electroCore, Inc.

Greetings and welcome to the Electric Core fourth quarter and full year 2025 earnings conference call. At this time, all participants have been placed in a listen-only mode. Please make sure to mute yourself. Question and answer session will follow the formal presentation. A reminder, this conference call is being recorded. Earlier today, ElectroCorp published results for the fourth quarter and full year ended December 31, 2025. A copy of the press release is available on the company's website. I'd like to remind you that members on the call will make statements during the call that include forward-looking statements within the meaning of the federal securities law, 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. All forward-looking statements, including, without limitation, any guidance, outlook, or future financial expectation, or operational activity and performance, including any statements regarding first quarter 2026 and full-year performance and the path to profitability, 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 these risks and uncertainties associated with the company's business, please see the company's filings with the Security and Exchange Commission. Electric Corps disclaims any intention or obligation except as required by law to update or revise any financial projections, 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, March 19, 2026. It's now my pleasure to introduce Dan Goldberger, Electric Corps' Chief Executive Officer.

participating in today's ElectroCorp earnings call. Joining me today is Dr. Thomas Arako, one of our founders and investor and chairman of the ElectroCorp Board of Directors, and Joshua Lev, our chief financial officer. Before we begin, I want to express the privilege it is to address so many colleagues, partners, investors, and friends who have supported ElectroCorp since I took the CEO position in late 2019. Over the years, we've taken meaningful steps in building a great community. I'm deeply proud of what we accomplished and truly thankful for your support, as well as the support and hard work of all the employees who work tirelessly in making our non-invasive pain therapeutics available to patients who need them. With that in mind, I'd like to share an important personal decision about the next chapter for myself and for this organization. After thoughtful discussion with the board about the company's next phase of growth, I have made the decision to retire as CEO of Electric Core effective April 1st, 2026. When I joined in late 2019, I already was strengthening the company's financial position and establishing a focused commercial strategy. For the past several years, we've made substantial progress on those objectives, including building momentum in the VA channel, expanding our product portfolio, a stronger financial footing. With that foundation now in place, the Board and I believe this is the right time to begin a leadership transition as ElectroCorps moves into its next stage of growth. To ensure a seamless transition, the Board of Directors has appointed Joshua Lev as interim president. ElectroCorps is also hiring a new chief operating officer. These steps will provide stability and operational momentum while the board conducts a thorough search for my permanent successor. I look forward to continuing to support the company during the transition and to exploring new opportunities where my experience may be helpful. I step away knowing that ElectriCorps is in excellent hands and well positioned for continued success. I'm confident the leadership team will continue building on the progress we've made and drive the company forward in the next phase of growth. It's been an honor to lead this organization and serve you, our shareholders. Thank you for your unwavering support. I look forward to watching ElectroCorps thrive from the front. Now, the chairman, Dr. Errico, would like to share a few thoughts on strategy and the future.

