electroCore, Inc 10-Q for FY2025 Q1
electroCore, Inc. (ECOR)
About this 10-Q
electroCore, Inc filed this 10-Q on May 7, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $6.72M
- up 23.4% from $5.44M a year earlier
- Net loss
- $3.86M
- compared with a net loss of $3.51M a year earlier
- Diluted EPS
- -$0.47
- compared with -$0.53 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| (Mark One) | ||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
FOR THE QUARTERLY PERIOD ENDED
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
Commission File Number
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||
| ☒ | Smaller reporting company | ||||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
As of May 2, 2025, the registrant had shares of common stock outstanding.
| 2 |
REFERENCES TO ELECTROCORE
In this Quarterly Report on Form 10-Q (this “Quarterly Report”), unless otherwise stated or the context otherwise requires, references to the “Company,” “electroCore,” “we,” “us” and “our” refer to electroCore, Inc. a Delaware corporation and its subsidiaries.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this Quarterly Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to them. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to risks and uncertainties included in our Form 10-Qs, our annual report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”), in our other filings with the U.S. Securities and Exchange Commission (the “SEC”) or in materials incorporated by reference therein, including the information in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in such filings. Furthermore, any such forward-looking statements in this Quarterly Report speak only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements.
The electroCore logo, gammaCore, Truvaga, TAC-STIM, names, logos, and other trademarks of electroCore, Inc. appearing in this Quarterly Report are the property of electroCore, Inc. All other trademarks, service marks and trade names in this Quarterly Report are the property of their respective owners. We have omitted the ® and ™ designations, as applicable, for the trademarks used in this Quarterly Report.
| 3 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share data)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Marketable securities | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right of use assets, net | ||||||||
| Other assets, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Noncurrent liabilities: | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Total liabilities | ||||||||
| Contingencies (see Note 14) | ||||||||
| Stockholders’ equity: | - | - | ||||||
| Common Stock, par value $ per share; shares authorized at March 31, 2025 and December 31, 2024; shares issued and outstanding at March 31, 2025 and shares issued and outstanding at December 31, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 4 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
| 2025 | 2024 | |||||||
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net sales | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Research and development | ||||||||
| Selling, general and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (income) expense | ||||||||
| Interest and other income | ( | ) | ( | ) | ||||
| Other expense | ||||||||
| Total other expense (income) | ( | ) | ||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Benefit from income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share of common stock - Basic and Diluted | $ | ) | $ | ) | ||||
| Weighted average common shares outstanding - Basic and Diluted (see Note 11) | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 5 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)
(in thousands)
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net loss | $ | ( |
$ | ( |
||||
| Other comprehensive (loss) income: | ||||||||
| Foreign currency translation adjustment | ( |
|||||||
| Other comprehensive (loss) income | ( |
|||||||
| Comprehensive loss | $ | ( |
$ | ( |
) | |||
See accompanying notes to unaudited condensed consolidated financial statements.
| 6 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity
For the Three Months Ended March 31, 2025 and 2024
(unaudited)
(in thousands)
| Shares | Amount | capital | deficit | income (loss) | equity | |||||||||||||||||||
| Stockholders’ Equity | ||||||||||||||||||||||||
| Common | Additional | Accumulated other | Total | |||||||||||||||||||||
| Stock | paid-in | Accumulated | comprehensive | stockholders’ | ||||||||||||||||||||
| Shares | Amount | capital | deficit | income (loss) | equity | |||||||||||||||||||
| Balances as of January 1, 2025 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive income | — | ( | ) | ( | ) | |||||||||||||||||||
| Issuance of stock related to employee compensation plan, net of forfeitures | ||||||||||||||||||||||||
| Issuance of stock related to employee compensation plan, net of forfeitures, shares | ||||||||||||||||||||||||
| Sale of common stock | ||||||||||||||||||||||||
| Financing fees | — | ( | ) | ( | ) | |||||||||||||||||||
| Proceeds from the exercise of warrants | ||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||
| Balances as of March 31, 2025 | ( | ) | ||||||||||||||||||||||
| Balances as of January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive income | — | |||||||||||||||||||||||
| Issuance of stock related to employee compensation plan, net of forfeitures | ||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||
| Balances as of March 31, 2024 | ( | ) | ||||||||||||||||||||||
| Balance | ( | ) | ||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 7 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right of use assets | ||||||||
| Amortization of operating lease liability | ( |
|||||||
| Inventory reserve charge | ( |
) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ||||||
| Inventories | ||||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable | ( |
) | ||||||
| Accrued expenses and other current liabilities | ( |
) | ( |
) | ||||
| Operating lease liabilities | ( |
) | ||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Cash flows from investing activities: | ||||||||
| Sale of marketable securities | ||||||||
| Purchase of equipment | ( |
) | ||||||
| Net cash used in investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Sale of common stock | ||||||||
| Financing fees | ( |
) | ||||||
| Proceeds from exercise of warrants | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of changes in exchange rates on cash and cash equivalents | ||||||||
| Net decrease in cash and cash equivalents and restricted cash | ( |
) | ||||||
| Cash, cash equivalents, and restricted cash – beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash – end of period | $ | $ | ||||||
| Supplemental cash flows disclosures: | ||||||||
| Proceeds from sale of state net operating losses | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Supplemental schedule of noncash activity: | ||||||||
| Right-of-use asset and liability | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 8 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
Note 1. The Company
electroCore, Inc. and its subsidiaries (“electroCore” or the “Company”) is a commercial stage bioelectronic technology company whose mission is to improve health and quality of life through innovative non-invasive bioelectronic technologies.
electroCore, headquartered in Rockaway, NJ,
has
Note 2. Summary of Significant Accounting Policies
| (a) | Basis of Presentation |
The accompanying condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair presentation of the Company’s condensed consolidated financial position and results of operations for the interim periods presented. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2025. The results for the three months ended March 31, 2025, are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.
| (b) | Principles of Consolidation |
The accompanying condensed consolidated financial statements include the accounts of electroCore and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
| (c) | Use of Estimates |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include revenue, licensed products and loss contingencies.
| (d) | Cash, Cash Equivalents and Restricted Cash |
The following table provides a reconciliation of cash, cash equivalents and restricted cash to the balance reflected on the Condensed Consolidated Statement of Cash Flows at March 31, 2025 and December 31, 2024:
Schedule of Cash, Cash Equivalents and Restricted Cash
| (in thousands) | March 31, 2025 | December 31, 2024 | ||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||
As of March 31, 2025, cash equivalents represented funds held in an interest-bearing demand deposit account, U.S. treasury bills, and a money market account.
