electroCore, Inc.

Greetings and welcome to the ElectroCore third quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. Please make sure to mute yourself. A 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. It is now my pleasure to introduce your host, Dan Goldberger. Thank you, sir. You may begin.

Thank you all for participating in today's ElectraCore earnings call. My name is Dan Goldberger. I'm the Chief Executive Officer of ElectraCore, and I am also a member of the Board of Directors. Joining me today is Brian Posner, our Chief Financial Officer. Earlier today, ElectraCore released results for the third quarter ended September 30th, 2023. 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 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 the 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. ElectroCorp 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 8, 2023. ElectroCore was founded in 2005 to commercialize the use of our proprietary non-invasive vagus nerve stimulation for medical and general wellness applications. The vagus nerve is the longest cranial nerve in the body, bringing information from the visceral organs to the brain. Stimulating the vagus nerve affects many important autonomic functions in the brain and in the body, including neurotransmitter levels, inflammation levels, and metabolism. Surgically implanted vagus nerve stimulators have been available from other companies for more than 40 years for chronic conditions like epilepsy and depression. So a large and growing database confirms the safety and efficacy of the technique. Building on that science, ElectriCorps pioneered non-invasive vagus nerve stimulation, and our products are now available by prescription for certain headache conditions and without a prescription for general wellness. We have a growing pipeline of additional indications that we plan to launch in the future. We're thrilled to report a fourth consecutive record revenue quarter with sales of $4.5 million for the three months ended September 30th, 2023. That's a 128% increase over the prior year and 27% increase sequentially. Gross margins held steady at 85%, and Brian will discuss the financials in more detail later on. During the third quarter, we strengthened our balance sheet by raising net proceeds of approximately $7.5 million in a registered direct and private placements of equity to returning institutional and accredited investors, and certain directors and officers. We believe that our increased cash balance along with potential future increases in revenue and continued discipline around operating expenses should provide us with enough runway to operate our business through 2024 and beyond. Our prescription headache business continues to grow worldwide. We launched two new non-prescription general wellness product lines in late 2022. Truvega is a direct-to-consumer brand and tax sim for human performance is for our active duty military personnel. Both new brands continue to exceed our expectations in the third quarter and are driving excitement about the future. Truvega is currently available exclusively through our e-commerce platform at www.truvega.com. We are positioning Truvega as a direct-to-consumer general wellness product for stress, relaxation, sleep, and mental acuity. We are carefully managing our Truvega advertising spend as we fine-tune our messaging and explore various platforms. We held the total spend fairly constant from Q2 to Q3, so we're not surprised that sequential revenue was relatively flat in the quarter for the Truvega brand. Truvega recorded net sales of $267,000 in the third quarter of 2023, in line with our second quarter of 2023 Truvega revenues of $290,000. Based on this continued success, we're making targeted investments in marketing Truvega and remain confident in our previous guidance that Truvega sales will be approximately $1 million for the full year 2023. For the three months ended September 30th, 2023, our revenue return on advertising spend, what the industry calls a media efficiency ratio, or MER, was 2.09%. In other words, we're spending $1 to generate $2.09 of revenue. We're carefully monitoring Truvega return rates as well, which have decreased slightly to approximately 12% so far this year. We believe that the Truvega business can scale nicely if we can maintain or improve these metrics. PaxSim for human performance is being sold to select Air Force Special Forces and Army Special Forces units for accelerated training, sustained attention, reduced fatigue, and improved mood, as defined by the Air Force Research Laboratory, or AFRL. No prescription is required, and more information is available at www.tac-stim.com. We recorded $601,000 of TAC STEM revenue in the third quarter of 2023, up from $311,000 in the second quarter of 2023. For the nine months ended September 30th, 2023, we've already met our previously stated guidance of $1 million of revenue from the TACSIM brand for the full year 2023. The sales funnel for this product continues to grow as word spreads across active duty military units of the potential human performance benefits provided by TACSIM. In parallel, we're developing a second generation product known internally as TACSIM 2.0 in collaboration with AFRL. and we continue to build prototypes for evaluation by our government research partners. We have stated before that revenue growth for this product line is likely to be lumpy as active duty units purchase in bulk for pilot deployment. Turning now to our prescription headache business, the VA DOD hospital channel continues to be our largest customer. You'll recall that our GammaCorp prescription therapy is free to patients covered by Veterans Administration benefits representing about 9 million covered lives across approximately 1,300 healthcare facilities. Sales in the VA DOD channel grew 135% from $1,167,000 in Q3 2022 to $2,737,000 in the third quarter of 2023. 