electroCore, Inc.

Previous wording

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.

Current wording

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 Quarterly Report for the period ended March 31, 2025,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.

Previous wording

We are a commercial stage bioelectronic technology company whose mission is to improve health and quality of life through innovative non-invasive bioelectronic technologies.

Current wording

We are a commercial stage bioelectronic technology company whose mission is to improve health and quality of life through innovative non-invasive bioelectronic technologies. The Company’s two leading prescription products, gammaCore non-invasive vagus nerve stimulation (“nVNS”) and Quell neurostimulator (“Quell”), treat chronic pain syndromes through non-invasive neuromodulation technology Additionally, the Company commercializes its Truvaga products, handheld, personal use nVNS products, utilizing bioelectronic technologies, to promote general wellness and human performance.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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 are self-administered and intended for regular or intermittent use over many years.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

The 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.

Previous wording

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.

Current wording

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. We began offering Quell Fibromyalgia to our VA customers in May 2025.

Previous wording

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.

Current wording

Sales to the VA comprised 71.8% and 71.1% of our revenue during the three and six months ended June 30, 2025, respectively. 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. In March 2025, we entered into a new FSS contract which became effective on June 15, 2025, and runs through June 14, 2030.

Previous wording

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.

Current wording

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. In May 2025, we added Quell Fibromyalgia to the Lovell contracting platform.

Previous wording

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.

Current wording

Sales under the UK Med Tech Funding Mandate, or MTFM, for cluster headache in the UK comprised 4.9% and 5.1% of our revenue during the three and six months ended June 30, 2025, respectively. 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.

Previous wording

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.

Current wording

We believe there may be significant opportunities beyond these two areas. Specifically, we believe there may be a large commercial opportunity for our gammaCore and Quell bioelectronic therapies 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.

Previous wording

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.

Current wording

On May 1, 2025, we acquired 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 excluded NURO’s DPNCheck® technology and business, which was divested by NURO prior to closing of the transaction.

Previous wording

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.

Current wording

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 medical devices to additional therapeutic indications, and to develop our nascent wellness and human performance businesses.

Previous wording

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.

Current wording

Gross profit increased by $1.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Gross margin was 87% and 86% for the three months ended June 30, 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.

Previous wording

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.

Current wording

Net sales for the six months ended June 30, 2025 increased 22% as compared to the six months ended June 30, 2024. The increase of $2.5 million is due to an increase in net sales of prescription products 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 products 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.

Previous wording

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.

Current wording

Research and development expense for the six months ended June 30, 2025 was $1.2 million, as compared to $1.0 million during the six months ended June 30, 2024. This increase was primarily due to an increase in headcount and certain clinical trial activities in the first quarter of 2025 as compared to the first quarter of 2024. For the remainder of 2025, we expect our research and development expense to be higher than the comparable periods in 2024.

Previous wording

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.

Current wording

Selling, general and administrative expense of $18.3 million for the six months ended June 30, 2025 increased by $3.0 million, or 20%, as compared to $15.3 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, an increase in separation costs associated with select headcount reductions, bad debt expense associated with a TAC-STIM receivable, increased expenses associated with professional fees, and increased rent expense associated with the lease expansion. 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.

Previous wording

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.

Current wording

Total other expense was $246,000 for the six months ended June 30, 2025, which consisted primarily of non-recurring expenses, including professional fees in connection with the NURO acquisition, as compared to total other income of $157,000 for the six months ended June 30, 2024, which consisted primarily of interest income.

Previous wording

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.

Current wording

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. For the six months ended June 30, 2025 and 2024 the Company received net cash payments of $48,000 and $122,000, respectively, from the sale of its New Jersey state net operating losses.

Previous wording

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.

Current wording

Net cash used in operating activities was $5.0 million and $4.3 million for the six months ended June 30, 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.

Previous wording

During the three months ended March 31, 2025, net cash provided by investing activities was $4.5 million from the sale of marketable securities.

Current wording

Net cash provided by investing activities was $4.7 million and $3.9 million for the six months ended June 30, 2025 and 2024, respectively. This increase is primarily due to proceeds from the sale of marketable securities.

Previous wording

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.

Current wording

During the six months ended June 30, 2025, net cash provided by financing activities was $0.2 million attributable to utilization of our at-the-market facility pursuant to the Sales Agreement. During the six months ended June 30, 2024, net cash provided by financing activities was $8.1 million which was attributable to the entering into a registered direct offering and concurrent private placements, which closed on June 5, 2024.

Previous wording

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.

Current wording

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 $7.5 million and $6.2 million and used cash in our operations of $5.0 million and $4.3 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

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.

Current wording

We have historically funded our operations from the sale of our securities. During the six months ended June 30, 2025, we received net proceeds of approximately $0.2 million from such sales and as of June 30, 2025, our cash, cash equivalents, restricted cash and marketable securities totaled $7.4 million.

Previous wording

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.

Current wording

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 six months ended June 30, 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.

Previous wording

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.

Current wording

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 most recently the convertible debt financing with Avenue, and may continue to do so through utilization of the at-the-market facility or other equity or debt transactions if needed. As of the date of this Quarterly Report, the Company had approximately $19.8 million of common stock remaining available for issuance under the Sales Agreement.

Previous wording

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.

Current wording

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, and marketable securities, plus the net proceeds from Tranche 1 of the Term Loan, and expected cash flow from operations and access to capital through the use of the ATM and Tranche 2 of the Term Loan 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.