The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its corporate credit card arrangement with Citibank, N.A.
|
(e) |
Marketable Securities |
Marketable securities are carried at fair value, with
unrealized gains and losses reported as accumulated other comprehensive income, except for losses from impairments which are determined
to be other than temporary. Realized gains and losses and declines in value judged to be other-than-temporary are included in the determination
of net loss and are included in interest and other income net. Fair values are based on quoted market prices at the reporting date. Interest
and dividends on available-for-sale securities are included in Interest and other income. As of March 31, 2025, marketable securities
amounted to $
| 9 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
| (f) | Recent Accounting Standards Pronouncements |
In December 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures which will require companies to make additional income tax disclosures. The pronouncement is effective for annual filings for the year ended December 31, 2025. The Company is still assessing the impact of the adoption of this standard but does not expect it to have a material impact on its results of operations, financial position or cash flows.
On November 2024, the FASB issued Accounting Standards Update (ASU) No. 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses, which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the financial statements. The amendments in this pronouncement will be effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently assessing the potential impacts of adoption on its consolidated financial statements and related disclosures.
Note 3. Liquidity, Significant Risks and Uncertainties
Liquidity
The Company has experienced significant net losses,
and it expects to continue to incur net losses for the near future as it works to increase market acceptance of its gammaCore therapy
and general wellness and human performance products. The Company has never been profitable and has incurred net losses and negative cash
used in operations each year since its inception. The Company incurred net losses of $
The Company has historically funded its operations
from the sale of its securities. During the three months ended March 31, 2025, the Company received net proceeds of approximately $
On November 29, 2024, we entered into an At The Market
Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), whereby the Company
may offer and sell shares of its common stock from time to time having an aggregate offering price of up to $
In 2025, we intend to continue to make targeted investments in sales and marketing to continue driving commercial activities. We have historically funded our operations from the sale of our common stock and may continue to do so through utilization of the at-the-market facility or other equity or debt transactions if needed. As of May 2, 2025, the Company had approximately $ million shares of common stock remaining available for issuance under the Sales Agreement.
The Company’s expected cash requirements for the next 12 months from the date these financial statements are issued and beyond are largely based on the commercial success of its products. Based on its current assessment, the Company believes its Cash Position, and expected cash flow from operations, will enable it to fund its operating expenses and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the accompanying financial statements are issued. There remain significant risks and uncertainties regarding the Company’s business, financial condition and results of operations. The Company’s future capital requirements are difficult to forecast and will depend on many factors that are out of its control. If the Company is unable to achieve its planned operating results or maintain sufficient financial resources, including through potential positive cash flow from operations or supplemental access to third-party debt, equity or hybrid capital, its business, financial condition and results of operations may be materially and adversely affected.
Concentration of Revenue Risks
The Company earns a significant amount of its revenue
in the United States from the United States Department of Veterans Affairs and United State Department of Defense, or VA, pursuant to
its qualifying contract under the Federal Supply Schedule, or FSS, and open market sales to individual VA facilities. For the three months
ended March 31, 2025 and 2024, sales to the VA accounted for
For the three months ended March 31, 2025 and 2024,
Lovell Government Services, or Lovell, accounted for more than
| 10 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
Foreign Currency Exchange
The Company has foreign currency exchange risks related to revenue and operating expenses in currencies other than the local currencies in which it operates. The Company is exposed to currency risk from the potential changes in the functional currency values of its assets, liabilities, and cash flows denominated in foreign currencies.
Note 4. Revenue
The following tables present product net sales disaggregated by Channel and Geographic Market (in thousands):
Schedule of Net Sales Disaggregated By Channel
| Channel: | 2025 | 2024 | ||||||
| Three months ended March 31, | ||||||||
| Channel: | 2025 | 2024 | ||||||
| Rx gammaCore – VA | $ | $ | ||||||
| Rx gammaCore - U.S. Commercial | ||||||||
| Outside the United States | ||||||||
| Truvaga | ||||||||
| Total before TAC-STIM | ||||||||
| TAC-STIM | ||||||||
| Total Net Sales | $ | $ | ||||||
Schedule of Net Slaes Disaggregated By Geographic Market
| Product revenue | 2025 | 2024 | ||||||
| Geographic Market: | Three months ended March 31, | |||||||
| Product revenue | 2025 | 2024 | ||||||
| United States | $ | $ | ||||||
| United Kingdom | ||||||||
| Other | ||||||||
| License revenue | ||||||||
| Japan | ||||||||
| Total Net Sales | $ | $ | ||||||
The Company generally invoices the customer and recognizes revenue once its performance obligations are satisfied, at which point payment is unconditional. Agreed upon payment terms with customers are within 30 days of shipment. Accordingly, contracts with customers do not include a significant financing component.
Note 5. Cash, Cash Equivalents, Restricted Cash and Marketable Securities
The following tables summarize the Company’s cash, cash equivalents, restricted cash and marketable securities as of March 31, 2025 and December 31, 2024.
