5/8/2024

speaker
Operator

Greetings and welcome to the ElectroCorps First Quarter 2024 Earnings Conference Call. At this time, all participants are on a listen-only mode. 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. I would now like to turn the conference over to your host, Dan Goldberger. Thank you, sir. You may begin.

speaker
Dan Goldberger

Thank you all for participating in today's Electric Core earnings call. My name is Dan Goldberger. I'm the Chief Executive Officer of Electric Core, and I'm also a member of the Board of Directors. Joining me today is Brian Posner, Chief Financial Officer. Earlier today, Electric Core published results for the first quarter ended March 31, 2024. 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 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 performances 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. Electric Corps disclaims any intention or obligation, except as required by law, 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, May 8, 2024. 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. non-invasive vagus nerve stimulation, and our products are now available by prescription for certain headache conditions and without a prescription for general wellness and human performance. Our pipeline of potential future indications and products continues to grow as clinicians, researchers, and wellness advocates conduct investigator-initiated trials to become more familiar with the benefits of non-invasive vagus nerve stimulations. We are thrilled to report a six consecutive record revenue quarter of $5.4 million for the three months ended March 31, 2024, a 96% increase over the prior year. That's a five-year compound annual growth rate from Q1 2019 to Q1 of 2024 of greater than 67%. Moreover, This growth has been accomplished with 84% gross margins. Brian will discuss the financials in more detail later on. We launched our US prescription headache business in 2017, selling primarily to specialty pharmacies. Since then, our prescription headache business has grown worldwide, including sales that are covered by national health systems, such as the VA hospital system in the United States and the National Health Service in the United Kingdom, cash pay sales, and through certain managed care systems in the United States. We launched two new non-prescription general wellness product lines last year. Truvega is a direct-to-consumer health and wellness brand, and TaxStem is our brand for human performance for active duty military personnel. Both new brands exceeded our expectations in their first full year of sales and continue driving excitement about the future. The VA hospital system continues to be our largest revenue channel. 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 channel grew 127% to $3.9 million in the first quarter of 2024 from $1.7 million during the first quarter of 2023. 151 VA facilities have purchased prescription GammaCorp products through March 31, 2024, as compared to 124 through March 31, 2023. The VA Hospital Administration Headaches Centers of Excellence, or HCOE, estimates approximately 600,000 patients are being treated for headaches in the VA hospital system. Since we've dispensed approximately 5,300 Gamma Corps devices to veterans since 2022, we believe that represents less than 1% of the total addressable market within the VA system. We use several contracting mechanisms to support sales to individual VA facilities, including open market access, our FSS, or Federal Supply Services Contract, and our non-exclusive distribution agreement with Lovell Government Services. Lovell is a service-disabled, veteran-owned small business, or SDVOSB, offering medical and pharmaceutical goods and services to federal healthcare providers. During first quarter of 2024, sales through Lovell accounted for approximately 13% of ROVA sales. TrueVega is currently positioned as a direct-to-consumer general wellness product for stress, relaxation, sleep, and mental acuity. For the first quarter of 2024, TrueVegan net sales were approximately $385,000 as compared to $147,000 during the first quarter of 2023. Our revenue return on advertising spend, what the industry calls a media efficiency ratio, or MER, was approximately 2.49 in the first quarter. In other words, were spending $1 to generate $2.49 of revenue. TrueVega return rates, which we continue to monitor closely, dropped slightly to approximately 8% of shipments. However, we modeled return rates at a more conservative 10% to 15%. Last month, we launched TrueVega Plus, our second TrueVega product offering. TrueVega Plus is a mobile app-enabled general wellness product. The first few weeks of sales of TrueVega Plus have again exceeded expectations, and we are enthusiastic about the potential our new app-enabled product provides for future iterations of our technology and engagement with consumers. Since launching TrueVega Plus, we've sold approximately 300 units, and customers have conducted approximately 2,400 sessions using the product. Our media efficiency ratio has expanded to 3.21 since launch. driven by higher pricing and early adoption of TrueVega Plus. Both TrueVega products are available exclusively through our e-commerce platform, www.truevega.com, and we are carefully managing our TrueVega advertising spend, return rates, and sessions as we offer two unique TrueVega propositions for health and wellness. We believe that the TrueVega business can scale nicely if we maintain or improve these metrics. TAC-STEM 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.tacstem.com. For the first quarter, ended March 31, 2024, we recorded $301,000 of TACSTEM sales as compared to $88,000 during the same period last year. 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 TACSTEM. In parallel, we have developed a second generation product known internally as TACSTEM Black. In collaboration with AFRL, and we continue to build prototypes for evaluation by our government research partners. Even though we have an impressive sales funnel for TAC-STEM, we have stated before that revenue growth for this product line is likely to be lumpy as active duty units purchase and vote for pilot deployment, and we expect revenues for TAC-STEM in the second quarter of 2024 to be flat to down sequentially due to the timing of such orders. Our prescription physician dispense cash pay channel, including GC Direct and G Concierge, recorded revenue of $424,000 during the first quarter of 2024, down slightly from $436,000 in the first quarter of 2023. We expect at least some of these customers to migrate to the Truvega brand as awareness grows, so we are modeling flat revenue from this category for the time being. There were 2,023 cumulative revenue-generating cash pay prescribers as of March 31, 2024, up from 1,218 on March 31, 2023. Last year, we announced a distribution agreement with Jerns Healthcare LLC 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 adjudications, billing, and collections, while ElectraCore ships directly to patients and provides in-servicing and patient support. Our field sales team is responsible for building awareness among clinicians within those managed care systems. We continue to work with Jerns on the implementation, including the expansion into new geographic territories, and we recorded small recurring revenue from this relationship during the first quarter of 2024. Our field sales function is developing champions within the target managed care system. And we think insurance could be a source of revenue growth in the second half of 2024 and beyond. Revenue from channels outside the United States increased by 10% in US dollars to $449,000 in the first quarter of 2024, as compared to $410,000 for the first quarter of 2023. Revenue from channels outside the U.S. increased approximately 14% in local currency for the first quarter of 2024 as compared to the first quarter of 2023. Most of our OUS revenue continues to be generated in the United Kingdom by prescription gamma-core sales funded by the National Health Service, or NHS. Now, I'd like to turn to our clinical progress. On April 30th, 2024, we announced the results of our most recent TrueVega Plus consumer study conducted earlier this year. The 39-subject, 30-day in-home use test conducted by an independent third-party research firm demonstrated that TrueVega Plus helped its users improve sleep, focus, stress, energy, and mood. Health assessment evaluations were reported after seven and 30 days. Most notably, 82% of participants felt calmer and mentally healthier. 74% of participants felt they slept better, of which 72% reported they received between 30 minutes to two hours more sleep each night. After the study completed, 87% of users said they will continue to use Truvega Plus for ongoing overall wellness benefits. Two of our investigator-initiated trials the Acute Stroke Trial Novus in Leiden, Netherlands, and Gait and Mobility and Parkinson's Disease in Newcastle, UK, have been fully enrolled, and we expect to report top-line data later this year. We'll continue to provide updates about our pipeline and other opportunities as they become available. Now, I'd like to turn the call over to Brian for a review of our financials and other guidance items. Brian?

