[Call Starts Abruptly] As part of our ongoing efforts to reduce costs and drive profitability, management has opted to host this earnings call on Zoom rather than using a more costly service provider. This will be our first time hosting the call independently, so we appreciate your patience as we work through any potential technical issues. At this time, all participants have been placed in a listen-only mode. Please make sure to mute yourself. A question-and-answer session will follow the formal presentation, and instructions for participants that are logged in to the online webinar will be provided after management's prepared remarks. As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Dan Goldberger, electroCore's Chief Executive Officer.

Thank you all for participating in today's electroCore earnings call. Joining me today is Josh Lev, our Chief Financial Officer and our Investor Relations firm, FNK IR. Earlier today, electroCore published results for the fourth quarter and full year ended December 31, 2024. A copy of the press release is available on the Company's website. I apologize for the late start this afternoon. We are in Washington for meetings at the FDA this week. Before we begin, I'd like to remind you that, management will make statements during the call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including without limitation any guidance, outlook or future financial expectations or operational activities and performance, are based upon the Company's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list of the risks and uncertainties associated with the Company's business, please see the Company's filings with the Securities and Exchange Commission. electroCore disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time sensitive information that is accurate only as of the live broadcast today, March 12, 2025. For those of you who may be company, electroCore was founded in 2005 to commercialize the use of our proprietary, non-invasive vagus…

Thank you, Dan. Net sales for the year ended 2024 were $25.2 million an increase of 57% as compared to $16 million for the full year ended 2023. The increase of $9.2 million is due to an increase in net sales across our prescription gammaCore medical devices sold to the VA and revenue from the sales of our non-prescription general wellness Truvaga brand. Gross profit for the full year of 2024 was $21.4 million as compared to $13.2 million for the full year of 2023. The increase in gross profit was primarily driven by the increase in net sales. Gross margin was 85% for the full year of 2024 as compared to 83% in the full year of 2023. Total operating expenses in the full year of 2024 were approximately $33.6 million as compared to $32.5 million in the full year of 2023. Research and development expense in the full year of 2024 was $2.4 million as compared to $5.3 million in the full year of 2023. This decrease was primarily due to a significant reduction in investments associated with the development of Truvaga Plus. Selling, general and administrative expense in the full year of 2024 was $31.2 million as compared to $27.2 million in the full year of 2023. This increase was primarily due to greater variable sales and marketing expenses consistent with an increase in sales. In 2025, we plan on continuing to make targeted investments in sales and marketing to support our commercial efforts supporting all major U.S. channels. GAAP net loss in the full year of 2024 was $11.9 million compared to $18.8 million in the full year of 2023. This significant improvement was primarily due to the increase in net sales of $9.2 million for the full year of 2024 as compared to the same time period in 2023. Net loss per share for the full year of 2024 was $1.59 as compared to $3.42 net loss per share in the full year of 2023. Adjusted EBITDA net loss in the full year of 2024 was $9 million as compared to adjusted EBITDA net loss of $15.4 million in the full year of 2023. These improved results are also primarily due to increase in 2024 net sales and gross profits as compared to the same period in 2023. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in today's press release. Cash, cash equivalents, marketable securities and restricted cash at December 31, 2024, totaled approximately $12.2 million, as compared to approximately $10.6 million as of December 31, 2023. Net cash used in operating activities for the full year 2024 were $7 million, a 53% reduction from $14.7 million for the full year of 2023. And now, I'll turn the call back to Dan.