141 VA and DOD military treatment facilities have purchased prescription gamma core products through September 30th, 2023, as compared to 113 through September 30th, 2022. The VA Hospital Administration Headache Centers of Excellence, or HCOE, estimates approximately 600,000 patients are being treated for headache in the VA hospital system. Since we've dispensed approximately 4,000 gamma core devices to veterans, that represents less than 1% of the total addressable market within the VA system. We look forward to continued penetration of this important channel. Our physician-dispensed cash-paid channel, including GC Direct and GConcierge, grew 19% from $359,000 in the third quarter of 2022 to $427,000 in the third quarter of 2023. These channels have grown from 938 prescribers at the end of the third quarter of 2022 to 2,599 at the end of the third quarter of 2023. We added 362 new prescribers during the third quarter of 2023. We believe that the increase in prescribers could be a leading indicator of future growth. Last year, we announced a distribution agreement with Jerns Healthcare that we believe will add more than 12.5 million covered lives within a select managed care health system. The business model with Jerns is similar to how we work with the VA hospital system. Jerns handles educations, billing, and collections, while ElectroCore ships directly to patients and provides in-servicing and patient support. Our field sales team is responsible for educating clinicians within those managed care systems. We continue to work with JIRNS on the implementation, and we are pleased to have recorded small initial revenue from this relationship during the third quarter of 2023. Our field sales function will continue developing champions within the target managed care system, and we think JIRNS could be a significant revenue source in 2024 and beyond. Revenue from channels outside the United States increased by 11% in U.S. dollars to $464,000 in the third quarter of 2023, as compared to $417,000 for the third quarter of 2022. Most of our OUS revenue is generated in the United Kingdom by prescription Gamma Core sales funded by the National Health Service, or NHS, which increased 13% in local currency. On October 17, 2023, we announced that gamma-core therapy will continue to be listed in the United Kingdom's National Health Service, or NHS, supply chain catalog for at least an additional two years through March 17, 2026. The listing, which commenced on June 4, 2019, was scheduled to terminate on March 18, 2024. Now, turning to our clinical progress, on October 24, 2023, We announced top line data from an abstract presented at the 2023 American College of Gastroenterology annual meeting regarding the potential for MVNS to decrease the use of acute rescue medications for exacerbations of nausea due to gastroparesis, GP, or functional dyspepsia, FD. The study is entitled Noninvasive Vagal Neurostimulation Reduces Nausea Rescue Medication in Patients with Gastroparesis and Related Disorders with additional benefits on multiple other associated symptoms. The primary endpoint was reducing the use of anti-nausea medications. On October 10th, 2023, we announced top-line data from two abstracts that were presented at the 15th World Stroke Congress on the possible role of NVNS in the treatment of acute neurological injuries. The first trial, entitled Non-Invasive Vagus Nerve Stimulation is Safe and Efficacious, in the treatment of headache associated with subarachnoid hemorrhage, Vanquish, was conducted at Northwell Health in New York and showed a significant reduction in the overall pain score and a 14% decrease in the average morphine equivalent dosage after two weeks of treatment, as well as a trend towards a three-day decrease in average hospital stay. The second study entitled Noninvasive Vagus Nerve Stimulation in Acute Ischemic Stroke or Novist, is a prospective randomized clinical trial with blinded outcome assessment being conducted at the Leiden University Medical Center. 150 patients with ischemic stroke are being randomly allocated one-to-one to NVNS for five days in addition to standard treatment versus standard treatment alone. On September 27th, 2023, we announced the publication of two peer-reviewed publications, supporting gamma-core NDNS in patients with post-traumatic stress disorder, or PTSD. Both studies were conducted at Emory University and were published in the peer-reviewed Journal of Affective Disorders. The first publication, Effect of Transcutaneous Cervical Vagus Nerve Simulation on Declarative and Working Memory in Patients with Post-traumatic Stress Disorder, or PTSD, was conducted under the direction of Dr. Bremner with the support of Emory University, the Georgia Institute of Technology, and the Atlanta Veterans Affairs Medical Center, and was sponsored by a Department of Defense Small Business Technology Transfer Grant. The study suggested that transcutaneous vagus nerve stimulation improves attention and declarative and working memory in patients with PTSD as measured by multiple endpoints. The second published peer-reviewed manuscript entitled Transcutaneous Vagal Nerve Stimulation Modulates Stress-Induced Plasma Ghrelin Levels a double-blind randomized sham-controlled trial, concluded that transcutaneous vagus nerve stimulation could reduce the levels of ghrelin in response to various stressful stimuli. Ghrelin is a neuropeptide hypothesized to be involved in the stress response, if you recall. The FDA previously awarded prescription GammaCore breakthrough designation to treat the symptoms of PTSD, and both publications provide important data that may be leveraged as we work with the agency towards a 510K de novo clearance for a PTSD indication. On July 6, 2023, we announced that the NFL and NFL Players Association jointly awarded two grants to independent medical researchers at the American Society of Pain and Neuroscience, ASPN, and Emory University to fund investigations into innovative, first of their kind, alternative pain management methods that could benefit NFL players and society at large. The study is actively enrolling investigators and will continue to provide updates about the NFL and NFLPA study, our pipeline, and other opportunities in coming months. Now, I'll turn the call over to Brian for a review of our financials and other guidance items. Brian. Thank you, Dan.