speaker
Brian

Thank you, Dan. Net sales for the three months ended March 31, 2024 increased 96% as compared to the three months ended March 31, 2023. The increase of $2.7 million is due to an increase in net sales across major channels, including our prescription GammaCore medical devices sold in the U.S. and abroad, and revenue from the sales of our non-prescription general wellness and human performance Travega and Taxbin brands. Gross profit increased by $2.2 million for the three months ended March 31st, 2024 compared to the three months ended March 31st, 2023. Gross margin was 84% for both periods. Total operating expenses in the first quarter ended March 31st, 2024 were approximately $8.4 million as compared to $8.5 million for the quarter ended March 31st, 2023. Research and development expense in the first quarter of 2024 was $399,000 as compared to $1.8 million in the first quarter of 2023. This decrease is primarily due to a significant reduction in investments associated with Trevega Plus. Selling, general, and administrative expense of $8 million for the three months ended March 31st, 2024 increased by $1.3 million or 19% as compared to $6.7 million for the comparable period in 2023. This increase was primarily due to our greater variable selling and marketing costs consistent with our increase in sales. GAAP net loss for the first quarter of 2024 was $3.5 million or 53 cents per share as compared to the $5.9 million net loss or $1.24 per share for the first quarter of 2023. This significant improvement was primarily due to the increase in net sales to $5.4 million for the first quarter of 2024 compared to $2.8 million during the same period of 2023. Adjusted EBITDA net loss in the first quarter of 2024 was $3.1 million as compared to adjusted EBITDA net loss of $5.1 million in the first quarter of 2023. These improved results are primarily due to the 96% increase in first quarter 2024 net sales over the first quarter of 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 and restricted cash at March 31, 2024, sold approximately $8.1 million as compared to approximately $10.6 million as of December 31, 2023. And now I'll turn the call back over to Dan.