Schedule of Cash, Cash Equivalents, Restricted Cash and Marketable Securities
| As of March 31, 2025 | ||||||||||||||||
| Amortized Cost | Unrealized Gain | Unrealized (Loss) | Fair Value | |||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | $ | ||||||||||||
| Marketable Securities: | ||||||||||||||||
| U.S. Treasury Bills | ||||||||||||||||
| Total marketable securities | ||||||||||||||||
| Total cash, cash equivalents, restricted cash and marketable securities | $ | $ | $ | $ | ||||||||||||
| As of December 31, 2024 | ||||||||||||||||
| Amortized Cost | Unrealized Gain | Unrealized (Loss) | Fair Value | |||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | $ | ||||||||||||
| Marketable Securities: | ||||||||||||||||
| U.S. Treasury Bills | ||||||||||||||||
| Total marketable securities | ||||||||||||||||
| Total cash, cash equivalents, restricted cash and marketable securities | $ | $ | $ | $ | ||||||||||||
| 11 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
Note 6. Fair Value Measurements
Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy:
| ● | Level 1—Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. | |
| ● | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
A summary of the assets and liabilities carried at fair value in accordance with the hierarchy defined above is as follows:
Summary of Assets and Liabilities Carried at Fair Value
| March 31, 2025 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Fair Value Hierarchy | ||||||||||||||||
| March 31, 2025 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets | ||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | $ | ||||||||||||
| Marketable Securities: | ||||||||||||||||
| U.S. treasury bills | ||||||||||||||||
| Total cash, cash equivalents, restricted cash and marketable securities | $ | $ | $ | $ | ||||||||||||
| December 31, 2024 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Fair Value Hierarchy | ||||||||||||||||
| December 31, 2024 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets | ||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | $ | ||||||||||||
| Marketable Securities: | ||||||||||||||||
| U.S. treasury bills | ||||||||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | $ | $ | ||||||||||||
As of March 31, 2025, the Company’s Marketable securities in the
amount of $
Note 7. Inventories
As of March 31, 2025 and December 31, 2024, inventories consisted of the following:
Schedule of Inventories
| (in thousands) | March 31, 2025 | December 31, 2024 | ||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total inventories | $ | $ | ||||||
The reserve for obsolete inventory was $
Note 8. Leases
For the three months ended March 31, 2025 and 2024,
the Company recognized lease expenses of approximately $
On February 6, 2024, the Company entered into The
First Amendment to Lease Agreement (the “Rockaway Amendment”) to extend its Rockaway, New Jersey lease for an additional
| 12 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
Supplemental Balance Sheet Information for Operating Leases:
Schedule of Operating Leases
| (in thousands) | March 31, 2025 | December 31, 2024 | ||||||
| Operating leases: | ||||||||
| Operating lease right of use assets | $ | $ | ||||||
| Operating lease liabilities: | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Noncurrent operating lease liabilities | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term (in years) | ||||||||
| Weighted average discount rate | % | % | ||||||
Future lease payments as of March 31, 2025:
Schedule of Future Lease Payments
| (in thousands) | |||||
| Remainder of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 and thereafter | |||||
| Total future lease payments | |||||
| Less: Amounts representing interest | ( | ) | |||
| Total | $ | ||||
Note 9. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities as of March 31, 2025 and December 31, 2024 consisted of the following:
Schedule of Accrued Expenses and Other Current Liabilities
| (in thousands) | March 31, 2025 | December 31, 2024 | ||||||
| Accrued professional fees | $ | $ | ||||||
| Accrued bonuses and incentive compensation | ||||||||
| Accrued litigation legal fees | ||||||||
| Accrued insurance expense | ||||||||
| Accrued research and development expenses | ||||||||
| Accrued vacation and other employee related expenses | ||||||||
| Accrued tax expenses | ||||||||
| Deferred revenue | ||||||||
| Other | ||||||||
| Accrued expenses and other current liabilities | $ | $ | ||||||
Finance and Security Agreement
On July 2, 2024, the Company
entered into a Commercial Insurance Premium Finance and Security Agreement (the “2024 Agreement”). The 2024 Agreement provides
for a single borrowing of approximately $
During the three months ended
March 31, 2025 and 2024, the Company recognized $
Note 10. Shareholders’ Equity
At-the-Market Facility
On November 29, 2024, we entered into the Sales Agreement
with Wainwright. Under the Sales Agreement, the Company may offer and sell shares of its common stock, par value $ per share, from
time to time having an aggregate offering price of up to $
| 13 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
Stock Purchase Warrants
The following table presents a summary of stock purchase warrants outstanding as of March 31, 2025.
Schedule of Stock Purchase Warrants Outstanding
| Number of Warrants (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
| Outstanding, January 1, 2025 | $ | $ | ||||||||||||||
| Stock purchase warrants granted | — | |||||||||||||||
| Exercised | — | |||||||||||||||
| Expired | — | |||||||||||||||
| Outstanding, March 31, 2025 | $ | $ | ||||||||||||||
| Exercisable, March 31, 2025 | $ | $ | ||||||||||||||
A total of pre-funded warrants were excluded from this table. During the three months ended March 31, 2025 investors exercised pre-funded warrants.
Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding adjusted to give effect to potentially dilutive securities. Due to their nominal exercise price of $ per share, pre-funded warrants are considered common stock equivalents and are included in weighted average shares outstanding in the accompanying condensed consolidated statement of operations as of the applicable purchase date. Stock unit awards, stock options, and warrants (other than the pre-funded warrants) have not been included in the diluted loss per share calculation as their inclusion would have had an anti-dilutive effect.
Schedule of Common Stock Equivalent from the Computation of Diluted Loss Per Share
| Three months ended March 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Stock options | ||||||||
| Stock units | ||||||||
| Stock purchase warrants | ||||||||
| Total | ||||||||
Note 12. Income Taxes
The Company may be eligible, from time to time, to
receive cash from the sale of its net operating losses under New Jersey’s Department of the Treasury - Division of Taxation NOL
Transfer Program. For the three months ended March 31, 2025 and 2024, the Company received net cash payments of $
Schedule of Outstanding Stock Options
| Number of Options (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||
| Outstanding, March 31, 2025 | $ | $ | |||||||||||||||
| Exercisable, March 31, 2025 | $ | $ | |||||||||||||||
The intrinsic value is calculated as the difference between the fair market value at March 31, 2025 and the exercise price per share of the stock option. The options granted to employees generally vest over a three year period.
| 14 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
Schedule of Restricted and Deferred Stock Units
Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | |||||||
| Outstanding, January 1, 2025 | $ | |||||||
| Granted | ||||||||
| Vested and delivered | ( | ) | ||||||
| Cancelled | ( | ) | ||||||
| Outstanding, March 31, 2025 | $ | |||||||
In general, Stock Units granted to employees vest over two to four-year periods.