For the quarter ended September 30th, 2023, ElectraCore reported net sales of $4.5 million compared to $2 million during the same period of 2022, which represents an approximately 128% increase over the prior year. The increase of $2.5 million is due to an increase in net sales across major channels, including the sale of our prescription GammaCore devices in the U.S. and abroad, and revenue from the sales of our non-prescription general wellness Trevega, and taxed in brands. Total operating expenses in the third quarter of 2023 were approximately $8 million as compared to $7.3 million in the third quarter of 2022. Research and development expense in the third quarter of 2023 was $1.2 million as compared to $1.6 million in the third quarter of 2022. This decrease was due to a decrease in compensation associated with cost cutting measures offset by our targeted investments to support the next generation of the company's non-invasive nerve stimulators. Selling, general, and administrative expense in the third quarter of 2023 was $6.7 million as compared to $5.7 million in the third quarter of 2022. This increase was due to greater variable selling and marketing costs consistent with our increase in net sales. GAAP net loss in the third quarter of 2023 was $4 million compared to the $5.5 million net loss in the third quarter of 2022. Adjusted EBITDA net loss in the third quarter of 2023 was $3 million as compared to a net loss of $4.8 million in the third quarter of 2022. 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, and restricted cash at September 30th, 2023 totaled approximately $13.7 million as compared to approximately $18 million as of December 31st, 2022. In July 2023, The company raised net proceeds of approximately $7.5 million through our registered direct offering and concurrent private placements priced at the market under NASDAQ rules. Looking ahead, for the full year 2023, we are increasing our net revenue guidance to $15 million to $15.5 million from $14 million to $15 million. representing more than 70% growth over 2022. And now I'll turn the call back over to Dan.

Thank you, Brian. I am very proud of our third quarter 2023 operating results and with the continued momentum in our prescription headache business and strong balance sheet. We continue to be enthusiastic about the company's long-term prospects across all brands and product lines. TrueVega continues to show tons of potential as a direct-to-consumer general wellness offering. We've started with an e-commerce business model, which will continue to be the focus, and I look forward to launching a next-generation app-enabled product platform next year. Our metrics remain strong through the first nine months of TrueVega sales. We will continue to monitor our KPIs and metrics and adjust our investment in all of our consumer channels as the year progresses. Pipeline of interest from different branches of our active duty military continues to develop for our TACSIM products. The TACSIM brand is likely to be lumpy as active duty units purchase in bulk for pilot deployment. Longer term, we also believe that there may be civilian crossover as first responders, elite athletes, transportation workers, traders, and e-gamers become aware of the human performance benefits published so far. Demand for our prescription gamma core therapy in the VA DOD channel continues to grow based on clinical performance and our increased presence in the field. We have about 35 straight commission sales agent entities representing about 60 1099 reps in the field, managed by our small team of territory business managers and supported by our customer experience team. This growing number of sales agents continues to open new facilities, and increased the number of orders coming from existing accounts. Our sales and marketing expense increased by approximately $1 million in the third quarter of 2023 over the third quarter of 2022, while sales grew by $2.5 million, signaling that there may be real leverage opportunities in the P&L. Further out, we're working towards establishing additional indications for prescription GammaCorp to treat post-traumatic stress disorder and or opioid use disorder. Look for new product launches in 2024 featuring our app-enabled technology that can provide digital health solutions. That product platform will initially be launched in general wellness with future uses and prescription indications as we ramp up our supply chain. We see many potential growth drivers for the remainder of 2023 and 2024, including number one, Continued growth in our U.S. prescription headache business in both the VA, DOD, and commercial channels. Second, further development of the Truvega product line for general wellness, mental acuity, and sleep driven by ongoing consumer marketing efforts. Number three, further development of a TACSTEM brand for human performance in the active duty military and future civilian crossover. Number four, revenue through our distribution agreement with Jerns Healthcare for the sale of prescription GammaCore within a select managed care health system. Number five, our app-enabled new product platform that will facilitate consumer-facing digital health solutions and unlock new business models. And number six, prescription GammaCore label extensions into PTSD and OUD in 2024 and 2025. Finally, in 2023, we strengthened our balance sheet. Our cash balance, along with increased revenue and consistent reduction in expenses, should provide us with enough runway to operate our business. At this time, I'll turn the call over to the operator. Operator, please open the line for questions.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And our first question comes from the line of Jeff Cohen with Ladenburg-Dalman. Please proceed with your question.