speaker
Dan Goldberger

Thank you, Brian. I'm very pleased with the continued momentum in our prescription headache and general wellness businesses. Our operating metrics, especially revenue and gross margins, continue to beat internal expectations, and I'm very enthusiastic about the company's long-term prospects across all brands and product lines. The launch of Truvega Plus was received favorably by the market. The brand continues to show tons of potential as a direct-to-consumer general wellness offering, and we will continue selling Truvega products through our e-commerce site, www.truvega.com. We'll explore additional channels and product offerings to increase the lifetime value of each customer as we go forward. The pipeline of interest from different branches of our active duty military continues to develop for our TACSTEM products. Sales of the TACSTEM brand continue to be irregular 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 GammaCore therapy in the VA channel continues to grow based on clinical performance and our increased presence in the field. We have approximately 35 straight commissioned sales agents representing about 90 1099 reps in the field managed by our small team territory business managers and supported by our customer experience team. This hybrid structure is very scalable as we deploy prescription GammaCore around the country. During the first quarter of 2024, our sales and marketing expense increased by approximately $1.4 million over the first quarter of 2023, while sales grew by $2.7 million, signaling real leverage opportunities in the P&L. Further out, we're working towards establishing additional indications for prescription GammaCore to treat post-traumatic stress disorder, opioid use disorder, and other clinical opportunities. We had $8.1 million of cash at March 31, 2024. We have dramatically reduced our R&D expense, and we intend to maintain discipline around fixed operating expenses. We expect that commissions and media spend will scale with revenues and will remain at approximately 30% of related sales on a blended basis. Therefore, we expect that our cash used in operations will continue to decline sequentially as revenue increases. In summary, I believe the business is demonstrating operating leverage and that we will have a variety of strategic levers to pull to continue growing and or operating the business until we can generate positive cash flow from operations. As we continue through 2024 and beyond, we will focus on strategic initiatives, including Number one, continued growth in our U.S. prescription headache business in both the VA and commercial channels. Number two, growth of our direct-to-consumer wellness business through sales of both our Truvega 350 and Truvega Plus products for general wellness, stress, mental acuity, and sleep, driven by ongoing consumer marketing investments. Three, further development of the TaxDim brand and launch of TaxDim Black later this year. for human performance in the active duty military and potential civilian crossover. Number four, revenue through our distribution agreement with Jones Healthcare for the sale of prescription GammaCorp within a select managed care health system. And number five, prescription GammaCorp label extensions for a variety of indications over time. At this time, I'll turn the call over to the operator. Operator, please open the line for questions.

speaker
Operator

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd 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. One moment, please, while we poll for questions. My first question comes from Jeffrey Cohen with Ladenburg-Thalman. Please proceed with your question.

speaker
Jeffrey Cohen

Hi, Dan and Brian. How are you? Good.

speaker
Dan Goldberger

Hi, Jeff.

speaker
Jeffrey Cohen

So, I guess, firstly, could you talk about the channels in the mix that you anticipate on TrueVega? I know that you placed a couple hundred units thus far. How do you expect that to fold out as far as one versus the other?

speaker
Dan Goldberger

That's a great question. The TrueVega 350 is offered at a significantly lower price than the TrueVega Plus. And the mix, it's early, right? We've only been offering the new product, TrueVega Plus, for three full weeks now. And it's been a surprisingly successful. It's roughly a 50-50 mix. product mix for that three weeks, but I wouldn't, you know, we're not, I wouldn't try to draw any conclusions from the first three weeks. Got it.

speaker
Jeffrey Cohen

Okay. And then could you talk about the, uh, the optics and the components? I know that R&D was down tremendously, which you identified as true data plus development concluding, but what kind of followup on R&D and where should we see that for, uh, second quarter and beyond, full year, and then SG&A as well. Is that radish from that increase from last year, or it'll continue to increase sequentially from that $8 million in the first quarter?

speaker
Dan Goldberger

So for R&D, internally, we're going to keep a lid on it for this year. We've got lots and lots of great product ideas and label extensions, but but we want to drive to getting to cash positive and profitability. So we're modeling R&D at sort of $8.5 million for... I'm sorry. No, I misspoke. $2.5 million for the full year, right? Less than half of last year. G&A, we expect to be somewhat down from last year. We're continuing to look for opportunities to reduce expenses. But our marketing spend, either commissions in our prescription business or advertising spend in our consumer business, are going to be scaling. And in our prepared remarks, We internally remodel our variable sales and marketing expense at about 30% on a blended basis.

speaker
Brian

To add to what Dan said is the G&A part is seasonally high in the first quarter because of audit-related costs, the auditors, the lawyers, and Sarbanes-Oxley, all the requirements of a public company. So the G&A part should be down in the remaining quarters.

speaker
Dan Goldberger

So to be clear, I misspoke. I want to be clear that we're modeling R&D at roughly 2.5 million this year, not that higher number. I don't know why that popped in my head. I apologize.

speaker
Jeffrey Cohen

Not a problem. Thanks for that. And then I guess lastly maybe talk about inventories currently and how they've been and how you expect that to – play out over this year? I'm sure you're building up some inventory into Vega plus and, uh, perhaps text in black and, uh, reducing inventory on us commercial.

speaker
Brian

Yeah, I'll start. And, uh, bottom line is we've worked down a lot of inventory over the years, uh, for the first quarter, since I think Dan and I have been with the company, we don't have the caption long-term inventory. anymore, which is a function of revenue and forecasted revenue. We're very optimistic about the future. Dan, I don't know if you want to add anything about the supply chain for the new products?

speaker
Dan Goldberger

The inventories, we're still running heavy on inventory as a multiple of daily sales because we're not very good at predicting product mix, for example, like you touched on, Jeff, with How many of the 350s are we going to sell versus the pluses? So we're keeping more inventory, more days of inventory. But as we gain more understanding of the business and specifically the product mix, I think we're going to be able to steadily reduce inventory as a multiple of day sales. In other words, continue to generate cash from inventory.

speaker
Jeffrey Cohen

Got it. Okay, that does for us. Thanks for taking our questions.

speaker
Dan Goldberger

Thank you.

speaker
Operator

Our next question comes from Bruce Jackson with the Benchmark Company. Please proceed with your question.

speaker
Bruce Jackson

Hi, good afternoon, and thanks for taking my questions. I want to start with the VA. How much of your VA revenue comes from the Centers of Excellence the Headache Centers of Excellence?

speaker
Dan Goldberger

That's a good question. We don't break that out in our public discourse. Dr. David Seiko, who runs the Headache Centers of Excellence, I believe there are 20 of them around the country right now. The newest guidelines, best practices for managing complex headache have Gamma Corps as first-line therapy, but we have not been breaking out by facility the revenue contributions.

speaker
Bruce Jackson

Okay. So Gamma Corps is the first-line alternative for these centers. What do you think needs to happen in order to get greater uptake from the VA system?

speaker
Dan Goldberger

So great question. We think we're still less than 1% penetrated within the VA hospital system. Every facility is different and has to be treated as a different customer. But in general, we start off in neurology, which is where the complex headaches are treated. And our goal is to work through the facility to women's health, to pain management, to health and wellness, and ultimately... to primary care. And so within each facility, we have a lot of opportunities to go deeper. Headache is treated in the emergency room and is treated in primary care in greater numbers than by the specialist departments.

speaker
Bruce Jackson

Okay. And then last question is on the study that's being conducted in Newcastle. Is that for Parkinson's and the release date for the data seems to have, like, moved out a bit. Is that just because of the standard data analysis and you're working with physicians who are very busy or is there some other factor involved there?

speaker
Dan Goldberger

So we really don't know. I wish I knew more. This is an investigator-initiated trial financed by the UK Ministry of Health and the European Union. The investigators are full-time clinicians. They had the last patient, last visit in December, late December of 2023, and we're anxious to see the data, and they will share the data with us when they share the data with us. It's completely out of our control. Okay, got it. Thank you very much for taking my questions. Absolutely. Thanks for your interest.

speaker
Operator

Our next question comes from William Pakula Ramakath with HC Wainwright. Please proceed with your question.

speaker
William Pakula Ramakath

Thank you. This is RK from HC Wainwright. A couple of quick questions. So, you know, the VA channel continues to grow and continues to grow at a very good clip. this quarter, as you said, you know, you did close to 130% growth year over year, though the number of centers grew only less than 30 centers, you know, compared to last year. So I understand some parts of it is probably the depth within certain centers, but how much assuming that you're not going to add more centers or not in big amounts from here onwards, how sustainable is this growth? And are there places in the current centers where you're not at all tapped and you're kind of asking your sales folks to go figure out these additional centers where you could commercialize GammaCore.

