electroCore(ECOR) - 2020 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2020 were $733,771, a 79% increase compared to $409,601 in Q1 2019[16] - Gross profit for Q1 2020 was $435,656, compared to $251,810 in Q1 2019, reflecting improved operational efficiency[16] - The net loss for Q1 2020 was $7,959,349, compared to a net loss of $13,861,530 in Q1 2019, indicating a 43% improvement[16] - The company reported a basic and diluted net loss per share of $0.27 for Q1 2020, an improvement from $0.47 in Q1 2019[16] - The company reported a net loss of $7.96 million for the three months ended March 31, 2020, compared to a net loss of $13.86 million for the same period in 2019, representing a 42% improvement in losses year-over-year[40] - Net loss from operations improved to $7,959.3 million for the three months ended March 31, 2020, compared to a net loss of $13,861.5 million in the prior year, reflecting a reduction of $5,902.2 million[139] Cash and Liquidity - Cash and cash equivalents increased to $15,620,496 as of March 31, 2020, from $13,563,791 at December 31, 2019[11] - The company had cash and cash equivalents of $15.62 million as of March 31, 2020, compared to $6.95 million at the end of the same period in 2019, indicating improved liquidity[27] - The company generated net cash used in operating activities of $8.38 million for the three months ended March 31, 2020, an improvement from $16.40 million for the same period in 2019[27] - The company entered into an equity facility purchase agreement with Lincoln Park Capital Fund, allowing it to sell up to $25 million in common stock, which is expected to provide additional funding[41] - The company received approximately $5 million in aggregate proceeds from sales of common stock to Lincoln Park and a private placement transaction in April 2020[42] - The company entered into a loan for approximately $1.4 million under the Paycheck Protection Program (PPP) as part of the CARES Act[43] Operating Expenses - Total operating expenses decreased to $8,448,840 in Q1 2020 from $14,462,822 in Q1 2019, a reduction of approximately 41%[16] - Selling, general and administrative expenses fell by $4.4 million or 40% to $6,560.7 million for the three months ended March 31, 2020, primarily due to reductions in personnel and non-personnel costs[130] - Research and development expenses decreased by $1.9 million or 56% to $1,523.1 million for the three months ended March 31, 2020, due to significant reductions in near-term investment[129] Assets and Liabilities - Total assets decreased to $26,364,264 as of March 31, 2020, down from $35,461,679 at December 31, 2019[11] - Total liabilities reduced to $8,630,482 as of March 31, 2020, compared to $10,564,561 at December 31, 2019[11] - Current liabilities decreased to $7.35 million as of March 31, 2020, from $9.14 million at December 31, 2019, showing improved short-term financial health[11] Strategic Focus and Challenges - The company is focused on continuing its research and development efforts despite the challenges posed by the COVID-19 pandemic[8] - The company has focused on the commercialization and development of non-invasive Vagus Nerve Stimulation therapies for primary headache conditions[29] - The company has experienced significant net losses and expects to continue incurring losses as it works to increase market acceptance of its gammaCore therapy[39] - The company expressed substantial doubt about its ability to continue as a going concern within one year due to insufficient cash flow and liquidity[160] - Future operations depend on the ability to increase revenue, reduce operating expenses, and secure additional funding through equity or debt sales[160] Inventory and Expenses - Inventory as of March 31, 2020, totaled $890,992, with reserves for obsolete inventory amounting to $287,544[64] - Lease expenses for the three months ended March 31, 2020, were $119,650, a decrease from $199,654 in the same period of 2019[66] - The total future minimum lease payments as of March 31, 2020, amounted to $2,533,962, with $487,694 due in the remainder of 2020[68] Regulatory and Market Actions - The company submitted an Emergency Use Authorization application to the FDA for gammaCore therapy related to COVID-19 respiratory symptoms[115] - The company terminated its Premium II clinical trial in April 2020, resulting in no ongoing company-funded studies[116] - The company suspended its full-year revenue guidance on March 23, 2020, due to the impact of the COVID-19 pandemic[123]