Hi, thank you. This is actually Destiny on for Jeff. Firstly, congratulations on a really strong quarter. That was really wonderful to see and quite a beat even for our models or with our models as well. I guess what I would like to start with is your increased guidance. Just want to kind of gauge, is that going to be mostly, again, driven by growth within the VA and DOD sector? prescription channel, or is that going to be a little more heavily weighted towards Truvega or Taxton? Can you just help me understand how that could look for the remainder of the year and into 2020?

Yeah, so look, the VA hospital system is our biggest number, so that's obviously where more of the dollar growth has to come from. We're just, we're several weeks into the quarter, and we feel really good about that growth in the VA hospital system being consistent with the percentage growth that we showed sequentially for the last few quarters. So that will be the largest dollar contribution, even though it may not be the largest percentage contribution. Trivega will be relatively flat because that's driven by our advertising marketing spend. We may do a Black Friday promotion, for example, but it's, you know, on a percentage basis or rather on a dollar basis compared to our larger channels, it's not going to be meaningful. A tax spin, we've got a lot of momentum there, so I think you'll see a solid percentage increase in that channel. And our UK business, you know, will continue to be in that sort of mid to high teams growth.

Okay, got it. Thank you for that. And I guess maybe sticking with my question around like the DOD and VA channel, you noted 35 sales agents and about 60 1099s. How has that changed over the nine months in 2023 as compared to 2022? Can you just remind me?

I don't think we had any in 2022.

Okay, perfect. So you've onboarded a lot of these this year, all of these this year. And how are you seeing the time from onboarding to revenue generation? How long are you seeing that take typically?

So what happens is not so much a steady cadence, but rather 20 to 30% of the folks that we enroll get it and bring relationships with them and become productive very quickly. And then the rest take either more time or they just don't cut it and we end up replacing them. But The best situation is one in which we engage a sales agent who already has other product lines in a particular facility, already has relationships in that facility, and can turn on the business very quickly.

Okay, got it. I understand the strategy there. Maybe I'll transition over to a question on TrueVega. I know you're holding ad spend about the same, so revenue will likely be consistent. I'm just wondering what kind of KPI you're looking for or that you're trying to optimize before you ramp up that ad spend a bit more.

That's a very good question, and that's a topic that we're working with the board on right now as we think through our budget for 2024. We're very happy as long as that media efficiency ratio stays comfortably above two. We think that business scales very, very nicely at anything above two. We've consistently been favorable to that metric. And so now it's about convincing the board to take the gloves off.

Okay. Got it. Thank you for that. All right, let me ask just this one clarification, and then I'll allow others to ask some questions because I'm definitely hogging the line. Did you say you added 362 new prescribers in Q3 alone? Did I hear that correctly?

Yes, ma'am.

Wow. Okay. Well, I'll jump back to you. Congratulations again.

More food on the street brings more new names.

Yes. Love it. Perfect. Thank you.

Our next question comes from the line of Swam Bakula with HC Wainwright. Please proceed with your question.

Thank you. Good afternoon, Dan and Brian.

Hi, RK. Sorry about getting your name confused.