Thank you, Josh. I'm excited about the opportunities ahead. Our revenue continues to grow in our core business lines, including prescription products sold to the VA and health and wellness products sold to consumers. Our operating metrics show continued leverage, and I'm optimistic about the Company's long-term prospects, both for the brands we developed and those that align with our staff with sales channels. Demand for our prescription gammaCore therapy in the VA channel continues to grow based on clinical performance and our increased presence in the field. Our FSS contract has been extended to June 14, 2025, and we continue working with our VA contract specialists to secure a new follow-on contract. We rely on our field sales organization to drive revenue growth in the VA hospital and other prescription and B2B channels. Revenue growth scales with additional headcount in that sales function. As of January 2025, we have 48 active 1,099 entities representing about 80 sales agents, including sub-reps. That team is managed by eight territory business managers who are salaried employees. Our 1,099 team grew rapidly from 34 groups in January 2024 to 48 groups in July 2024, but the total number of active groups has remained constant since then. Revenue growth rate has slowed somewhat since the number of 10.99 groups leveled off. We expect the size of our team to grow in the second half of 2025 as we balance investments in future growth with the path to profitability. The VA healthcare system is the nation's largest healthcare system with an annual budget of $68 billion and employing more than 371,000 healthcare professionals, many of whom have been affected by macro forces. We are aware of ongoing disruptions at many of our VA hospital customers secondary to those macro forces. We have not seen any…

Thank you, Dan. We're now going to open up the Q&A session. [Operator Instructions] The first question will become from Anthony Vendetti. Anthony, we're just working to unmute your line.

Okay. Can you hear me now?

We can hear you.

Okay. Excellent. Dan, just on the NeuroMetrix acquisition, once that's complete, how do you intend to sell the Quell product? Are you going to put it into your existing sales channels? Do you have a plan on how you're going to price it, sell it? Maybe just give us a broad outline of the plans going forward.

Yes. Thanks, Anthony. Good question. So, we got to close the transaction and then take a hard look. But Quell fibromyalgia is currently available in, I believe, roughly 20 VA hospitals through open market access. It's not on contract. And so, step one after the closing the acquisition is to add the product to our FSS contract and through our relationship with Lovell Government Services to add it to the ECAT and a variety of other contracting mechanisms that will help streamline the process. We did a preliminary training of our sales team last month, but we'll do a more in-depth training of our sales team and in parallel of our customer service team and our medical affairs teams shortly after closing, and then, cut them loose to go Quell on the 150, 160 VA hospitals where which are currently customers. It'll take a little bit longer for us to get on contract. So, I'm very optimistic that the second quarter, depending on the timing of closing, is hard to predict. But as we get into the second half of the year, that sales channel for the VA hospitals is going to work smoothly like it does for gammaCore. Longer-term, bringing Quell fibromyalgia to our Joerns' relationship with Kaiser, bringing it to some of our commercial accounts, getting on contract with other third-party payers is all very exciting. And in parallel, in 2026, we want to look at taking the over-the-counter indication for lower extremity pain into some of our e-commerce channels. But that's more of a 2026 opportunity.

Great. Our next question will come from RK from H.C. Wainwright.

Okay. It looks like you might be muted on your end. There you go. Guess, we're having technical difficulties with RK.

Hey. Well, we'll come back to you, RK. But this time, we'll go to Tyler Bussian of Brookline Capital.

Can you guys hear me?

Yes.

Testing one, two. Okay. I think I see that I'm talking. Dan and Josh, hey, congrats on the great year. Looks like everything is going forward smoothly. My primary question resolves around kind of the Joerns element for electroCore and that kind of segment in general seems like it maybe has taken off a little bit slower than we would have thought about this time last year. Can you talk a little bit about Joerns in a little more detail kind of what's going on and what are your plans in that space for 2025?

Yes. So, it has taken much longer. It's been much more of a grind than we had hoped a year ago, but the wheel is starting…

I can't hear you.

Testing one, two, three. Can others hear me?

Dan, we hear you.

There we go. I switched it on my end now. Can you repeat that? Sorry, Dan. I had something screwed up.

Yes. So, Tyler, yes, we agree with your observation. It's taken much longer to get traction in that channel with Joerns and ultimately Kaiser. That said, we're starting to see some green shoots. We've got more than 30 repeating prescribers now, mostly in Southern California, some in the Northern California region. We're processing one or two prescriptions per month, not nearly enough to be meaningful revenue, but the wheel is starting to turn. The prescribers are starting to understand how to enter it into their system, and success breeds success. So, I'm very optimistic. It's going to be slow. And at some point, we will reach a tipping point. And I continue to be optimistic. It'll be sooner rather than later.