Thank you, Dan. On behalf of the board of directors, I want to take a moment to recognize Dan Goldberg, and for the momentum the company carries forward today. As we look ahead, I'm pleased to share an update on our leadership transition, which is designed to ensure continuity and focus as we enter our next phase of growth. Effective April 1st, Joshua Lev, our Chief Financial Officer, will assume the role of Interim President, overseeing day-to-day operations while continuing to serve as CFO. Josh has more than 15 years of experience in finance and operations and has played a central role in guiding the company through several key milestones. He is well positioned to lead during this transition as we conduct a search for a permanent successor. In April, we will welcome Michael Fox as our new Chief Operating Officer. Michael joins us from ProMedTech, where he served as Chief Revenue Officer. He brings more than three decades of experience across pharmaceuticals, biotechnology, and medical devices with deep expertise in complex federal markets, including the VA system. His operational leadership continue to scale across the organization. With this transition in place, the board and management team remains fully focused on executing our strategy of increasing sales within covered entities such as the VA system and driving long-term value through market expansion into general wellness with our TrueVega product offering. Moving now to the business. we remain encouraged by the continued momentum of our non-invasive vagal nerve stimulation or NVNS platform. Before Josh Lev reviews the financials, I'd like to briefly highlight the clinical foundation supporting our portfolio. Our flagship GammaCore device is supported by a substantial body of scientific evidence, including more than 20 peer-reviewed publications. and multiple randomized controlled trials such as ACT-1, ACT-2, PRESTO, and PREMIUM. These studies have demonstrated statistically significant reductions in migraine and cluster headache frequency, intensity, and duration. GammaCore is FDA cleared for both acute and preventative treatments in adult and adolescents and real-world adoption continues to build. For example, UK audit data shows that a meaningful portion of cluster headache patients achieve clinically significant response rates alongside measurable cost savings compared to standard care. Beyond GammaCorp, exploratory studies traumatic brain injury, and inflammatory conditions related to COVID-19 highlighted the potential for broader anti-inflammatory potential of NVNS. These studies have shown encouraging signals across fatigue, quality of life measures, and anti-inflammatory biomarkers. At the same time, ongoing trials in areas such as PTSD, long COVID, substance abuse disorder, musculoskeletal pain, and concussions supported by partnerships including the NFL and NFLPA funded research support our long-term strategy for indication expansion. In addition, our QOL device is supported published in well-regarded journals. These studies demonstrate efficacy across multiple pain-related conditions, including difficult-to-treat fibromyalgia, further strengthening the clinical foundation of our portfolio. On the consumer side, Truvega continues to gain traction as a wellness product focused on stress reduction, sleep quality and emotional well-being through parasympathetic nervous system activation. Truvega has recently received recognition from major lifestyle publications and engagement across social and digital channels continues to grow. For example, national media outlets like Women's Health and Men's Health have been driving website traffic. Miranda Kerr mentioned Trivega on the Skinny Confidential podcast. Affiliates like TruMed, Ben Greenfield, and Luke Story have been promoting Trivega, and Trivega is now available through online retail outlets like Best Buy and Rehab Mart. Independent in-home studies indicate high levels of user-reported calmness and sleep improvement after consistent use. Importantly, this momentum supports diversification of our revenue mix and highlights the scalability of our NVNS technology in direct-to-consumer channels. The expanding clinical validation across our product lines continues to support prescription growth, payer engagement, and international expansion. We believe this positions the company well for sustained revenue acceleration and long-term value creation as we bolster our commercial team with VA governmental specialists to further execute against our pipeline and strategic priorities while maintaining our attention on operating efficiency to progress towards profitability over time. And now I will turn the call over to our interim president and CFO, Joshua Leves, to walk through the financial results.