Immediately following the Company’s annual meeting of stockholders, the Company generally grants each non-employee director an equity award that vests over a -month period. Upon a non-employee director’s initial appointment or election to the board of directors, the Company grants such non-employee director an equity award subject to vesting as determined by the board of directors.
Schedule of Stock Compensation Expenses
| (in thousands) | 2025 | 2024 | ||||||
| Three months ended March 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Selling, general and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Cost of goods sold | ||||||||
| Total expense | $ | $ | ||||||
Total unrecognized compensation cost related to unvested awards as of March 31, 2025 was $ million and is expected to be recognized over the next .
Note 14. Commitments and Contingencies
The Company may be a party to various legal proceedings and claims arising out of the ordinary course of its business. Although the final results of all such matters and claims cannot be predicted with certainty, the Company currently believes that there are no current proceedings or claims pending against it the ultimate resolution of which would have a material adverse effect on its financial condition or results of operations. However, should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, such matters could have a material adverse effect on the Company’s operating results and cash flows for that particular period. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, “Contingencies.” Legal costs are expensed as incurred.
Note 15. Related Party Transactions
In 2023, an executive of the Company co-founded the
Vagus Nerve Society, a society dedicated to the ongoing education and training of scientists and clinicians and the power of the vagus
nerve and its application in a broad spectrum of health-related conditions. During the first quarter of 2025, the Company incurred aggregate
expenses of $
Note 16. Segment Reporting
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker (CODM), or decision-making group, in deciding how to allocate resources and in assessing performance. electroCore is a commercial stage bioelectronic technology company whose mission is to improve health and quality of life through innovative non-invasive bioelectronic technologies. The Company views its operations and manages its business as one operating segment: Bioelectronic Innovations. The accounting policies of the Bioelectronic Innovations segment are the same as those described in Note 2. Summary of Significant Accounting Policies.
Our CODM is our Chief Executive Officer. The CODM uses loss from operations, as reported on our Consolidated Statements of Operations, in evaluating the performance of the Bioelectronic Innovations segment and in determining how to allocate resources to the Company as a whole, The CODM does not review assets in evaluating the results of the Bioelectronic Innovations segment, and therefore, such information is not presented below.
| 15 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
The following table provides the non-GAAP operating financial results of the Bioelectronic Innovations segment:
Schedule of Operating Financial Segment
| 2025 | 2024 | |||||||
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net sales * | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (income) expense | ||||||||
| Interest and other income | ( | ) | ( | ) | ||||
| Other expense | ||||||||
| Total other (income) expense | ( | ) | ||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Benefit from income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| * |
Note 17. Subsequent Events
On May 1, 2025 (the “Closing Date”), the Company completed its previously announced acquisition of NURO (following consummation of the Merger (as defined below), the “Surviving Corporation”), pursuant to the terms of the Agreement and Plan of Merger, dated as of December 17, 2024 (the “Merger Agreement”), by and among the Company, NURO, and Nexus Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”).
Pursuant to the Merger Agreement, on the Closing Date, Merger Sub merged with and into NURO, with NURO surviving as a wholly-owned subsidiary of the Company (the “Merger”).
At the effective time (the “Effective Time”) of the Merger, each share of common stock, par value $ per share, of NURO (the “NURO Common Stock”) outstanding immediately prior to the Effective Time (including each share of NURO Common Stock underlying a NURO RSA or NURO RSU (as such terms are defined below)), was canceled and converted into the right to receive from the Surviving Corporation (i) an amount in cash equal to $ per share of NURO Common Stock (the “Per Share Cash Consideration”) and (ii) one contingent value right (a “CVR”), representing the right to receive certain contingent payments, subject to the terms and conditions set forth in the CVR Agreement dated May 1, 2025, by and between the Company and Equiniti Trust Company, LLC (the “CVR Agreement”) (the consideration contemplated by (i) and (ii), together, the “Merger Consideration”). Any shares of NURO Common Stock held by NURO as treasury stock or owned by the Company, Merger Sub, or any other subsidiary of the Company or NURO immediately prior to the Effective Time, were canceled, and no payment was made with respect thereto.
The foregoing description of the CVR Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the CVR Agreement.
All issued and outstanding shares of NURO’s preferred stock, par value $ per share (the “NURO Preferred Stock”) outstanding immediately prior to the Effective Time will continue to be outstanding after the Effective Time, except that thereafter, such shares of NURO Preferred Stock will, in accordance with their own terms, no longer be convertible into NURO Common Stock, but will instead be convertible into the right to receive from the Surviving Corporation the Merger Consideration payable in respect of the shares of NURO Common Stock into which such shares of NURO Preferred Stock would have been convertible immediately prior to the Effective Time.
At the Effective Time, outstanding awards of restricted stock with respect to shares of NURO Common Stock (each, a “NURO RSA”), that were outstanding and unvested immediately prior to the Effective Time, were converted into the right to receive consideration as follows (notwithstanding any vesting conditions, restrictions or risk of forfeiture): (i) each NURO RSA for which the holder thereof made a timely and valid election (an “83(b) Election”) under Section 83(b) of the Internal Revenue Code of 1986, as amended, was canceled and converted into the right to receive the Merger Consideration with respect to each share of NURO Common Stock subject to such NURO RSA in accordance with the Merger Agreement and the CVR Agreement; and (ii) each NURO RSA for which the holder thereof did not make a timely and valid 83(b) Election was canceled and converted into the right to receive (a) an amount in cash (without interest and subject to deduction for any required withholding as contemplated by the Merger Agreement) equal to: (A) the total number of shares of such NURO RSAs multiplied by (B) the Per Share Cash Consideration, without any interest thereon, and (b) one CVR with respect to each share of NURO Common Stock subject to such NURO RSAs immediately prior to the Effective Time.
