Greetings, everyone, and welcome to the electroCore Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce you to your host, Dan Goldberger, electroCore's Chief Executive Officer. Dan?

Thank you all for participating in today's electroCore earnings call. Joining me today are Dr. Thomas Errico, one of our founders and investor and our newly elected Chairman; Joshua Lev, our Chief Financial Officer; and our Investor Relations team from FNK IR. Earlier today, electroCore published results for the third quarter ended September 30, 2025. A copy of the press release is available on the company's website. 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, November 5, 2025. To begin, our Chairman would like to share a few thoughts on the company's strategy and future. Dr. Errico?

Thank you, Dan. Good afternoon, everyone, and thank you for joining electroCore's Third Quarter 2025 Earnings Call. My name is Tom Errico, and as the newly elected Chairman of the Board, it's an honor to address you today. As a founder, practicing physician, consistent investor and daily user of our noninvasive vagal nerve stimulation technology for over 15 years, I am deeply committed to our mission of transforming lives. Today, I'll outline our strategic vision and discuss the background behind our key shift to accelerate growth. Dan and Josh will follow with an in-depth review of our financial and operational performance. Let's begin. electroCore was established to modernize vagal nerve stimulation by developing a noninvasive technology, starting with our FDA-approved medical device for the prevention and treatment of migraines and cluster headaches. While I personally do not suffer from these conditions, I use noninvasive vagal stimulation daily. About 12 years ago, during investment meeting on vagal nerve stimulation in New York City, Dr. Kevin Tracey, the pioneer of VNS, was asked if he used the technology himself. At that time, he used an auricular device for at least 20 minutes a day. When questioned about this commitment, he answered, because it gives me a daily overwhelming sense of well-being. As a routine user of VNS, his words strongly resonated with me and helped explain the positive performance-enhancing effects I was experiencing. Fast forward a decade or so and research from Air Force Labs has further confirmed the remarkable performance benefits of noninvasive vagal nerve stimulation associated with electroCore's technology. As a practicing physician working with both adults and children, I encounter patients daily who could benefit from the substantial health and wellness impacts of VNS. Expanding access to this technology inspired us to launch Truvaga. As a microcap company listed…

Thank you, Tom. Turning to the details on the third quarter. electroCore delivered another strong performance, extending our growth trend and strengthening our foundation for scale. The VA hospital system remains our largest customer and continues to grow. Following the closing of the NeuroMetrix acquisition on May 1, 2025, Quell is showing strong early traction as a noninvasive pain therapeutic for fibromyalgia in the VA hospital system. Truvaga sales also returned to growth, driven primarily by our e-commerce store at www.truvaga.com and an expanding network of affiliates who actively promote Truvaga to their audiences. As Dr. Errico noted, electroCore pioneered noninvasive vagus nerve stimulation. Today, we are broadening that innovation into a suite of noninvasive bioelectronic technologies that improve quality of life for patients and for wellness consumers in the United States and select international markets. Science and data continue to guide every step we take. In the third quarter of 2025, revenue reached a record $8.7 million, up 33% year-over-year and 18% sequentially. Gross margins remained strong at 86%, up slightly from 84% last year. We model gross margins in the mid-80s going forward. Prescription device revenue grew 19% year-over-year to $6.8 million, driven by both gammaCore and Quell sales in the VA hospital system. As of September 30, 2025, 195 VA hospital facilities have purchased prescription gammaCore products, up from 166 a year ago. The VA Headache Centers of Excellence estimates approximately 600,000 patients are being treated for headache in the VA hospital system, including approximately 24,000 cluster headache patients. We have now dispensed 12,000 gammaCore devices, roughly 2% of the addressable VA headache market, with additional opportunity among patients experienced headaches related to PTSD and mild traumatic brain injury. We believe there are as many as 550,000 fibromyalgia patients in the VA hospital system based on published…

Thank you, Dan. Net sales for the third quarter of 2025 were $8.7 million, an increase of 33% as compared to $6.6 million for the third quarter of 2024. The $2.1 million increase was driven primarily by higher sales of prescription devices and growth in the company's non-prescription general wellness Truvaga product. Gross profit for the third quarter was $7.5 million as compared to $5.5 million for the third quarter last year. Gross margin was 86% compared to 84% for the third quarter last year. Research and development expense in the third quarter was $662,000 as compared to $521,000 in the third quarter last year. This increase was primarily due to increased development costs associated with our next-generation health and wellness mobile application in the 3 months ended September 30, 2025, as compared to the 3 months ended September 30, 2024. Selling, general and administrative expense was $9.7 million for the 3 months ended September 30, 2025, an increase of $2.1 million as compared to $7.6 million for the previous year. This increase was primarily due to greater investment in selling and marketing costs, consistent with the company's increase in sales. For the remainder of 2025, the company plans to continue to make targeted investments in sales and marketing to support its commercial efforts. Total operating expenses in the third quarter were approximately $10.4 million as compared to $8.1 million in the third quarter last year. Total other expense was $521,000 for the 3 months ended September 30, 2025, which consisted primarily of $384,000 of acquisition-related costs in connection with the change in the estimated liability payable to pre-closing shareholders of NeuroMetrix pursuant to a contingent value rights agreement or CVR, and $150,000 of interest expense on the convertible debt financing with Avenue Capital. This compares to total other income…

Thank you, Josh. I echo Dr. Errico's enthusiasm about the future of electroCore. We continue to report above-market operating results. Prescription device sales continue to grow with sales of both our gammaCore and Quell Fibromyalgia products. Our strategy of offering a suite of bioelectronic products and technologies into our established channels is developing nicely. Demand for prescription devices in the VA hospital channel is driven by clinical data and our increased presence in the field. The launch of prescription Quell Fibromyalgia has exceeded our expectations. We plan to hire additional W-2 territory business managers to increase adoption of our technologies in the VA hospital system as well as dedicating resources to accelerate adoption in managed care systems. We currently have approximately 80 sales agents, including sub reps, managed by an internal sales team of 16 salaried employees. Truvaga Plus has been favorably received by the market since its April 2024 launch. The brand continues to show tons of potential as a direct-to-consumer general wellness offering and has returned to sequential growth. We sell Truvaga products direct-to-consumer through our e-commerce site, www.truvaga.com, and through Truvaga partners like Ben Greenfield, Perks at Work, TruMed, Rehabmart, Best Buy Online and through a growing number of affiliates and influencers. We continue exploring the expansion of the Truvaga proposition through new product offerings and have begun development of our next-generation mobile application. We believe the Truvaga brand has potential to become a significant player in the health and wellness space, and the evolution of the brand is important for providing shareholders with long-term value. For the third quarter of 2025, our sales and marketing expense increased sequentially by approximately $640,000, while sales grew by roughly $1.3 million, demonstrating operating leverage in spite of those increased investments. The acquisition and integration of NeuroMetrix exceeded our expectations. Adding products like Quell Fibromyalgia into the prescription VA channel allows our field sales team to offer a growing suite of bioelectronic self-administered therapies for certain debilitating conditions. As we continue to add new products to our established channels, we'll also continue working towards additional indications for prescription gammaCore to treat post-traumatic stress disorder and other clinical opportunities. In summary, I believe we are poised to accelerate growth and we'll be increasing our investment in the high-margin prescription device space to help underwrite investments in the health and wellness channel. With our current cash position, we believe we have access to sufficient liquidity to execute this plan as we get closer to breakeven in 2026. At this time, I'll return the call to the operator. Operator, please open the line for questions.

Thanks, Dan. We're now going to open the line for Q&A. [Operator Instructions] But just note, if we run out of time and have a constraint, someone from the IR team will get back to you if your question is not asked on today's call. With that, we're going to go and open up the call, and we'll start with Jeff Cohen from Ladenburg.

Sorry, can you hear me okay? Just a couple of quick questions for you. So firstly, congrats on the Quell in both the VA channel as well as the other channels. Can you remind us previously what channels NeuroMetrix was selling into before the acquisition?

So the prescription Quell for fibromyalgia was sold in 4 or 5 VA hospitals off contract through open market access prior to the acquisition. And there were a few cash pay customers who were served through HealthWarehouse, which is a PDM, but small numbers.

Okay. Got it. Can you give us any further color on the [indiscernible] Truvaga sale for a clinical trial? I'm assuming one clinical trial.

Yes. It's one clinical trial that's being run in long COVID subjects. There are a variety of other therapies that are being evaluated. It's a pretty large trial. Candidly, we don't know very much about it because it's an investigator-initiated trial, and they really didn't share the protocol with us, et cetera.

Got it. Okay. And then lastly, talk about the next-gen mobile app that you're working on. I'm assuming it's software-only, and will it be usable for all your platforms being gammaCore, Truvaga and Quell?

So great question. So the next update of our app will be Truvaga Plus only. It will work with the legacy Truvaga Plus that we've been selling since inception in April of last year, but it is not set up to work with gammaCore or Quell. Quell has its own app, mobile app environment. As we wrap our arms around it next year, we're going to look at harmonizing the various mobile apps for vagus nerve stimulation and for the Quell fibromyalgia apps, but that's going to take us a little bit longer to get our arms around it.

Our next question comes from RK of H.C. Wainwright.

RK, are you there?

Can you hear me, Dan?

Yes.

And thanks to Dr. Errico for giving those comments, which is really helpful for us. So I have a few questions. So let me start off with a high-level one in terms of how the strategy of acquisition of Quell fibromyalgia seems to be doing much better than what we were in internal expectations? So can you kind of comment on what's helping this product especially in the VA space? And what sort of learnings do you have at this point that you can help the next class of salespeople that you're going to bring on board?

Great question. Thanks, RK. So the time line is that -- in May and June, we did 2 things. We moved the production facility down here to Rockaway, New Jersey, and we were able to add prescription Quell for fibromyalgia to our VA hospital contract. Once we did that, once we had product and contract in June and July, we were able to start training our sales team. They, in turn, were able to start demoing the product to their accounts. And the uptake has been much faster than we expected. Our primary headache call point is neurology. The primary call point for fibromyalgia is rheumatology, but both of those cross over in pain and in polytrauma. And we've been very upside surprised at the willingness given the safety profile that we've already demonstrated with gammaCore, the safety profile of the NeuroMetrix, Quell for fibromyalgia. The folks in pain and polytrauma have been very quick to adopt the fibromyalgia solution. Part of it is the safety profile. The other is that fibromyalgia patients don't have a lot of other options. It's a surprisingly unmet clinical need.

Fantastic. So thanks for actually telling -- giving me commentary on what is causing that pull. So now that you have it in the VA segment. Is it -- how easy is it to replicate in other areas, other segments, especially like the Kaiser Permanente or other hospital systems given the knowledge that you have now?

So we're going to do that carefully. We've just got on contract at a large managed care system. I'm not allowed to say Kaiser. But that contract is specific for gammaCore Sapphire. We have not even attempted to bring Quell fibromyalgia to that system. But obviously, that's something that we're going to do once we gain traction with Kaiser.

Perfect. And then maybe you made some comments that I didn't listen. I was looking on some commentary on TAC-STIM and what is -- what should be our expectations in terms of Air Force procurement and not just for this year, for the next 45 days, but thinking about '26, I do understand it is a lumpy business, but just trying to get a feel for things.

Yes. So it's a tale of 2 cities. The anecdotes, the research, the use cases that we hear about from Army and Air Force is incredibly enthusiastic, but the actual revenue generation continues to be small and lumpy. We did roughly $140,000 of revenue in the September 30 quarter for TAC-STIM products sold to active duty military. The current quarter, the fourth quarter has come to a screeching halt largely because of the government shutdown. I think we will get some orders in November and December, pending, of course, the government opening up, et cetera, et cetera. Our internal forecast for 2026 is about $400,000 for the full year, similar to the sort of $100,000 per quarter pace that we've had in 2025. There's huge upside, RK. I just can't -- and we're talking -- we're in conversations about some very large orders, but I just have no credibility to say what the timing of those orders is going to be. So we're going to be conservative for 2026.

Okay. And then last question from me is as Dr. Errico was talking about China, how meaningfully in a higher market is that going to be? And how do you really plan to commercialize that opportunity?

So great question. We, as electroCore, do not plan to commercialize it at all. Mr. Zhang now owns roughly 10% of electroCore. He has a license to commercialize our technology in China and only in China for the time being. He seems to have significant resources, financial and access to product development and access to manufacturing. And what he has shared with me is that he plans to go through the CFDA process in China with a product that uses our technology, but of his own design, it will be manufactured in country and will pay us a royalty on unit sales and revenue.

Our next question comes from Jeremy Pearlman of Maxim Group.

Okay. Can you hear me?

Yes.

Congrats on the quarter. Just firstly, the current growth, let's say, just specifically the VA segment, is that coming from more new accounts or increased utilization from existing customers?

It's both, right? We're going deeper into our existing customers. We added what -- almost 40 new VA hospitals over the course of the last year. And so that's the leading indicator is opening up new hospitals. And then the Quell fibromyalgia project -- Quell fibromyalgia product was meaningful revenue in this quarter.

Right. Is there an expectation for 2026, how many additional VA hospitals you hope to start prescribing in?

Yes. But it's a secret.

Secret. Okay. Then for a year's time, we'll hopefully get that answer. And then maybe also, is there maybe -- could you tell us what specific geographies? You said there's only -- you've only tackled 2% of the potential patient population in the VA system. Where do you see the most growth potential geographical-wise?

So that's a good question. Right now, we are strong in Texas. We're strong in the Southeast and all up and down the West Coast. The New England, Mid-Atlantic, the -- we're pretty good in the Chicago area, but New England, Mid-Atlantic, the rest of the Midwest is all greenfield territory geographically for us.

Okay. Understood. And then just maybe one more question related to your clinical development pipeline. In the past, you've talked about many other indications. Maybe any update on the progress of how any of those trials are going? And when we could expect maybe potential new indications?

Yes. So I've put -- we've been putting the most energy into PTSD, gammaCore in PTSD. And we had meetings with the FDA over the course of this year. We're still trying to convince them that the data that we have is adequate. But in the background, we're spinning up yet another pivotal trial in PTSD that will start enrolling next year. I don't think we needed to get the label, but even if we don't need it to get the label, it will be great for marketing support. And if FDA continues to be difficult, we'll have the additional data once and for all to get across the finish line. We've had a couple of publications about mild traumatic brain injury, what I know of as concussion. And so now we are doing some planning around what would it take to collect pivotal data to support a de novo submission around mild traumatic brain injury. So that's going to be a 2027 initiative. NeuroMetrix has quite a bit of data in neuropathy secondary to chemotherapy. And so we're going to look at whether or not we should go after a label extension for the Quell product line in that indication. And then there's intriguing data in low back pain that we'll take a look at as we get into 2026.

Our next question comes from Walter Schenker of Maz Partners.

Just one quick question. My first comment is my wife and I do use the product every day and at least -- and we are very happy that we use it every day. So it can't hurt to have us do a plug through just our Chairman.

Thank you.

The Quell royalty is capped, which means that -- and this is actually a question that for the current year, since you just paid $400,000, you've largely paid and then incrementally, there should be minimal payments. And next year, it's capped at a lower level so that incrementally next year, the royalty payment will be less than it was this year. Is that correct?

Yes, in Spirit, what we didn't pay anything. We adjusted the estimate that flowed through the income statement and now sits on the balance sheet as a future liability. The payment, the cash doesn't go out until May or June of next year. But otherwise, the income statement effect, you are correct.

But the income statement, I understood, I should have stated it more clearly. The income statement effect both in the next quarter and in the coming year will be -- will decline?

Correct.

Year-over-year and quarter-over-quarter?

Yes.

And secondly, although someone asked the main question, I was curious about given how large the market is and given that your Chinese investor is a significant investor having filed on the company, just to further expand. So he is planning on moving forward as best you know, as a medical device, not as a consumer device.

Correct. He is moving forward as a prescription medical device for a really exciting list of indications. And what I should have mentioned to the previous caller is that given the clinical studies that he's planning to underwrite, we may be able to migrate some of his data back to the U.S. for additional indications.

And don't answer the question, if you don't owe me answer, I'm going to ask it anyway. As he looks at the Chinese market and given what you just said, their trials are as lengthy as ours. So even if he is very successful, we're talking substantial number of years before that data might be useful either in China or here...

That's my understanding. In headache and in PTSD, where the clinical trial protocol is pretty well understood, he can get up and running relatively quickly. But for some of the other like rheumatoid arthritis things that he wants to chase, it's going to take longer. But in any case, it's years, not months.

And lastly, not as a question, but as a comment, I was -- the most positive thing in this whole call for me is the fact that you have finally -- so it's a left-handed compliment or something. You finally meaningfully accelerated the penetration in the VA hospital system given the fact that there are -- we were at 10% penetration, and there's a lot of opportunity there if we can continue to expand the hospital penetration.

Very well said and thank you for the compliment. It was not left-handed at all.

Okay, Dan, Josh, in our last few minutes here, we're going to try to bang out all of the texted-in questions. First, what is being done to combat the copycat marketing vagus nerve stimulation devices?

Yes. So there's a European company, they go by the name Pulsetto. We have sued -- they sued us for the declaratory judgment that they do not infringe our patents earlier this year. We very quickly filed a cross complaint that's not only do you infringe that patent, you infringe this laundry list of additional patents. And by the way, there are a bunch of trade-related and trademark-related cross complaints in all of that. The filings are in the in Federal Court District of New Jersey, and my lawyers will not let me comment beyond what's in those public filings. Obviously, since we are in litigation, we want to focus on winning and winning big. There may be other infringers. We've put them on notice, but we're going to focus on the pending litigation.

Can you guys break out what neuro revenue contributions were for the quarter? The question came in from [Andrew Rem].

So Quell fibromyalgia or actually the full Quell line was $595,000 of net revenue in the third quarter.

Okay. And how about on Truvaga. Can you -- did you break that out? Could you break that out on Q3?

I think we did, but it was $1,674,000.

Okay. Well, everyone, thanks for your participation. Dan, I'm going to turn the call back to you for your closing comments.

Thank you, Rob. Thank you all for your time and attention. I know this was a little bit longer call. A special thank you to Dr. Tom Errico, our new Chairman, who has been a profound champion for this technology and for this company for many, many years. I want to thank all of our employees and sales reps out there that are working hard every day. I want to thank the folks in the VA hospital system and our other customers, but especially the federal workers who are struggling under this ridiculous government shutdown stuff going on right now. And yes, there's probably a bunch of other people I need to thank. But thank you all for your time and attention. Have a great day.