Thank you, Dr. Errico. Before reviewing the financial results, I want to briefly acknowledge the leadership transition announced earlier. Dan has played an important role in shaping the company over the past several years, and the strategy we have in place today reflects that work. On a personal note, I've learned a great deal from working with Dan, and he has been a strong leader for the organization. Our focus remains on executing against that strategy, extending adoption across the VA system, and continuing to scale our wellness platform. Here are the details of our fourth quarter and full year 2025 operating performance. Electrical delivered another year of strong top-line revenue growth, extending our growth trend and exceeding both revenue and EPS analyst consensus. The VA hospital system remains our largest customer and continues to grow. and the adoption of our non-invasive pain therapeutics. Trudeva sales also showed great strong primarily for our e-commerce store at www.trudeva.com and an expanding network of affiliates who actively promote Trudeva to their audience. Revenue in the fourth quarter of 2025 was our highest ever, reaching a record of $9.2 million, up 31% year-over-year, and bringing our full-year 2025 revenue to $32 million, or 27% over full-year 2024. The certified revenue increased 23% year-over-year to $26 million by continued growth of Camacor and Quell within the VA hospital system. Requiring the Quell assets in May 2025, Quell Fiber Myalgia generated $1.5 million in revenue. As of December 31, 2025, 200 VA facilities purchased Damacor products, up from 170 a year ago. Approximately 13,400 VA patients purchased the Damacor device, and based on our analysis, we estimate this represents roughly 2% penetration of the addressable VA headache market. Given the scale of the VA system and the number of patients experiencing headaches, related to PTSD and mild traumatic brain injury, we believe there may be a significant opportunity for continued growth. For this opportunity, we expanded our VA sales presence during 2025 by adding both internal team members and contracted representatives. In April 2026, we will also welcome Michael Fox as Chief Operating Officer, who has extensive experience commercializing products within federal healthcare systems help accelerate adoption, and expand our commercial reach. Turning to our general wellness channel, fourth quarter revenue reached $1.4 million, representing 31% year-over-year growth. Full-year general wellness revenue totaled $5.5 million, an increase of 97% compared to 2024. It was primarily driven by $5.4 million in Travega sales, up 93% from 2024. While TrueVega revenue was flat sequentially, the first quarter included a one-time $500,000 order associated with a third-party clinical trial. Including that order, TrueVega revenue grew approximately 40% sequentially. The current advertising spend, or ROAS, for the period was approximately 2.10, meaning for every dollar spent on media, we generated nearly $2.10 a ROAS from $1.80 in 2023-2025 was primarily driven by a seasonal increase in sales during the holiday season. Return rates across our e-commerce platforms have increased slightly but remain at approximately 12% to 15% in the required period. We believe that increasing ROAS is a result of the shift away from Amazon and the team's increase in driving sales to other direct-to-consumer platforms. As we look forward to 2026, we expect to expand the potential applications for our NDNS platform while introducing additional wellness offerings, including Quell Relief for lower extremity pain. We are also developing our next-generation mobile application designed to complement Tritiga and Quell, which brings more personalized and data-driven user experience, which could support future recurring revenue opportunities. Based on the opportunities ahead, we are investing in people, marketing, and product development to accelerate growth in 2026 to 2027, while maintaining discipline around operating assistance. Coming briefly to the full year 2025 financial results. Net sales in 2025 increased 27%, $32 million. given by growth of prescription, GammaCorp, and Quell fibromyalgia products in the VA system, as well as increased sales of our non-prescription food data general wellness products. We expect the majority of 2026 revenues to continue coming from the U.S. Department of Medicine. This process increased to $27.8 million after the year ended December 31, 2025. The margin was 87% compared to 85%. for the year 2024. Research and development expense of $2.7 million is increased by approximately $375,000 compared to the prior year. This increase is primarily related to the development work on our Damocor Emerald and our next-generation mobile applications. Selling, general, and administrative expense of $38.2 million is year-ended September 31, 2025, by $7 million compared to $31.2 million for the previous year. Sales and marketing increased by $4.3 million from the prior period. Sales and marketing was primarily driven by a $3.8 million increase in burial expenses, which contributed to a $6.9 million increase in sales. General and administrative expense increased by $2.7 million from the prior year. This increase was primarily driven by $800,000 increase in legal fees and narrowly associated development activities, $500,000 associated with one customer, $300,000 investments in IT and systems, and $200,000 of increased transaction fees associated Total operating expense in the full year 2025 were approximately $40.9 million as compared to $33.6 million in the full year of 2024. Other expense of $800,000 for the year ended December 31st, 2025 increased by a million dollars versus the prior year period. The increase was primarily attributed to non-recurring expense including a half-a-million-dollar change to the estimated liabilities payable to pre-closing shareholders of Neurometrics pursuant to a PBR expense and an interest expense associated with our term debt financing with Acme. Other income for the year ended December 31, 2024, which is primarily of interest. Net loss for 2025 was $14 million. or $1.65 per share, compared to net loss of $11.9 million, or $1.59 per share in 2024. The increase in net loss is primarily attributed to an increase in operating expense and other expense as well. But just as you've begun that loss, the school year 2025 was $8.7 million, compared to $9 million in the prior year. change in adjusted EBITDA primarily reflects the gap net loss offset by adjustment for neurometrics acquisition-related items, for reserve and debt expense, and IP litigation relief. A reconciliation of gap net loss and non-gap adjusted EBITDA net loss is provided in the financial statement table included and marketable securities as of December 31, 2025, for approximately $11.6 million, and approximately $12.2 million as of September 31, 2024. Looking ahead, we remain focused on accelerating growth in our high-margin persistent devices, particularly within the VA, by adding leaders such as Michael Fox, who spent a career successfully commercializing products in the federal channel, while also continuing to build durable and efficient general wellness channels. We believe our full-year 2026 revenue has the potential to continue growing at approximately . However, in light of the leadership transition, we are not issuing detailed guidance at this time and expect to revisit formal guidance when appropriate. We believe the company is well-positioned in terms of driving growth and the standard option in the VA system. We know our wellness platform and maintain this point on operating efficiency, drive long-term shareholder value and profit. I would now like to turn the call over to the operator for Q&A.