At the Effective Time, each stock option granted by NURO to purchase NURO Common Stock (each, a “NURO Option”) that was outstanding and unvested immediately prior to the Effective Time (whether time- or performance-based) fully vested and became exercisable, and (i) each NURO Option that was then outstanding and unexercised immediately prior to the Effective Time, and which had a per share exercise price that was less than the Per Share Cash Consideration, was canceled and converted into the right to receive the sum of an amount in cash (without interest and subject to deduction for any required withholding as contemplated in the Merger Agreement) equal to: (a) the excess, if any, of the Per Share Cash Consideration over the exercise price per share of such NURO Option; multiplied by the number of shares of NURO Common Stock underlying such NURO Option and (b) one CVR, and (ii) each NURO Option that was then outstanding and unexercised immediately prior to the Effective Time, and which had a per share exercise price that was equal to or greater than the Per Share Cash Consideration, was canceled with no consideration payable in respect thereof.
At the Effective Time, each NURO restricted stock unit (“NURO RSU”) that was outstanding immediately prior to the Effective Time, was automatically canceled and converted into the right to receive (i) an amount in cash equal to the product of (A) the number of shares of NURO Common Stock then underlying such NURO RSU multiplied by (B) the Per Share Cash Consideration, without any interest thereon and (ii) one CVR with respect to each share of NURO Common Stock subject to such NURO RSU.
At the Effective Time, subject to NURO’s Amended and Restated Management Retention and Incentive Plan (the “MRIP”) and subject to NURO’s receipt of an executed general release of claims, each eligible participant in the MRIP (a “Participant”) received the right to receive from the Surviving Corporation: (a) an amount in cash equal to (i) such Participant’s percentage interest set forth in the MRIP, multiplied by (ii) the aggregate cash consideration payable pursuant to the Merger Agreement; and (b) upon the making of any Distributions (as defined in the CVR Agreement) pursuant to the CVR Agreement, such amounts in cash equal to (i) such Participant’s percentage interest set forth in the MRIP, multiplied by (ii) the Pre-MRIP Adjusted Proceeds in respect of the applicable Distribution Period (as each such term is defined in the CVR Agreement).
The foregoing description of the Merger does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement.
| 16 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read this section in conjunction with our unaudited interim condensed consolidated financial statements and related notes included in this Quarterly Report and our audited consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 included in our Annual Report. As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those under the caption “Risk Factors” in the aforementioned Annual Report and this Quarterly Report.
We are a commercial stage bioelectronic technology company whose mission is to improve health and quality of life through innovative non-invasive bioelectronic technologies.
Non-invasive vagus nerve stimulation or nVNS, a form of bioelectronic technology, modulates neurotransmitters through its effects on both the peripheral and central nervous systems. Our nVNS treatment is delivered through a proprietary high-frequency burst waveform that safely and comfortably passes through the skin and stimulates therapeutically relevant fibers in the vagus nerve. Various scientific publications suggest that nVNS works through a variety of mechanistic pathways including the modulation of neurotransmitters.
Historically, vagus nerve stimulation or VNS, required an invasive surgical procedure to implant a costly medical device. This has generally limited VNS from being used by anyone other than the most severe patients. Our non-invasive bioelectronic nVNS technologies es are self-administered and intended for regular or intermittent use over many years.
Our capabilities include product development, regulatory affairs and compliance, sales and marketing, product testing, electromechanical assembly, fulfillment, and customer support. We derive revenues from the sale of products in the United States and select overseas markets. We have two principal product categories:
| ● | Handheld, personal use bioelectronic therapies for the management and treatment of certain medical conditions such as primary headache; and | |
| ● | Handheld, personal use consumer products utilizing bioelectronic technologies to promote general wellness and human performance. |
We believe our bioelectronic technologies may be used in the future to effectively treat additional medical conditions.
Our goal is to be a leader in non-invasive neuromodulation to deliver better health. To achieve this, we offer multiple propositions:
| ● | Prescription gammaCore bioelectronic therapy for the treatment of certain prescription FDA cleared medical conditions such as primary headache; | |
| ● | Truvaga for the support of general health and wellbeing; and | |
| ● | TAC-STIM for human performance. |
Our flagship gammaCore Sapphire is a prescription medical device using our bioelectronic therapy that is FDA cleared for a variety of primary headache conditions. gammaCore is available by prescription only and Sapphire is a portable, reusable, rechargeable and reloadable personal use option for patients to use at home or on the go. Prescriptions are written by a health care provider and dispensed from a specialty pharmacy, through the patient’s healthcare system, or shipped directly to certain patients in the United States from our facility in Rockaway, NJ. After the initial prescription is filled, access to additional therapy can be refilled for certain of our gammaCore products through the input of a prescription-only authorization.
We offer two versions of our bioelectronic technology to support general health and wellbeing. Truvaga 350 is a personal use consumer electronics general wellness product and Truvaga Plus, which was launched in April 2024, is our next generation, app-enabled general wellness product. Neither product requires a prescription, and are available direct-to-consumer from electroCore at www.truvaga.com or through online retailers such as Amazon.com.
TAC-STIM handset is a form of nVNS for human performance and has been developed in collaboration with the United States Department of Defense Biotech Optimized for Operational Solutions and Tactics, or BOOST program. TAC-STIM handsets are available as a Commercial Off the Shelf (COtS) solution to professional organizations and are the subject of ongoing research and evaluation within the United States Air Force Special Operations Command, the United States Army Special Operations Command and at the United States Air Force Research Laboratory.