Great. Thank you very much. I'll get back in the queue.

Okay. Our next question will come from [Mark Gomes]. Mark, we're going to enable you to ask a question and just unmute yourself when you see it.

Am I unmuted?

Yes, you are.

Alright. There we go. Hey, guys. Yes. Great work. So, you're looking at the Kaiser -- sorry about that. The Kaiser channel. How would you contrast the start there to the start that you had in the VA system? Is there similarities there and therefore some parallels we can draw with regard to how that can ramp up over time?

Hey. Good. That's very perceptive, Mark. You're absolutely right. When we started selling in the VA hospital system in 2018, it was onesies, twosies, a lot of head scratching, and it takes a while to get the flywheel turning. So, Kaiser is taking longer candidly than our original initiatives in the VA hospital system. The Kaiser facilities are much more locked down. By that, I mean, it's very careful about letting sales reps for example into the facilities to talk to clinicians. It's a very methodical, very constrained process, but we are starting to get through there. So, I don't know how much longer it's going to take, but we're not giving up by any stretch.

Would it be fair to say then that, once you get in, it's hard to get kicked out and therefore, because of the competitive advantage of being there and tougher for others to get in, that ends up being an advantage once you do.

Exactly right. It's Kaiser. The Kaiser system is well known to be very sticky business that, it's hard to break in. But once you do and if you're providing a clinically meaningful benefit at a fair price, those contracts are very sticky.

Great. You made mention of seeking to become a leader in bioelectric devices, that's a much broader category than just vagus nerve stimulation or just the acquisition and partnership that you recently made. Your last organization, you grew to, if I remember right, a $100 million. Do you do you think that's a fair number for what you can grow this business too or you think you can grow it, you know, less or more?

Absolutely. Look, Mark, we are building the infrastructure on the sales side between our field sales team, our customer service function, our supply chain management, and more and more leveraging e-commerce opportunities. We've got a great pipeline of organic products, but we're now demonstrating with NeuroMetrix and Spark the opportunity to bring in new products, either through distribution or outright acquisition, that go into and leverage the same distribution channels. I think $100 million will be a signpost along the way. I think we can build a very large business here around non-invasive nerve stimulation for a variety of health and wellness and medical indications.

Okay. And then, there was a recent webinar that had a military personnel kind of extolling the virtues of the vagus nerve stimulation and in particular singled out your device. During the Q&A, he stated that he thought that there were thousands of enlisted personnel that benefit from the device based on the research that he had done. Does that put with what you're seeing? And, I guess, if you could give us a little bit of a flavor of the process that it might take to start penetrating that, as opposed to the trial units that have been sold to this point.

I wish I could. The supply chain, the purchasing process with Department of Defense is really obscure. We have quotations out for a few thousand handsets, and some of them have been publicly disclosed on sam.gov. That's one of the contracting platforms that DoD uses. So, you can see how many requests for quotes we've gotten, through that platform, and then it goes into a black hole. We have a colonel or a lieutenant general, who is very excited and who is acting as a champion for one of these, through each of quotes and they can tell us there it lost in the DoD acquisition process. But not unlike, the Kaiser system, the goal ultimately is to become a contract of record with Department of Defense. And, I'm told that that'll take three or four years, and then the purchasing process is much more streamlined. So, we will keep doing it. Some of the civilian crossover opportunities might actually overtake what's going on with active-duty military.

Okay. Thanks. Final question and then I'll leave you. The channel, the Truvaga channel, exploded quarter-over-quarter by my math. That average of a quarter-over-quarter number on the sales growth there, and that was even before you announced getting into the Amazon channel. So, we'd love to hear a little bit of color on what happened in that channel this quarter and what you expect going forward. What will take that under that guidance. Thanks.

