $            %
Sales for the three months ended
September 30, 2008                    $ 11,899                  $ 11,726                  $ 7,686                 $ 31,311
Organic growth (reduction)              (3,352 )    (28.2 %)      (4,520 )    (38.5 %)        598       7.8 %       (7,274 )    (23.2 %)
Foreign currency                           (44 )     (0.3 %)        (241 )     (2.1 %)       (613 )    (8.0 %)        (898 )     (2.9 %)

Sales for the three months ended
September 30, 2009                    $  8,503      (28.5 %)    $  6,965      (40.6 %)    $ 7,671      (0.2 %)    $ 23,139      (26.1 %)

The following table reflects the significant components of sales activity for the nine months ended September 30, 2008 to the nine months ended September 30, 2009.

                                         North America                Europe                 Rest-of-World                 Total
                                         $            %            $            %            $            %             $            %
Sales for the nine months ended
September 30, 2008                    $ 36,131                  $ 38,557                  $ 22,910                  $  97,598
. . .