Truvaga and TAC-STIM are intended for general wellness in compliance with the FDA guidance document entitled “General Wellness: Policy for Low-Risk Devices; Guidance for Industry and FDA Staff, issued on September 27, 2019.” Truvaga and TAC-STIM handsets are not intended to diagnose, treat, cure, or prevent any disease or medical condition.
Our two largest customers by revenue are the United States Department of Veterans Affairs and United States Department of Defense, or VA, and the United Kingdom National Health Service, or NHS, utilizing our FDA cleared and CE marked product, gammaCore.
| 17 |
Sales to the VA comprised 70.3% of our revenue during the three months ended March 31, 2025. The majority of our 2024 sales were made pursuant to our qualifying contract under the Federal Supply Schedule, or FSS, which was secured by us in December 2018 (the “Original FSS Contract”), as well as open market sales to individual facilities within the government channel. The initial term of our Original FSS contract has been extended through June 14, 2025. In March 2025, we entered into a new FSS contract which will become effective on June 15, 2025, and run through June 14, 2030.
In August 2023, we signed a non-exclusive distribution agreement with Lovell providing Lovell the right to list and distribute certain gammaCore products into the federal market. Lovell is a Service-Disabled Veteran-Owned Small Business (SDVOSB) offering medical and pharmaceutical goods and services to federal healthcare providers. Listing products with Lovell is intended to streamline the sales process to a variety of government procurement channels through Lovell’s compliance with contracting regulations and its provision of logistical solutions connected directly into government contracting portals, all of which are intended to help government agencies meet their SDVOSB procurement goals. Customers for these vehicles are federal healthcare systems such as the Veterans Health Administration (VHA, which includes the VA), the Military Health System (MHS), and Indian Health Services (IHS), which we believe serve up to approximately 21 million patients combined.
Between November 2023 and January 2024, certain gammaCore products were added to the FSS, the VA Distribution and Pricing Agreement (DAPA), GSA Advantage, and Defense Logistics Agency’s ECAT system procurement portals through the Lovell contract vehicles, enabling the purchase of gammaCore products within the government channel and throughout the federal markets, including, but not limited to, the VA. The gammaCore products offered through Lovell provide government customers with similar product configuration options to those currently sold through our existing FSS contract, new FSS contract and open market sales made directly to individual VA facilities. We expect an increasing portion of our 2025 sales will be made pursuant to the distribution agreement with Lovell and its contract vehicles as well as through our new FSS contract, and our sales function in this channel is comprised of employees and an increasing number of independent contractors.
Sales under the UK Med Tech Funding Mandate, or MTFM, for cluster headache in the UK comprised 5.3% of our revenue during the three months ended March 31, 2025. We plan on continuing use of this program. In 2023, NHS granted a two-year extension in which our prescription gammaCore therapy will continue to be listed in the NHS catalog. This extension is through March 17, 2026 with an option for us to extend an additional two years. In 2025, we expect NICE to review the guidance document and any changes in recommendation or pricing may adversely impact our ability to work with NHS England on the MTFM program and could have an adverse impact on our financial results. We continue to utilize distribution partners to commercialize our nVNS technology in selected territories outside the United States and United Kingdom.
We believe there may be significant opportunities beyond these two areas. Specifically, we believe there may be a large commercial opportunity for our gammaCore bioelectronic therapy with additional insurance covered lives, cash pay, physician dispense, and direct-to-consumer approaches, along with wellness and human performance propositions through our Truvaga and TAC-STIM handsets. Therefore, we will continue our investments to expand our efforts in these channels and markets in 2025.
On December 17, 2024, we entered into a definitive agreement to acquire NeuroMetrix, Inc. (“NURO”). NURO is a commercial stage healthcare company that develops and commercializes neurotechnology devices to address unmet needs in the chronic pain market through its Quell® platform: a wearable, app and cloud-enabled neuromodulation platform that is indicated for the treatment of fibromyalgia symptoms (Quell Fibromyalgia) and lower-extremity chronic pain (Quell 2.0). The transaction closed on May 1, 2025. The transaction does not include NURO’s DPNCheck® technology and business, which was divested by NURO prior to closing of the transaction.
We face a variety of challenges and risks that we will need to address and manage as we pursue our strategies, including our ability to develop and retain an effective sales force, achieve market acceptance of our gammaCore medical device among clinicians, patients, and third-party payers, expand the use of our gammaCore medical device to additional therapeutic indications, and to develop our nascent wellness and human performance business including the launch of Truvaga Plus, our next generation app-enabled device under the Truvaga brand.
As we continue to pursue opportunities in both U.S. and select international markets, we remain subject to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Uncertainties and changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials and components used in our manufacturing and assembly processes. We intend to monitor these developments and are actively implementing contingency plans, including alternative sourcing strategies and supplier diversification, to support supply chain continuity, maintain operational efficiency, and help mitigate potential future impacts.
Because of the numerous risks and uncertainties associated with our commercialization efforts, as well as research and product development activities, there may be uncertainty regarding our ability to achieve or maintain profitability. If we fail to become profitable or are unable to sustain profitability, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
Our expected cash requirements for the next 12 months and beyond are based on the commercial success of our products and our ability to control operating expenses. There are significant risks and uncertainties as to our ability to achieve these operating results. Due to these risks and uncertainties, we may need to reduce our activities significantly more than our current operating plan and cash flow projections assume in order to fund operations for the next 12 months. There can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and, ultimately potentially cease operations. See also “Liquidity Outlook.”
| 18 |
Critical Accounting Estimates
The preparation of our financial statements is in accordance with accounting principles generally accepted in the United States of America, or GAAP, which require us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and other related disclosures. While we believe our estimates, assumptions and judgments are reasonable, they are based on information presently available. Actual results may differ significantly from these estimates due to changes in judgments, assumptions and conditions as a result of unforeseen events or otherwise, which could have a material impact on our financial position and results of operations.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. The critical accounting estimates, that we believe have the greatest potential impact on the condensed consolidated financial statements are disclosed in the section titled Critical Accounting Policies and Estimates in Part II of our Annual Report.