Yes. So, you're absolutely right. December was, especially big for Truvaga, and we attribute that to the holiday season gift giving. It has normalized in the first quarter. It has normalized a little bit. We're not quite as not the same run rate that we were in in December, but we're seeing nice sequential growth month to month and quarter to quarter.

Great. Thank you, Dan. Our next question is going to come from [Matt Schwartz]. Matt, you want to unmute your line?

Yes. Can you hear me?

Yes. We can hear you now.

Great. Thank I appreciate you taking my questions. I just had a few. The first is, I think you guys put an ATM in place not long ago. Can you comment on whether you used any of it and how much?

I'm not sure that that's public yet. So, I'm going to deduct the question because we're not talking about that publicly at this point in time. I mean, we do have an ATM facility. Yes.

Okay. I figured it I thought -- I saw the cash, I thought, actually go up versus the cash flow from ops, so I figured you perhaps use it.

We had some warrant exercises. Okay. So, I stand corrected. It is in a 10-K. We used it just for a few days to make sure that we understand how to use it, about $200,000 worth end of February, beginning of March. But there were also some warrant exercises post the quarter close that add to the cash.

Okay. Great. Secondly, could you comment about -- I think if I heard you correctly, you guys are still working on the VA contract. Is there is there any more color around that? I'm not super well versed on how these negotiations work or when your last one expired, and such.

We've been in this -- the contracting office is slow. They've been giving us extensions. I think the current extension goes into June of this year. We've had conversations in the last month with the contracting officer, dotting i's and crossing t's and, working on payment terms, but I suspect that, we're going to continue to be in this sort of three- or four-month extensions at a time. In parallel, we also sell our products with Lovell Government Services, and our products are on the Lovell contracts as well, so we have a sort of a backup. I want to say 40% of our business went through the Lovell contracts instead of our own contract. And, actually, we make a little bit more money through Lovell because Lovell absorbs the credit card processing fees that that we have to absorb, so that 2.5%, 3%. So, we're agnostic which contracting mechanism that we go through, but we like having both.

Okay. Got it. And then lastly, am I right that the business that you're acquiring, NeuroMetrix, the product sales associated with that, what wasn't their total sales number, right? It's just a portion of it?

Correct. You you're referring to NeuroMetrix.

Yes.

The product line that we're going to continue with is called Quell for pain management. Their DPNcheck product line for diabetes is going through a separate asset sale process. I'm not sure how much of that they've made public at this point.

I see. Yes, and just the last piece of that is, I'm trying to -- I heard you say, you may give guidance in the future once you have a better sense of the revenue contribution from the acquisition. Is that right?

Yes. So, we're expecting to close the acquisition in the second quarter. And at that point, we'll have a much better feel for what the pro forma combined company financials are going to look like for 2025. So rather than speculate so close, we're going to try and do it right.

If you had to highlight, I know you've been putting up some great growth, and I think some consensus obviously has you growing quite a bit in 2025. If you had to highlight just at a high level without getting into the numbers, where you think the best growth opportunity is in 2025, what would you...

Look, we've got great momentum in our prescription gammaCore sales for headache. I think that's going to continue to grow. I think the percentage is going to be -- it's not going to grow at the same percentages because we're dealing with larger dollar amounts, but it's going to continue to grow well above market. Our direct-to-consumer continues to surprise us at how well that business is doing. That's off of a smaller base. But I think that's going to continue to be an upside surprise for us. We're working on additional indications. We may get a lift from additional indications in the back half of the year. And then, of course, the one acquisition product from NeuroMetrix and the Spark Biomedical for substance abuse are upsides for the back half of 2025 and certainly for 2026

Thanks, Matt. RK from HCW. Let's try again. I know we had some technical issues the last time. RK, can you unmute?

He's not muted.

Okay. While we wait, maybe we could take some of the questions that have been submitted. Dan, a couple of questions about the availability of Truvaga Plus in the UK without a prescription and sales in the UK. Do you want to spend a minute there?