Thank you, Josh. Thank you, Josh. Thank you all for participating. We're going to now open the call up for the Q&A session. From Zoom, there are two ways you can participate. The first is to use the Raise Your Hand icon, which is at the bottom of your screen. Clicking this will alert the operator that you want to be called on to ask a live question. And so you'll be placed into a queue, called on. But just note, you're going to be on mute until you are called on. The second way to participate in the Q&A is to use the Q&A widget, which will allow you to type in and text a question in. We will take questions there as well. Just note, if we run into a time constraint, someone from the IR team will get back to you if your question is not asked on today's call. With that, we will now begin and pause a moment to build a queue. Our first question comes from Jeffrey Colt of Lattenburg. Jeffrey, can you please unmute?

Hello, Dan and Josh. Thanks for taking our questions. And, Dan, congrats on all the accomplishments, and we wish you well. Thank you. So I guess, Percy, could you talk about the channels? Talk about the VA and talk about DTC for both Gamma Corps as well as for Quell, where you anticipate in 26. I know that you've done a great job in adding centers of excellence at VAs. How might that look into 2026 and steps and thoughts about DTC business for both Truvega as well as Quell?

Jeff, thanks so much. Appreciate you joining the call and always appreciate your great questions. From the VA channel, you know, we've had a lot of acceleration over the course of the last year in 2025. And we've been pretty adamant that we believe the way for us to go ahead and grow that is to increase the number of boots on the ground, either through W-2 employees or through a 1099 network. And We've done a really nice job over the course of the 2025 of increasing those 1099s, which is a variable expense as it relates to the overall sales and marketing, right? It doesn't add any headcount. But we're really enthusiastic that we have a new commercial leader joining, and Michael Fox, who's joining mid-April. Michael comes to us with a background in selling primarily into the federal channels. He has years of experience and actually decades of experience in building out commercial-related teams, primarily focused in accelerating growth within those federal channels, particularly in the VA. So as we think about, you know, how we think the VA is going to grow over the course of 2026, while we haven't given any specific guidance to that, our thought is that we have an existing team which has been proven successful to go ahead and grow within those channels. And then we've got Michael who's going to come in and bring his know-how, his knowledge, and hopefully some of his relationships to help accelerate growth within the VA. Okay. When it comes to the direct-to-consumer channel, I think what we realized earlier on this year is we're much more effective in terms of our efficiency of media spend when we're focused primarily in driving traffic to our own website at www.truvega.com. And the way that we've been able to go ahead and grow that most efficiently is by increasing the number of affiliates and influencers that we have that are out there that are talking about ElectraCore and our TrueVega product. So as we look into 2026, our goal is to focus on identifying more partnerships, such as the Miranda Kerr relationship that we talked about earlier, Rehab Mart, Best Buy, things of that nature that will help us with the growth in the channel that will help grow around the TrueBeta.com traffic.

Okay, that's perfect. And then one more as a follow-up. Can you talk about OUS channels and any expectation into 26 OUS and any specific geographies worth calling out today?