Results of Operations
Comparison of the three months ended March 31, 2025 to the three months ended March 31, 2024
The following table sets forth amounts from our condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:
| For the three months ended March 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| (in thousands) | ||||||||||||
| Consolidated statements of operations: | ||||||||||||
| Net sales | $ | 6,719 | $ | 5,443 | $ | 1,276 | ||||||
| Cost of goods sold | 1,013 | 888 | 125 | |||||||||
| Gross profit | 5,706 | 4,555 | 1,151 | |||||||||
| Gross margin | 85 | % | 84 | % | ||||||||
| Operating expenses | ||||||||||||
| Research and development | 642 | 399 | 243 | |||||||||
| Selling, general and administrative | 8,886 | 8,005 | 841 | |||||||||
| Total operating expenses | 9,528 | 8,404 | 1,084 | |||||||||
| Loss from operations | (3,822 | ) | (3,849 | ) | 67 | |||||||
| Other (income) expense | ||||||||||||
| Interest and other income | (83 | ) | (225 | ) | 142 | |||||||
| Other expense | 164 | 4 | 160 | |||||||||
| Total other expense (income) | 81 | (221 | ) | 342 | ||||||||
| Loss before income taxes | (3,903 | ) | (3,628 | ) | (275 | ) | ||||||
| Benefit from income taxes | 48 | 122 | (74 | ) | ||||||||
| Net loss | $ | (3,855 | ) | $ | (3,506 | ) | $ | (349 | ) | |||
Net Sales
Net sales for the three months ended March 31, 2025 increased 23% as compared to the three months ended March 31, 2024. The increase of $1.3 million is due to an increase in net sales of Rx gammaCore sold into the VA and outside the United States and revenue from the sales of our nonprescription general wellness Truvaga products. We expect that the majority of our remaining 2025 fiscal year revenue will continue to come from the prescription gammaCore sold into the VA and the Truvaga direct-to-consumer product offering. See the above Overview for discussion regarding our FSS contract with the VA.
| 19 |
The following table sets forth our product net sales:
| (in thousands) | Three months ended March 31, | |||||||
| Product | 2025 | 2024 | ||||||
| Rx gammaCore - VA | $ | 4,721 | $ | 3,875 | ||||
| Rx gammaCore - U.S. Commercial | 289 | 433 | ||||||
| Outside the United States | 513 | 449 | ||||||
| Truvaga | 1,106 | 385 | ||||||
| Total before TAC-STIM | 6,629 | 5,142 | ||||||
| TAC-STIM | 90 | 301 | ||||||
| Total Revenue | $ | 6,719 | $ | 5,443 | ||||
Gross Profit
Gross profit increased by $1.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Gross margin was 85% and 84% for the three months ended March 31, 2025 and 2024, respectively. The increase in gross profit is attributable to the increased net sales and product mix. Gross profit and gross margin for the remainder of 2025 will be largely dependent on revenue levels, product mix, and any changes in the estimated useful lives of licensed devices.
Research and Development
Research and development expense in the first quarter of 2025 was $0.6 million, as compared to $0.4 million in the first quarter of 2024. This increase was primarily due to an increase in headcount and effects of discontinuing certain clinical trial activities in the first quarter of 2024 that did not repeat in the first quarter of 2025. For the remainder of 2025, we expect our research and development expense to be higher than the comparable periods in 2024.
Selling, General and Administrative
Selling, general and administrative expense of $8.9 million for the three months ended March 31, 2025 increased by $0.9 million, or 11%, as compared to $8.0 million for the previous year period. This increase was primarily due to our greater investment in selling and marketing costs consistent with our increase in sales and an increase in separation costs associated with select headcount reductions. For the remainder of 2025, we plan on continuing to make targeted investments in sales and marketing to support our commercial efforts, particularly around sales and marketing efforts across all major U.S. channels.
Other Expense (Income)
Total other expense was $81,000 for the three months ended March 31, 2025, which consisted primarily of non-recurring expenses, as compared to and total other income of $221,000 for the three months ended March 31, 2024, which consisted primarily of interest income.
Benefit from Income Taxes
We may be eligible, from time to time, to receive cash from the sale of our net operating losses under New Jersey’s Department of the Treasury - Division of Taxation NOL Transfer Program. During the three months ended March 31, 2025, the Company received a net cash payment of $48,000 from the sale of its New Jersey state net operating losses as compared to a net cash payment of $122,000 from the sale of New Jersey net operating loss for the three months ended March 31, 2024.
Cash Flows
The following table sets forth the significant sources and uses of cash for the periods noted below:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Net cash (used in) provided by | ||||||||
| Operating activities | $ | (4,355 | ) | $ | (2,558 | ) | ||
| Investing activities | $ | 4,500 | $ | — | ||||
| Financing activities | $ | 180 | $ | — | ||||
| 20 |
Operating Activities
Net cash used in operating activities was $4.4 million and $2.6 million for the three months ended March 31, 2025 and 2024, respectively. This increase is primarily due to the decrease in our net loss adjusted for non-cash expense items and certain working capital changes consisting primarily of decreases in accrued expenses and operating lease liabilities and increases in inventories and prepaid expenses and other assets.
Investing Activities
During the three months ended March 31, 2025, net cash provided by investing activities was $4.5 million from the sale of marketable securities.
Financing Activities
During the three months ended March 31, 2025, net cash provided by financing activities was $0.2 million which was attributable to utilization of our at-the-market facility pursuant to the Sales Agreement.
Liquidity Outlook
We have experienced significant net losses, and we expect to continue to incur net losses for the near future as we work to increase market acceptance of our gammaCore therapy and general wellness and human performance products. We have never been profitable and we have incurred net losses and negative cash used in operations in each year since our inception. We incurred net losses of $3.9 million and $3.5 million and used cash in our operations of $4.4 million and $2.6 million for the three months ended March 31, 2025 and 2024, respectively.