speaker
Dan Goldberger

Yeah, RK, you're absolutely on the right track. It's far more efficient for us to go deeper into a facility where we have existing business for at least two reasons. The first is that the supply chain folks know us and have loaded us into their computer systems. And the second is that once our sales guy has identified a champion within the facility, he has a reason or she has a reason to be in the facility and can spend additional time calling on other prescribers within neurology, for example, but even more importantly, calling on other departments within the facility. So we're coaching our team to go deeper within the facilities that are already opened up. The other driver we have is just old-fashioned feet on the street. We are scaling the business with what I call 1099 reps, right? These are independent agents. They get paid straight commission. They probably have two or three or four other products in their bag. that they are selling into the same customer, into the same facility. And as we have success, that success breeds success, and it's becoming more and more efficient for us to recruit additional new 1099 reps. So we can scale the business in that direction as well just by having additional feet on the street.

speaker
William Pakula Ramakath

Thanks for that. you know, talking about, you know, some of these new indications that you're looking at and also the recent data that you released on PTSD. When you look at the centers, you know, these are the places where you would see these additional indications or commercializing for additional indications as an opportunity. How much of these, how much of the feedback that you get from the VA hospitals are you kind of utilizing to think about new indications, you know, for Gamma Core? And just on the PTSD itself, you know, how soon do you think you can get that indication so that you can start commercializing for that as well?

speaker
Dan Goldberger

Yeah, so great question. I'm very superstitious about the FDA process, so I'm not going to speculate about the timing of getting the additional, the label extension. We are aware that there is off-label prescription of GammaCorp for PTSD in the VA hospitals, but also in our cash pay business. In the VA hospital system, we don't see the diagnosis, so we don't have a clear view as to what percentage of our prescriptions are for PTSD or Parkinson's or the other indications that we're working on, but we are aware that there is at least some off-label prescribing going on. Okay, thanks for that.

speaker
William Pakula Ramakath

On the tax stem business, you said that the second quarter could be flat. I understand that. But going into third quarter, September happens to be the fiscal year for the government. So do you, as you enter the next fiscal year, How are you thinking about, you know, growth? You know, can there be additional contracts coming through? Or is this a long drawn process? And it's really hard to read in terms of new contracts coming in in the next fiscal year. I'm just trying to think about the cadence of, I know you said it's very hard to predict the cadence of numbers, but at the same time, I'm just trying to get a feel for like, What are the ways that can be pushed and pulled on that number?

speaker
Dan Goldberger

Yeah, so we're already getting, I'll call them contingent purchase orders, and the contingency is around the DOD budget process. Things have settled down, but every time there was a continuing resolution in Congress, our purchasing contracting process came to a full halt. So we do have a funnel of these contingent purchase orders, but I have no visibility as to the timing of those contingent purchase orders, and we're not going to try and give any revenue guidance around it until we know for sure what the delivery and revenue recognition dates are going to be. Perfect.

speaker
William Pakula Ramakath

Thank you very much. Excellent quarter.

speaker
Dan Goldberger

Yes, thank you.

speaker
Operator

As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Walter Shanker with AMZ Partners. Please proceed with your question.

speaker
Walter Shanker

Close, anyway. Hi, Dan. A series of unrelated questions. There is published data, this is on the military, on learning and on improved learning and on improved performance by drone pilots. Do you have any color that you can comment on, on, you know, what type of areas in the military are buying this or is it still just for what type of units or just some sense?

speaker
Dan Goldberger

Yeah, so there's very little that we're allowed to say publicly, but several Army Special Forces battalions have acquired a significant number of handsets for pilot deployment, a similar number of Air Force Special Forces units, and then AMC, Air Mobility Command, which are the very large long-distance transport aircraft that the Air Force deploys. Those are the three areas that are in pilot deployment at this point. Okay.

speaker
Walter Shanker

Totally unrelated questions. You had briefly mentioned at some point, and I do a plug about my wife, that – One of the benefits, although there are many benefits, you've done some stuff on gastroparesis, is that GammaCore may help or does help people with some stomach issues. You had mentioned some people might be using it off-label in conjunction with the light wash drugs, which sometimes cause different stomach issues. Is that actually, is there any material comment you can make on that or A couple of doctors have tried it or who knows. It's always good to have something related to weight loss, by the way, in this market.

speaker
Dan Goldberger

I can certainly use something. What you're describing is anecdotal commentary that we've heard from several of our customers, especially in the functional medicine, integrative medicine, cash pay practices where they're dealing with complicated patients and they are prescribing drugs a lot of those new injectable weight loss drugs. Nothing that I would describe as scientific, certainly no prospective trials, but it's a lot of fun to hear the anecdotes that it's working as a combination therapy in weight loss and gastroparesis.

speaker
Walter Shanker

And lastly, now that Truvago Plus is, at least as I look at it, a cleaner sale. You buy it, you've got it forever, you keep recharging it, you know, you don't have to reload or anything. Have you thought about or where are you in possibly marketing it through other channels or other people beyond just your limited exposure on the Internet? I mean, theoretically, again, it could be at a drugstore, it could be at health nutrition stores, it could be, you know, QVC, you name it, lots of different places. Yes. What do you think about expanding beyond just you and the Internet?

speaker
Dan Goldberger

Yeah, I really appreciate the opportunity to expand on it. And, look, we think those are all very important 2025 initiatives. It's the first new product launch that the company has done in a long time with a new team of people. We wanted to keep a lid on it, so to speak, for the first 30, 60 days. Right now, it's going very smoothly. We haven't had any significant product problems, and so if we run another 30 days the way the first 30 days have gone, the return rates stay where they are, then I think you'll see us looking to more aggressively expand into a variety of other direct-to-consumer distribution channels, both brick and mortar as well as internet sales.

speaker
Walter Shanker

Okay. Thank you, Dan.

speaker
Dan Goldberger

Thank you, Walter. Appreciate your interest.

speaker
Operator

Our next question is from Nicholas Sherwood with Maxim Group. Please proceed with your question.

speaker
Nicholas Sherwood

Hey, guys. Congrats on the quarter. My first question is do you have any update on your agreement with Jerns Healthcare?

speaker
Dan Goldberger

So, you know, the update, and I think some of it was in our prepared remarks, most of the work is now on our side to develop prescriber champions. The back office is in place. And by back office, I mean the ability to have a prescription accepted at Jerns, adjudicated. They were fully loaded into their computer system. We, our field sales team, has to generate the demand, and they're just getting started doing that and, frankly, having a lot of fun doing it. We're getting excellent reception. You don't see it in the revenue yet, but I think we will before the end of the year.

speaker
Nicholas Sherwood

Awesome. Thank you for that, Carl. And then switching gears to TrueVega Plus, do you see any sort of, I guess it's not necessarily like, SaaS revenue, but do you see any sort of like recurring revenue coming from the app through in-app purchases or subscriptions?

speaker
Dan Goldberger

Yeah, that's in our product development pipeline for 2025 and 2026. It's absolutely the vision to take full advantage of the mobile app connectivity, not just for our product, but to interact with other health and wellness apps, you know, with Apple Health, and then the data can also become a value proposition, but not this year.

speaker
Nicholas Sherwood

Absolutely. And then one more of a high-level question. You had partnered with the NFL this last season. Have you received any further interest from them or any other sports leagues or athletes that you can speak about at this time?

speaker
Dan Goldberger

So a lot of interest, nothing that I can speak about publicly. And specifically the NFL research program, they won't even tell us which teams are using it, which is very frustrating as a football fan.

speaker
Nicholas Sherwood

Yeah, maybe DraftKings doesn't want you to find out either.

speaker
Dan Goldberger

Exactly.

speaker
Nicholas Sherwood

And finally, I think I may have missed these earlier, but what was the – VA DOD prescribing facility count and also the cash pay prescriber account?

speaker
Dan Goldberger

Yeah, plus handy, Brian. We're looking for our own numbers. 151 VA facilities, up from 124. And prescription prescribers 2023 up from 1,218. Awesome. Thank you so much.

speaker
Nicholas Sherwood

And thank you for answering all my questions. I'll return to the queue. Of course.

speaker
Dan Goldberger

Thanks for your interest.

speaker
Operator

We have reached the end of the question and answer session. I'd now like to turn the call back over to Dan Goldberg for closing comments.

speaker
Dan Goldberger

Thank you, operator. We appreciate everybody joining today's call. Our employees continue working tirelessly to deliver products and therapies that improve the health and wellness of patients and customers alike. The team's done a great job of staying nimble, scaling the business, responding to the needs of our customers, launching a new product, and all of that has resulted in the accelerating growth that we just reported. I also want to say thanks to the healthcare professionals and their patients for their loyal support of GammaCore therapy and to the growing number of consumers who have adopted Truvega products as a tool to improve their general wellness. You all have a great day.

speaker
Operator

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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