So, we have not launched Truvaga outside of the U.S. We wanted to make sure that we understood the product quality first and return rates first and foremost as well as the sale to cash cycle. We are looking at launching Truvaga 350 in Canada and the UK later this year. Truvaga Plus is mobile app enabled. That's a little bit more complicated to launch outside the U.S. because every country has their own data management and personal data protection rules that, we're we just -- we're not in a position to do the detailed engineering around all of that. But we are going to explore launching Truvaga 350 in the UK and in Canada in the second half of this year.

Great. I do have RK's questions via email, so I'm going to read on his behalf. Is there an impact from the VA personnel reductions, that have occurred, that could impact the gammaCore business?

So, nothing material yet, but we are watching the situation. There was a memo about a reduction in force, a significant reduction in force in the VA that came out at the March. Prior to that, there was a lot of distraction around the early retirement offers that were made. And so, we're not seeing any explicit issues, but a lot of the people that we work with on the supply chain side are distracted trying to figure out if they should take the early retirement buyout, worried about whether they're going to be affected by the RIF. On the clinical side, among the doctors and nurses and that staff, we really do not see any disruption. But on the supply chain side, we are seeing some distraction.

Okay. Thank you. This one also comes from RK. What is your confidence on achieving a mid-80s gross margin in 2025? And in the long term, what are the gross margins investors should expect?

So great question. We're got plenty of track record now with our gammaCore -- prescription gammaCore and now with our direct-to-consumer Truvaga product line. So, there's a little bit of give and take with product mix. But for 2025, most of our revenue is going to come from our legacy product lines, and we know what that gross margin profile looks like. As we get into the back half of the year, as I mentioned earlier. We think there's upside in the NeuroMetrix Quell product and in the Spark Sparrow products. Those gross margins are probably a little bit lower. And so, as that product mix -- if one or both of those products become material revenue, then that product mix might pull down gross margin. But I really think that's more of a 2026 conversation than 2025. 2025 revenue is going to be dominated by our existing products.

Great. I'm going to take a question here, that was submitted by Jeff Cohen of Ladenburg. Could you talk about the gammaCore U.S. commercial channel a little more? What are the '25 and '26 plans there to fuel awareness and growth?

Great question. So, Joerns and Kaiser is the huge opportunity for us on the commercial channel. Our cash pay channels, when we launched Truvaga, we anticipated that a significant portion of our cash pay channel would migrate to the lower price point of Truvaga, and we're not surprised, that some of that has happened. In 2026, assuming that we finally do get traction with Joerns, this year in 2026, we're going to look towards getting on contract with other indemnity insurance third-party payers. And I think that's really what's going to be necessary to drive growth in the prescription commercial channel.

Great. We have two questions that came in from [Larry Linton]. The first one is, in the next three to five years, what do you think the percentage revenue mix would be between your existing portfolio of products and the acquired or the assets that you're in the process of acquiring?

That's a great question. My crystal ball is very fuzzy. I think our prescription gammaCore business is going to continue to grow above market. The wild card is, how much are we willing to invest in consumer wellness products, and therefore, how quickly that product line will grow. I can see scenarios where our health and wellness initiative overwhelm our more traditional prescription medical device business. I'm very optimistic about the Quell products, both on the prescription side and on the health and wellness side. And the substance abuse product from Spark has tremendous upside. As you know, substance abuse and managing it is a crisis in this country. So, I can't handicap what it's going to look like in three years, but it's going to be big.

We have two more questions over the text box and then one more live question. Can you talk about your capital adequacy? What funding do you anticipate needing over the near- to mid-term?

Yes. That that's a great question. It's something that the Board and management look at, very, very frequently. We finished the year with more than $12 million of cash in the fourth quarter. We used less than a million of cash. So, we've got plenty of runway to keep growing the revenue line and get to that cash positive inflection. That said, there are places where we believe we could be growing faster, if we were willing to make bigger investments, for example, to grow our field sales force and hire additional territory business managers or on the consumer side to get more aggressive about our marketing and branding activities. And so, those are things that we look at on a regular basis. At this point in time though we feel like we've got plenty of cash to execute the plan and we have no plans to raise any capital.

Great. We have another question here about your strategy on how to drive sales of Truvaga through the website, but also on Amazon. And a second part of that was. Can you help this investor better understand the differentiating factors of Truvaga Plus to competing products that are out there and sold?

Yes. So, until now, most of our spending on Truvaga has been on search. And increasingly, we're spending money on social media to create awareness. We've started to kind of move up the value chain with influencers and affiliates. And there's a huge ecosystem out there of especially biohacker influencers and increasingly affiliates. Amazon is a big step for us, right? Amazon, we're all consumers. Most of us prefer to buy something on Amazon, if it's available there. It's just a much more seamless process. Amazon of course takes a fee and so that affects our contribution margin. And so, we're going to be monitoring that closely as we get more experience with Amazon. And then, resellers longer term that's chunky business, right? Because with a reseller, you sell a significant number of products. Maybe they get a discount, but then again, I don't have to spend the money on advertising. And so that could all work, that could also work very nicely. So, we see it I guess you call it an omnichannel distribution and sales investment. And we're very pleased with our metrics so far and the numbers keep getting bigger and bigger.

I'm going to combine two questions here on the Rx gammaCore side. VA and DoD business has been running in a range for the past three quarters now. Do you need to grow the sales force again to re reaccelerate this business? And can you just talk about how many salespeople you have today versus where you were six months ago?

Yes, we talked about that in our prepared remarks. We have roughly 80 sales reps out there now that are straight commission. They get paid on a 1,099. Many of them carry additional product lines besides ours. We have eight W2 employees that are managing that group of 80 field sales reps. Those numbers have been constant since July, August of 2024. I want to get through closing the NeuroMetrix transaction. And assuming things are going smoothly, we're going to look at investing in growing that field sales function again as we get into the second half of the year. But absolutely, our prescription gammaCore sales and our -- I expect our prescription fibromyalgia sales will ultimately scale, with feet on the street and our ability to get the word out and educate clinical staff, doctors and nurses.

Great. Thank you. And we're going to take our last live question from [Kenneth Steinhauser]. Ken, we're going to elevate you. You're just going to need to unmute.

Hi, Dan. Thank you for taking the question. I'm a retired pharmacist. I actually purchased two Truvaga Plus units. And thank you for the 15% discount by the way. I appreciate it.

We haven't mentioned that today, that too much, but okay.

If anybody wants to know about a 15% discount, I'm on Yahoo! and you can reach me there. But I have two family members, well, three family members that are using Truvaga Plus. One for, GI symptoms has worked very well. The other one for sleep. Now, the one for sleep is also doing very well, but he likes to share things with his significant other. I have a problem with the app because the app will only let one person in a household to use the unit. Are you guys going to change that app so more than one person can use the unit or is there something that's going to...

Yes. So, we have a whole development pathway for the mobile app feature set. I have to balance that with our R&D spend, and we're trying to stay disciplined around operating expenses. But that functionality is definitely on the pathway. One of the things we're really looking forward to is going live on Apple Health, and so making it interoperable with Apple Health so that people can track, not just their vagus nerve stimulation, but also the impact on various heart rate, heart rate variability, quality of sleep, through the Apple Health functionality. We're also going to be picking up some infrastructure from NeuroMetrix. They have a far more sophisticated mobile app and back infrastructure around the mobile app for a portal. We're just not there yet, and I have to juggle that against the investment required.

Dan, you want to go into your closing statement?

Absolutely. So, thank you all. Love the more interactive call. Sorry, we had a little bit of technical difficulties. And as usual, I also want to thank our customers, the doctors and nurses that are acting as our champions, increasingly, the biohackers out there that are picking up on, Truvaga and, certainly, our employees and our Board of Directors for their patience and support with us. So, everybody, have a good day.