We have historically funded our operations from the sale of our securities. During the three months ended March 31, 2025, we received net proceeds of approximately $0.2 million from such sales and as of March 31, 2025, our cash, cash equivalents, restricted cash and marketable securities totaled $8.0 million.
On November 29, 2024, we entered into an At The Market Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), whereby the Company may offer and sell shares of its common stock from time to time having an aggregate offering price of up to $20 million by any method deemed to be an “at-the-market” offering as defined in Rule 415 of the Securities Act, or any other method specified in the Sales Agreement. During the three months ended March 31, 2025, the Company sold 14,265 shares of its common stock at a weighted average price of $15.20 per share, net of issuance costs for $0.2 million in net proceeds, pursuant to the Sales Agreement.
In 2025, we intend to continue to make targeted investments in sales and marketing to continue driving commercial activities. We have historically funded our operations from the sale of our common stock and may continue to do so through utilization of the at-the-market facility or other equity or debt transactions if needed. As of May 2, 2025, the Company had approximately $19.8 million shares of common stock remaining available for issuance under the Sales Agreement.
The Company’s expected cash requirements for the next 12 months from the date these financial statements are issued and beyond are largely based on the commercial success of its products. Based on its current assessment, the Company believes its cash, cash equivalents, restricted cash marketable securities, and expected cash flow from operations for such period will enable it to fund its operating expenses and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the accompanying financial statements are issued. There remain significant risks and uncertainties regarding the Company’s business, financial condition and results of operations. The Company’s future capital requirements are difficult to forecast and will depend on many factors that are out of its control. If the Company is unable to achieve its planned operating results or maintain sufficient financial resources, including through potential positive cash flow from operations or supplemental access to third-party debt, equity or hybrid capital, its business, financial condition and results of operations may be materially and adversely affected.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We develop our products in the United States and sell those products into several countries. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. Most of our sales in Europe are denominated in British Pound Sterling and our license agreement with Teijin Limited is denominated in Japanese Yen. As our sales in currencies other than the U.S. dollar increase, our exposure to foreign currency fluctuations may increase. In addition, changes in exchange rates also may affect the end-user prices of our products compared to those of our foreign competitors, who may be selling their products based on local currency pricing. These factors may make our products less competitive in some countries.
If the U.S. dollar uniformly increased or decreased in strength by 10% relative to the foreign currencies in which our sales were denominated, our net income would have correspondingly increased or decreased by an immaterial amount for the three months ended March 31, 2025.
Our exposure to market interest rate risk is confined to our cash and cash equivalents and marketable securities. The goals of our investment policy are preservation of capital, fulfillment of liquidity needs and fiduciary control of cash and investments. We also seek to maximize income from our investments without assuming significant risk. To achieve our goals, we may maintain a portfolio of cash equivalents and investments in a variety of securities of high credit quality. The securities in our investment portfolio, if any, are not leveraged, are classified as available for sale and are, due to their very short-term nature, subject to minimal interest rate risk. We currently do not hedge interest rate exposure. Because of the short-term maturities of our cash equivalents, we do not believe that an increase in market rates would have any material negative impact on interest income recognized in our statement of operations. We have no investments denominated in foreign currencies and therefore our investments are not subject to foreign currency exchange risk. We contract with investigational sites, suppliers and other vendors in Europe and internationally. In addition, our license agreement requires payments to us to be denominated in Japanese Yen. We are subject to fluctuations in foreign currency rates in connection with these agreements. We do not hedge our foreign currency exchange rate risk.
All of the potential changes noted above are based on sensitivity analyses performed on our financial position as of March 31, 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decision making regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.
As required by Rule 13a-15(b) of the Exchange Act, an evaluation as of March 31, 2025 was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of March 31, 2025 were effective for the purposes stated above.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the three months ended March 31, 2025 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
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PART II— OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The information set forth in Note 14. Contingencies of the condensed consolidated financial statements included in this Quarterly Report is incorporated here by reference to this Part II Item 1.
Item 1A.
RISK FACTORS
You should carefully consider the risk factors included in Item 1A. of our Annual Report and the other information in this Quarterly Report, including the section of this Quarterly Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in our Annual Report and the risks described elsewhere in this Quarterly Report occur, our business, operating results and financial condition could be seriously harmed. This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described in our Annual Report and elsewhere in this Quarterly Report.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
(a) Not applicable.
(b) Not applicable.
(c) Trading Plans.
During the quarter ended March 31, 2025, no director
or Section 16 officer
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Item 6. EXHIBITS
| * |
Filed herewith.
|
| ** | The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report are not deemed filed with the SEC and are not to be incorporated by reference into any filing of electroCore, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date of this Annual Report, irrespective of any general incorporation language contained in such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.
| Company Name | ||
| Date: May 7, 2025 | By: | /s/ DANIEL S. GOLDBERGER |
| Daniel S. Goldberger | ||
|
Chief Executive Officer (Principal Executive Officer) | ||
| Date: May 7, 2025 | By: | /s/ JOSHUA S. LEV |
| Joshua S. Lev | ||
|
Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| 25 |
EXHIBIT 31.1
CERTIFICATION
I, Daniel S. Goldberger, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of electroCore, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 7, 2025 | /s/ DANIEL S. GOLDBERGER |
| Daniel S. Goldberger | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
I, Joshua S. Lev, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of electroCore, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 7, 2025 | /s/ JOSHUA S. LEV |
| Joshua S. Lev | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of electroCore, Inc, (the “Company”) for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Daniel S. Goldberger, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to the best of my knowledge:
1. The Report complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: May 7, 2025 | /s/ DANIEL S. GOLDBERGER |
| Daniel S. Goldberger | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of electroCore, Inc. (the “Company”) for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Joshua S. Lev, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: May 7, 2025 | /s/ JOSHUA S. LEV |
| Joshua S. Lev | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |