electroCore, Inc.

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

Thank you all for participating in today's Electric Core earnings call. Joining me today is Josh Lev, our Chief Financial Officer and our investor relations firm, FNK IR. Earlier today, ElectriCorps published results for the fourth quarter and full year ended December 31, 2024. A copy of the press release is available on the company's website. I apologize for the late start this afternoon. We are in Washington for meetings at the FDA this week. Before we begin, I'd like to remind you that management will make Gage and 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. You should not place undue reliance on these statements. or 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 March 12, 2025. For those of you who may be new to our company, ElectroCore was founded in 2005 to commercialize the use of our proprietary non-invasive vagus nerve simulation 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, ElectroCore 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 and human performance. Our pipeline of possible indications and products continues to grow as clinicians, researchers, and wellness advocates conduct investigator-initiated trials to advance the benefits of non-invasive vagus nerve stimulation. We've demonstrated rapid growth for several years, resulting in a five-year compound annual growth rate of approximately 60%. Revenue for 2024 was $25.2 million, up 57%. In the fourth quarter, we recorded revenue of $7 million, our ninth consecutive record revenue quarter, and a 36% increase over the fourth quarter of the prior year. Total revenue, excluding taxed in, increased by Full-year gross margins were 85% as compared to 83% last year, and we narrowed our net loss by 37% for the year. We expect our gross margins to remain in the mid-80s in spite of the trade policies currently being implemented by the new administration. Our supply chain does not currently involve geographies subject to the recent tariff news, and we continue to work on mitigating any impact on our supply chain. We're making progress towards positive cash flow from operations and gap profitability as revenue increases, gross margins hold steady, and we maintain discipline around operating expenses. Josh will discuss the financials in more detail later in the call. We launched our U.S. 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 or NHS in the United Kingdom, cash pay sales through prescriber professional channels, and through certain managed care systems in the United States. We currently have about 30 million covered lives in the U.S., Cash-paid patients can often use their HSA, FSA accounts if they do not currently have insurance benefits. We launched two new non-prescription general wellness product lines in 2023. Trivega is a direct-to-consumer health and wellness brand, and TaxSim is directed towards human performance for active-duty military personnel. The VA hospital system continues to be our largest customer. 9.1 million covered lives across approximately 1,300 healthcare facilities. Sales in the VA channel grew 85% to $17.8 million in the full year ended December 2024 from $9.6 million in 2023. Sales in the VA channel grew 47% to $4.6 million in the fourth quarter of 2024 from $3.1 million during the fourth quarter of 2023. 170 VA facilities have purchased prescription GammaCorp products through December 31, 2024, as compared to 147 through December 31, 2023. The VA Hospital Administration 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 continue to make our therapy available either through our federal supply schedule contract or via our distribution partnership with level government services. Since 2022, we've dispensed GammaCore devices to approximately 8,500 veterans leveraging these contracting mechanisms, representing approximately 1.5% of the total addressable headache market within the VA system. Truvega is positioned as a direct-to-consumer general wellness product for stress, relaxation, quality of sleep, and mental acuity. To the year ended December 2024, Truvega net sales were $2.8 million, a 174% increase over 2023. In the fourth quarter of 2024, Truvega net sales were approximately $1.2 million, a 271% increase from the fourth quarter of 2023. Our revenue return on advertising spend was approximately 2.7 for the full year 2024 and 2.99 for the fourth quarter of 2024. In other words, during 2024, for every $1 we spent on media, we generated $2.70 of revenue. Our fourth quarter metric of 2.99 increased in part because of seasonal purchases associated with the holidays. Truevega return rates remain steady at approximately 11% to 12% of shipments for the full year and fourth quarter, 2024. Since launching Truevega, we've sold more than 11,500 handsets, and customers have conducted approximately a half a million sessions using the mobile app. We believe that the Truevega business will continue to scale if we can maintain or improve these metrics. Most of our Truevega revenue comes www.truvega.com. Following the successful launch of Truvega Plus in April 2024, we began exploring additional channels to reach consumers, including influencers, affiliates, and resellers. Earlier this year, we launched on the Perks at Work platform, which boasts 30 million users globally across 90,000 companies, representing 70% of the Fortune 1000. In February 2025, we launched Truvega Plus on Amazon. For the full year ended December 31, 2024, we recorded $1.2 million of tax SIM sales as compared to $1.7 million during the same period last year. Tax SIM for human performance is being sold to select Air Force 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. We have a growing sales funnel for TACSIM, but the DOD acquisition process is opaque and lengthy. Revenue from this product line will be hard to predict as active duty units purchase in bulk for pilot deployment. Our U.S. prescription GammaCore channel recorded revenue of $1.5 million during the full year of 2024, down 15% from 2023. There were 2,600 cumulative revenue-generating cash pay prescribers