electroCore, Inc.

Greetings and welcome to the ElectroCorps third quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. Our question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Nicole Jones at CG Capital. Please go ahead.

Thank you all for participating in today's Electric Core earnings call. Joining me today are Dan Goldberger, Chief Executive Officer, Brian Posner, Chief Financial Officer, and Dr. Peter Stotz, Electric Core's Chief Medical Officer. Earlier today, Electric Core released results for the third quarter ended September 30th, 2022. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during the call that include forward-looking statements with 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 fact should be deemed to be forward-looking statements. All forward-looking statements, including without limitation any guidance, outlook, or statements regarding our 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 uncertainty that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, we 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. Electric Core 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 3, 2022. And with that, I'll turn the call over to Dan.

Thank you, Nicole. Hello, everybody, and thank you for joining us on today's call. I'm pleased to report that revenue for the three months ended September 30, 2022, was almost $2 million, a healthy 33% increase over $1.5 million in the year-ago period. Revenue declined slightly sequentially, and I'll discuss some of the puts and takes on revenue later in this call. Gross margins expanded nicely to 87%, and net cash used in operations was about $4.6 million for the quarter ended September 30, 2022. Revenue from the U.S. commercial headache channel was $411,000 for the quarter ended September 30, a 160% increase from $158,000 in the third quarter of 2021. Approximately $359,000 of our U.S. commercial revenue in the third quarter came from cash pay programs. We have several initiatives in the U.S. commercial channel which have delivered mixed results. Our cash pay clinician dispense programs, GC Direct and G Concierge, have grown from 637 prescribers to 937 prescribers in the last 90 days. Revenue from those programs has exceeded our growth expectations, and the 50% increase in prescribers should be a leading indicator of future growth. On the other hand, performance of our e-commerce platform has not met our expectations. We're currently restructuring that channel and expect a streamlined, more exciting offering to launch in January 2023. A few days ago, we announced a distribution agreement with Jaren's Healthcare, LLC. that will add more than 12.5 million covered lives within a select managed care health system. The business model with Jerns will be similar to how we work with the VA hospital system. Jerns will handle adjudications, billing, and collections, while ElectraCore will ship directly to patients and provide in-servicing and patient support. Jerns will pay ElectraCore for devices dispensed. The adjourns agreement will take a few months to implement and our field sales team will be responsible for educating clinicians within those managed care systems during that time. We continue to work towards adding covered lives through negotiations with commercial payers and adjourns announcement should support those activities. Net sales from the Department of Veterans Affairs or the VA. and the Department of Defense, or DOD, were $1.1 million, an increase of 21% as compared to $946,000 in the third quarter of 2021. A total of 113 VA and DOD military treatment facilities have purchased Gamma Corps products through September 30, 2022, as compared to 96 through the third quarter of 2021. Note that there are approximately 1,300 VA healthcare hospitals and clinics and over 400 military hospitals and medical clinics. So we believe we still have plenty of potential growth ahead of us. You'll recall that the federal government budget year ends on September 30th. In 2020 and 2021, we saw VA hospital business increase in September, pulling forward revenue from October. In 2022, Exactly the opposite has happened, and we believe the first few weeks of October may bode well for strong performance from our U.S. government channel in the fourth quarter of 2022. Revenue from channels outside the United States increased 9% to $417,000 in the third quarter of 2022, as compared to $383,000 for the third quarter of 2021. And we look forward to steady growth in this channel for the rest of 2022. That said, currency fluctuations continue to be a headwind to our international revenue. For example, our U.K. business increased more than 11% year-on-year measured in local currency, British pounds, but declined almost 5% as reported in U.S. dollars. On April 19, 2022, we announced that GammaCorp Noninvasive Vagus Nerve Stimulation, NVNS, has been selected for additional funding by the Department of Defense Biotech Optimized for Operational Solutions and Tactics, or the BOOST program. The BOOST research program, which will be conducted under the leadership of the 711th Human Performance Optimization Branch of the United States Air Force, seeks to optimize and validate the efficacy of NVNS in accelerated training, sustained attention, reduced fatigue, and improved mood among Air Force personnel. More recently, we've signed an agreement with the prime contractor and received our first purchase commitment under that contract. We are establishing the tax stem brand of NVNS for human performance as an extension of the boost program. And we're exploring ways to make our initial product offerings available to all branches of the active duty military and first responders in the United States and abroad. Now turning to our clinical progress on September 7th, 2022, the company announced the publication of a peer-reviewed manuscript entitled Transcutaneous Cervical Vagus Nerve Stimulation Reduces Behavioral and Physiological Manifestations of Withdrawal in Patients with Opioid Use Disorder in the journal Brain Stimulation, which was conducted with the support of Emory University and Georgia Tech University and sponsored by a grant from the National Institute on Drug Addiction, NIDA. The double-blind randomized sham-controlled study of 21 patients with OUD found that MVNS reduced both the psychological and physiological symptoms of acute opioid withdrawal. Statistically significant reductions in opioid withdrawal symptoms, distress, and pain were observed over the course of a two-hour protocol for the MVNS group in comparison to the sham stimulations. We subsequently participated in a pre-submission meeting jointly with the FDA and NIDA where we discussed the pivotal trial to support a future regulatory submission for an indication to treat the symptoms of withdrawal. NIDA has indicated that they are likely to finance that pivotal trial in its entirety. On October 20th, 2022, We announced data from an oral presentation at Neurocritical Care Society's 20th annual meeting held in San Antonio, Texas, on the possible role of gamma-core NVNS in the acute treatment of traumatic brain injury, TBI. The presentation was given by Dr. Afshin Devani of the University of New Mexico, who is the primary investigator leading the program, and reviewed animal data demonstrating the ability of NVNS to decrease anxiety and improve motor function post-injury. Additional work on the potential benefits of NVNS on traumatic brain injury will be funded by an exploratory development research grant, R21, from the National Institute of Neurological Disorders and Stroke. We'll continue to provide updates about our pipeline and other opportunities. Now, I'll turn the call over to Brian for a review of our financials and other guidance items. Brian? Thank you, Dan.