electroCore(ECOR) - 2024 Q2 - Quarterly Report

Financial Performance - Net sales for Q2 2024 reached $6.139 million, a 73% increase from $3.551 million in Q2 2023[10] - Gross profit for Q2 2024 was $5.301 million, compared to $2.966 million in Q2 2023, reflecting a 78% increase[10] - The company reported a net loss of $2.655 million for Q2 2024, an improvement from a net loss of $4.903 million in Q2 2023[10] - For the six months ended June 30, 2024, the net loss was $6.161 million, compared to a net loss of $10.770 million for the same period in 2023, representing a 42.5% improvement[15] - Total net sales for the six months ended June 30, 2024, were $11.582 million, compared to $6.331 million for the same period in 2023, representing an increase of 83.5%[33] Assets and Liabilities - Total current assets increased to $17.959 million as of June 30, 2024, up from $14.294 million at the end of 2023, representing a 26% growth[7] - The company’s total liabilities rose to $10.883 million as of June 30, 2024, compared to $8.660 million at the end of 2023, indicating a 26% increase[8] - Cash and cash equivalents were $10.302 million as of June 30, 2024, compared to $10.331 million at the end of 2023[7] - The accumulated deficit increased to $(171.365) million as of June 30, 2024, from $(165.204) million at the end of 2023[8] - The total stockholders' equity as of June 30, 2024, was $11.472 million, up from $7.064 million as of June 30, 2023, marking a 62.5% increase[14] Operating Expenses - Operating expenses for Q2 2024 totaled $7.892 million, slightly down from $7.954 million in Q2 2023[10] - Research and development expenses for Q2 2024 were $635,000, down from $1.155 million in Q2 2023[10] - The Company recognized lease expenses of $99,000 for the six months ended June 30, 2024, compared to $76,000 for the same period in 2023, reflecting a 30.3% increase[40] Cash Flow and Investments - The company experienced a net cash used in operating activities of $4.330 million for the six months ended June 30, 2024, compared to $9.172 million for the same period in 2023, reflecting a 52.8% reduction[15] - The Company's cash position as of June 30, 2024, was $14.2 million, following net proceeds of approximately $9.0 million from securities sales during the same period[29] - Marketable securities amounted to $3.9 million as of June 30, 2024, consisting entirely of U.S. treasury bills, with no marketable securities held at December 31, 2023[24] Stock and Equity - The weighted average common shares outstanding increased to 7.046 million in Q2 2024 from 4.751 million in Q2 2023[10] - The Company raised $8.3 million through the sale of common stock and warrants during the six months ended June 30, 2024[15] - The Company raised approximately $9.0 million from the sale of securities, with $1 million allocated to settle financial obligations to its legal counsel[46] - As of June 30, 2024, the total number of outstanding stock purchase warrants increased to 1,640,000, with a weighted average exercise price of $5.37[50] Operational Changes - The company has paused operations in Germany, with sales managed by its UK subsidiary[17] - The Company extended its lease in Rockaway, New Jersey for an additional 10 years, increasing the leased area from 13,643 square feet to 22,557 square feet[41] Legal and Compliance - The Company is subject to various legal claims, including stockholder litigation, which may result in substantial defense costs[62] - A material weakness in internal controls over financial reporting was identified due to an unauthorized payment based on incorrect vendor information[109] - The Company plans to implement measures to remediate the identified material weakness in internal controls[110] Future Outlook - The Company expects to continue incurring net losses as it works to increase market acceptance of its products, raising substantial doubt about its ability to continue as a going concern[28] - The Company is assessing the impact of recently adopted accounting standards but does not expect them to materially affect its financial position or cash flows[26][27]