as of December 31, 2024, up from 1,840 on December 31, 2023. As expected, some of these customers have migrated to the Truvega brand as awareness grows, and we continue modeling flat revenue from this category for the time being. Ninety-two new Truvega Plus partners, including 32 GammaCorp customers, have added the Truvega product line to their accounts. Last year, we announced the distribution agreement with Jones Healthcare LLC that gives us access to a certain managed care health system. Approximately 30 prescribers have written GammaCore in this channel, and we are now processing one or two prescriptions per month. I remain optimistic that we are slowly gaining awareness and traction, and adoption will come over time. Revenue from channels outside the United States of $1.9 million for the full year ended December 31, 2024 were flat as compared to $1.8 million for the full year ended December 31, 2023. Most of our OUS revenue continues to be generated by the United Kingdom by prescriptions, gamma core sales funded by NHS, and we model flat revenue from this category for the time being. Now I'll turn to our business development activities. In December, 2024, we announced that ElectriCorps has entered into definitive agreement to acquire NeuroMetrics, giving us access to the Quell platform and accelerating our mission to become the clear leader in the bio-electronic health and wellness sector. The markets we are pursuing are massive. US consumers spend nearly $20 billion annually out of pocket for chronic pain treatments. It's estimated that approximately 6% of U.S. adults suffer from fibromyalgia, and there are few credible treatment options available today. The acquisition is on track to close in the second quarter of 2025. Neurometrics is a publicly traded company on NASDAQ under the ticker NURO. Neuro is a commercial-stage, non-invasive, bioelectronic health and wellness company with two product categories – Quell, a wearable app and cloud-enabled neuromodulation platform that is indicated for the treatment of fibromyalgia symptoms, known as Quell Fibromyalgia, and lower extremity chronic pain, Quell 2.0. And separately, the DPN check, a point-of-care screening test for peripheral neuropathy. Our focus for this transaction is to accelerate the commercialization of the prescription Quell Fibromyalgia to leverage and expand the QWEL mobile application and health cloud platform for existing and future ElectraCore products. The combination of GemaCore and QWEL Fibromyalgia creates a diversified advanced portfolio of prescription products for non-invasive and non-pharmaceutical treatment of chronic pain. In the future, QWEL 2.0 for lower extremity pain may be added to our non-prescription direct-to-consumer brands. This acquisition may enhance our ability to become the clear leader in the bioelectronic health and wellness sector. Quail fibromyalgia is a prescription non-invasive nerve simulation device, a similar approach to ElectroCore's product suite. Quail fibromyalgia is FDA-authorized, covered by 27 issued U.S. utility patents, and Neurometrics invested more than 10 years and tens of millions of dollars in clinical work and product development. Quell fibromyalgia provides flexible, precise, high-power nerve stimulation in a form factor the size of a credit card. We're excited about the acquisition of neurometrics and are confident that we can leverage our established distribution channels, especially the VA hospital system, to accelerate adoption of the Quell fibromyalgia solution. More information about neurometrics can be found at www.neurometrics.com. On February 27, 2025, and subsequent to the end of the fourth quarter, we announced a distribution agreement with Spark Biomedical, giving us access to the Sparrow Ascent product line, an FDA-cleared, non-invasive, transcutaneous auricular neuromodulation device available by prescription for the treatment of opioid withdrawal symptoms. We plan to offer Sparrow in a limited number of VA hospital sites beginning in the second quarter of 2025. If successful, we hope to expand distribution later this year. We believe the total addressable market in the United States for Sparrow is $2.4 billion associated with opioid detox and another $3.7 billion in relapse prevention. More information on Spark Biomedical can be found at www.sparkbiomedical.com. Before I hand the call over to Josh for a review of our financials, I'd like to take this opportunity to thank Dr. Charles Theopolis for his longtime support of Electricorps. On February 28, 2025, we announced the resignation of Dr. Theopolis from our board of directors. As a founder and patient investor of Electricorps, we deeply appreciate his support for the company and wish him all the best. Now, I'll turn the call over to Josh for a review of our financials. Josh.

Thank you, Dan. Net sales for the year-ended 2024 were $25.2 million, an increase of 57% as compared to $16 million for the full year-ended 2023. The increase of $9.2 million is due to an increase in The increase in gross profit was primarily driven by the increase in net sales. Gross margin was 85% for the full year of 2024 as compared to 83% in the full year of 2023. Total operating expenses in the full year of 2024 were approximately $33.6 million as compared to $32.5 billion in the full year of 2023. Research and development expenses Selling, general, and administrative expense in the full year of 2024 was $31.2 million as compared to $27.2 million in the full year of 2023. This increase was primarily due to greater variable sales and marketing expenses consistent with an increase in sales. In 2025, we plan on continuing to make 2021 significant improvement was primarily due to the increase in net sales of $9.2 million full year of 2023. These improved results are also primarily due to increase in 2024 net sales and gross profits as compared to the same period in 2023. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in today's press release. Cash, cash equivalents, from $14.7 million for the full year of 2023. And now, I'll turn the call back to Dan.