Yeah, you know, from our perspective, NHS England is still a channel that's worthwhile in terms of mentioning as it just relates to our overall revenue. We have the most adoption within the NHS in England, but, you know, the NHS does have a bit of a bottleneck because of the way that the rules are written as it relates to who specifically has to write the prescription in order to get prescriptions adjudicated and ultimately fulfilled. through the program. While we have interests in other countries outside of England, we've got distributors in locations such as Belgium where we have some reimbursement. We're still developing the infrastructure, if you will, or the adjudication infrastructure more than anything. to make sure that there's a pathway for which patients can go ahead and actually either get this covered or pay through cash providers. And we're doing that through third-party distributors. So right now I'd say NHS England is really going to be our focus as it relates to the main driver of OUS revenue. But as additional distribution partners come available and reimbursement opens up, we'll be sure to update the street on that.

Thanks so much for taking our questions and best of luck now.

Great, thank you. Our next question comes from Charles Wallace of HCW.

Hi, this is Charles on for RK. Thanks for taking my questions, and Dan, congrats on all you've done for Electric Core, and it was great working with you. Thank you. So for my first question, with the changes with management and the new hiring of Michael Fox and increased responsibilities for Joshua, I wanted to better understand these new leadership dynamics. And so will Michael focus primarily on kind of the VA business while Joshua handles the wellness and ex-VA? Thank you.

Charles, great question. Yeah, so the short answer to your question is yes, but. Charles, I'm sorry, Michael is really, you know, has a strong background and history in driving and building commercial organizations. So our expectation is going to be that Michael's going to need to come in here, you know, get his feet wet a little bit and get a firm understanding as to how our sales operations currently work. But we believe that Michael's background primarily around commercial, and whether that's not just VA, but it could be other federal systems as well, it could also be other commercial systems perhaps such as Kaiser or commercial insurers, is really going to fall under Michael's purview. As it relates to the day-to-day activities as well as Truvega, right now the plan is for that to fall in my court.

Perfect. And then can you remind us of the prior VA contract? And with the onboarding of Michael, is there going to be any adjustment to this contract?

Great question. You know, at the moment, the answer is I don't know, but I don't think so. Our VA contract already has our products listed on it. The name and who's, you know, at the helm of an organization doesn't really necessarily change the nature of the contract in its own right. That said, you know, Michael is coming to us with years and decades of experience in selling to these different channels. So if there are opportunities for us to make that contract more efficient for both ElectriCorps or for the VA, for that matter, for the customer, then we're we would consider it.

Great. And then for my final question, so, you know, Dan's kind of been the architect on kind of tax stim in the military channel. So with him leaving, does that mean that there might be a de-emphasis on the tax stim product?

No, I don't think so. You know, TACSIM has always been a lumpy business for the company, and we still have a robust pipeline of different military groups and military organizations that are of interest. If anything, I think that there could be an opportunity here to maybe pull through some of that or accelerate. You know, as mentioned before, Michael Fox's experience isn't just necessarily in the VA. It's all federal systems. So I do think that there could be, doesn't mean that there will be, but there could be an operation to maybe pull forward some of those revenue opportunities because we have someone that's been in-depth in working with the Hill and different military organizations.

Great. Thanks for taking all my questions.

Yeah, my pleasure. Thanks.

Our next question comes from Charles Wallace. Okay, let's go to Jeremy Perlman. Jeremy, do you want to unmute?

Thank you for taking my question. First, really, you mentioned earlier on the call the QWEL relief. Is that going to be sold into the VADOD channels? Is that going to be in general wellness? Also, is that a first half or second half 26 event? And And is revenue from that going to be baked into the guidance, or do you think anything from any revenue generated would just be, you know, icing on the cake?