No, no, no. It's better than something else. So, looking at where you are and looking at your guidance, so, you know, you flocked about 10.8 million for the nine months, and then you're guided up to between 15 and 15 and a half, let's say 15.3. That is flattish from here into the fourth quarter, but your commentary is otherwise. So what are we missing or why be timid?

So management is very bullish. Some of our advisors are urging caution. But the biggest swing is the timing of revenue from the taxed-in product line, which You know, while we've seen a steady cadence, I just want to be out of an abundance of caution. I want to be careful about the lumpiness in that business.

Fair enough. Makes sense. Now I understand why you didn't talk too much about the revenue expectations on the tax and business for the fourth quarter, even though you're saying that you're expecting it to grow. so so moving straight into tax them obviously it looks amazing going from the second quarter to third quarter on on on that revenue stream alone um but at the same time you're also making the additional relationships from what i understand within the military services um plus the tax in 2.0 um so um and with with the new budget here started in september Right. So I know you don't want to say anything quantitative, but qualitatively, where are the discussions in terms of how things are projecting for yourselves into the new fiscal year, which starts from September? And also the additional commentary I would like to hear is on taxed in 2.0. How much can you talk to us about not only the development, but the potential deployment and where could it go? You know, in what places could it go?

It's a great question, RK, and I'm going to give you two answers. The special operators, the actual folks who are using it, are very are very excited, are very supportive, and are looking to deploy rapidly. The macro government shutdown silliness is out of everybody's hands and is an issue.

Okay. I get that now. Okay. Okay. All right. And then the 2.0, so what do you, you know, where do you envision this moving forward? Or is that also dependent on start and stop of the government?

So a little bit of both. You know, we've delivered a significant number of pre-production prototype to Air Force research laboratories primarily, and then a couple to Army Special Forces. They are doing their evaluations. The preliminary informal anecdotal is very, very exciting and supportive. Most likely, they'll come back with a punch list of, you know, make it a little bit bigger, make it a little bit rounder. But we don't see any... I'm highly confident that there won't be any significant changes to the design and that we're going to be able to move quickly into pilot production.

Okay, great. In terms of the Jones Healthcare, you said you got

a small bit of revenue in the third quarter. Do you, uh, think by this time you got all the kinks out of the system in terms of, um, not only the paperwork, but also the, the, the general flow through, um, of, um, of, of the procedures necessary, um, for, for deployment?

Yeah. So, uh, the back office, uh, is working as smoothly as it will, and that was really the time-consuming piece of this. Currently, we are actively recruiting champions in different facilities along the West Coast. Those champions will start off with a three-month or six-month prescription on select patients. As they start to have success with those patients, they start telling their colleagues. They open the doors for us to talk to other departments. And, of course, they start prescribing for larger numbers of their patients. It's a very similar cadence to what we do in the VA hospital system, where there's a lot of effort that goes into opening up a new facility. And then once we have a champion or two, we can drive broader adoption within that facility. One way that I like to think about it in 2020 was our first full years of sales in the VA hospital system. And I think we did $1,750,000, $1.8 million in revenue in the VA hospital system in 2020. And so I think that's a reasonable goal for the Adjurance Healthcare program. opportunity in 2024. Okay.

Thanks. One last question from me. Just as you spoke about MAR and MAR of 2.09 delivering on the Truega, is there a similar metric for the VA hospital system? Because you've been in this streamlined for just as you said, about four plus years now, or almost four years now. And what is, I understand COVID came and screwed us all up. What is the thing that can ignite that growth? Because as you said, you are only 1% penetration into the market.

Yeah, so the marketing advertising spend in either the VA hospital system or the insurance relationship, is very small. The variable expense is overwhelmingly commissions. And what drives adoption is feet on the street. It's not very elegant, but you've seen that model over and over again in med tech.

Yep. Yep. Okay. Okay. So do you think that the money that you raised Will that go into that feed on the street more to help that, or is this more for making, ensuring operations as they are right now?

Yeah, so you'll see a steady increase in our sales and marketing expense, either because we're spending money to drive advertising for TrueVega or because our commissions are going up tied to hospital sales revenue.

Okay. Perfect. It was a great quarter, and I'm sure things are going to look better from here.

Thank you. We think it was a great quarter as well.

And our next question comes from the line of Nick Sherwood with Maxim Group, LLC. Please proceed with your question.

Congrats on the quarter. I just, you know, first question, how do the Travagan taxed and gross margins compare to the prescription business?

So, we haven't been getting out that granular data. Our pricing in the prescription business is significantly higher. So you can connect the dots from there. Okay.