Hey, Jeremy. Thanks so much for the question. So our Quell relief product, which is also, you know, internally we know is Quell over-the-counter, is technically an over-the-counter product, so it's not technically a general wellness product. Our plan is to launch that product in the first half of 2026. Our expectations for that product are similar to how when we originally launched Truvega. I'm not sure if you recall, but we did a very soft launch early on just to see what kind of access and traction we got. The Quell brand itself has legacy products. users and legacy demand. And we're hoping that by doing a soft launch of the program, we could start getting a sense as to where to best spend our media dollars, which will then give us a more robust plan as to how we go ahead and grow that into its own product category. But to answer your question, right now when we look at our 30% guidance that we've given year over year, anything that would come out of the Quell OTC or the Quell Relief product would be incremental to that.

Okay, understood. Great. And then maybe if we could jump to your return on advertising spend. You said it was 2.1x this quarter, and you did mention on one of the earlier questions you are trying to identify more partnerships to help growth. Is there a goal for 2026, and how much can you really increase that return? You can get into the 3x range even more, or is it an incremental gain?

That's a fantastic question. The true answer is it really depends. We have a team of dedicated people that look at our return on advertising spend on a daily basis, and they move our media dollars around based off of where we're getting the highest efficiency or the highest return on our investment. From what we've seen in the category, we think, you know, industry would be, you know, somewhere between the two to two and a half range. There have been times within True Vega's lifespan that we have actually achieved greater than 3% return on media spend. But typically what happens is the more efficient you get over time in a particular channel, that efficiency then hits its peak. you know, its peak and then starts coming down and you have to find different avenues. So, you know, to answer your question, I think that our goal for the year is going to try to have that above two. Having that above two or $2 of revenue for every dollar of media is a good place as a sort of conservative number. And then our expectation would be is that we try to hover around that, call it between two and 2.5 on an average basis for the year.

okay understood and then this last question you know in the past you've what maybe you could up any updates on your insurance reimbursement coverage and maybe what do you think the biggest barriers to broader reimbursement adoptions are you're facing you know it's always been it seems like it's been a struggle over time thanks yeah thank you thank you so just from an update point of view i think the biggest opportunity we have in front of us is the work that we've been doing with kaiser

We've spent some time talking about it in the past. Earlier on in this year, we finally got on contract with Kaiser. So not only are we on formulary, but we're also on contract. That allows us to give us a license to sell, if you will, within the organization and gives prescribers an easier opportunity to actually prescribe the product itself, but it's not necessarily the end-all, be-all. We've spent the better part of the last quarter, and within 2026, what we plan to do is spend more time trying to develop the right KOLs and subject matter experts, advocates for the product within the system. I think Kaiser will remain to be our largest sort of opportunity, if you will, as it relates to from an insurance point of view, where can we get coverage? And the reason why I say that is Kaiser is the largest of these managed care systems. Typically, you know, they're kind of like a beachhead strategy. If you can get Kaiser and show other managed care systems that it works, other managed care systems will follow suit. So right now, you know, we've – Guided in the past that we've got dedicated resources focused primarily on trying to get Kaiser up and running. If we do, our plan would be to leverage that success and turn it into additional adoption throughout other managed care insurers.

And you think that could be a 2026 event?

No, I would think that Kaiser, some Kaiser success, the plan is or the hope is for it to be in 2026. I think other additional insurers would be after that. It would be 2027 and 2028.

Okay, got it. Thank you for taking my questions. Have a nice night. Thank you.

And Josh, I'm going to turn the call back over to you for a closing statement that has exhausted our questions from live callers.

Well, great, Rob. Thank you so much. Just wanted to thank everyone for the opportunity and for joining us today. I want to recognize the team for their continued hard work and their commitment to our patients, to the healthcare providers, and to our customers, especially as we go through this transition. I also want to thank our shareholders for their continued support. Before we conclude, I'd like to extend our sincerest appreciation to Dan for all of his leadership and the foundation that he's leaving behind. We're excited about the opportunities ahead and remain focused on execution, disciplined investment, and long-term value creation for our shareholders. On behalf of myself, the employees of Electricorps, and everyone who has benefited from your leadership, Dan, thank you for your dedication, your vision, and the lasting impact you've made on the organization. We wish you the very best in your retirement and in the next chapter ahead.

That concludes today's call. Thank you for your participation.