And then kind of switching gears, can you provide any color on the distribution agreement with relief band?

Yeah, so we've had to, we've chosen rather to press pause on that relationship. Our business is growing so quickly in the VA hospital system. We just, our sales guys just don't have the bandwidth to really get fully trained up on that new product line. So, you know, I look forward to returning our attention to that in 2024. We've got to take care of our own house first.

Understandable. Then another question, what sort of response have you seen with your partnership with the NFL for the season, the concussion headache pain study?

They won't tell us a damn thing. Sorry to hear that. I keep hoping to get something to plug into my fantasy football team, and they won't tell me.

Yeah, they won't tell you if Josh Towns is using the district or anything. All right. Those are all my questions. I'll get back to you. Thank you, Nick. Thank you.

Our next question comes from the line of Walter Shanker with MassPartners. Please proceed with your question.

Hi, Dan. Hi, Walter. How are you today? Is there a point, I guess, eventually is the answer, where in the VA system, you have enough penetration that somebody higher up near the top says, if it's good for 10, 15, 20, 25% of hospitals, and maybe you need a champion, we really ought to roll this out across the whole system. If we're having very good results, what you expect is just going to be adding hospitals every quarter for the rest of our lives until we get through the whole system?

That's a very good question. I'd love to believe that there is a higher level policy making entity within the VA system. It hasn't been my experience in other businesses, but We can certainly hope. The VA hospital administration is divided up into, I believe it's 17 or 18 VISNs, V-I-Z-N-S, and it is more likely that there could be a VISN level, so in other words, a regional level policy decision In parallel, the VA hospital administration has something called a Headache Center of Excellence, an HCOA, which is at a national level. And they have written Gamma Core into their neuromodulation headache policy. but I don't know exactly what it says. And I'd love to know more, but they're keeping that close to their chest.

Okay. And on a related, vaguely related question, as you move forward, TXM and DOD, you now are in A few, okay, I'm just trying to get some sense as to, you know, I can sort of look at the metric on VA and say our penetration is X. On DOD, for high-performance type applications, you still are in just a very, very small percentage of the, as opposed to all soldiers or everyone in the military, In the high-performance area, you are still in just a few select locations?

Exactly right. We are in pilot deployment with a few airport special units and a few Army Special Forces units. And then we've deployed one or two demonstration devices in other places. The total addressable market is roughly 3 million active duty personnel within the Army, Navy, Marines, Air Force, and Coast Guard. But then beyond that, we think there's going to be civilian crossover to first responders, to elite athletes. So the total addressable market If you start to think about it in the context of civilian crossover or NATO allies, the total number keeps getting bigger and bigger. The total opportunity, rather, gets bigger and bigger.

Okay. And lastly, I think we discussed this slightly once before, in the VA hospital, you had mentioned before we're opening up in some of these hospitals for more departments. Do you have the sense anecdotally that people are using it outside of headache as they're seeing, you know, just general anxiety, stress, sleeping, a lot of other benefits that probably are accruing to the people who are using it?

So absolutely. You know, we start off in neurology where the headache specialists live. We spend a lot of time in pain, pain management. We spend a lot of time in behavioral health where we talk about headache and depression, headache in PTSD, headache in substance abuse. Women's health is a call point. More and more of the VA hospitals have a general wellness departments, frankly. And then ultimately, we get into primary care as well, where they see headache, where they see stress and anxiety, and on and on. So as word gets out, we just have more and more call points within each facility.

Okay. Thank you, Dan.

Thank you, Walter.

And it looks like we have reached the end of the question and answer session. I'll now turn the call back over to the CEO, Dan Goldberg, for closing remarks.

Thank you, operator, and thank you, everybody, for joining our call. I want to give special thanks to all of our employees who worked tirelessly to deliver this amazing therapy to patients. The team's done a great job of staying nimble, scaling the business, and responding to the needs of our customers and healthcare providers alike. I also want to thank healthcare professionals and their patients for their loyal support of gamma core therapy. We're thankful for the support of AFRL, NIDA, the National Institute on Drug Abuse, the NFL Players Association for supporting our new product initiatives and working on those grants for investigator-initiated trials. And, of course, Veterans Day is coming up, and so we greatly appreciate your service for those of us, for those of you who are participating in Veterans Day activities. Thank you all, and we look forward to speaking with you again in a few months.

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.