electroCore(US:ECOR)2025-05-07 20:30PART I. FINANCIAL INFORMATION The company's financial information details its balance sheet, income statement, cash flows, and related notes Item 1. Financial Statements The company reported total assets of $16.0 million as of March 31, 2025, with net sales growing to $6.7 million Condensed Consolidated Balance Sheets Total assets decreased to $16.0 million as of March 31, 2025, primarily due to a reduction in marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,777 | $3,450 | | Marketable securities | $3,982 | $8,519 | | Total current assets | $11,972 | $16,300 | | Total assets | $16,041 | $20,471 | | Liabilities & Equity | | | | Total current liabilities | $7,856 | $9,152 | | Total liabilities | $11,676 | $12,927 | | Total stockholders' equity | $4,365 | $7,544 | Condensed Consolidated Statements of Operations Net sales increased by 23.4% to $6.7 million in Q1 2025, but the net loss widened to $3.9 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $6,719 | $5,443 | | Gross profit | $5,706 | $4,555 | | Total operating expenses | $9,528 | $8,404 | | Loss from operations | $(3,822) | $(3,849) | | Net loss | $(3,855) | $(3,506) | | Net loss per share | $(0.47) | $(0.53) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities significantly increased to $4.4 million in Q1 2025, with cash, cash equivalents, and restricted cash ending at $4.0 million Cash Flow Summary for the Three Months Ended March 31 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,355) | $(2,558) | | Net cash provided by (used in) investing activities | $4,500 | $0 | | Net cash provided by financing activities | $180 | $0 | | Net (de)increase in cash | $327 | $(2,482) | | Cash, cash equivalents, and restricted cash – end of period | $4,027 | $8,099 | Notes to Condensed Consolidated Financial Statements Key notes highlight liquidity challenges, revenue concentration with the VA, and the acquisition of NeuroMetrix, Inc - The company has a history of significant net losses and negative cash flow from operations, funding its activities primarily through the sale of securities3738 Management believes its current cash position and expected cash flow will be sufficient for at least the next 12 months41 - Revenue is heavily concentrated, with sales to the U.S. Department of Veterans Affairs (VA) and Department of Defense accounting for 70.3% of net sales in Q1 2025 and 71.2% in Q1 202442 Net Sales Disaggregation for Q1 (in thousands) | Channel/Market | 2025 | 2024 | | :--- | :--- | :--- | | By Channel | | | | Rx gammaCore – VA | $4,721 | $3,875 | | Truvaga | $1,106 | $385 | | By Geography | | | | United States | $6,206 | $4,994 | | United Kingdom | $451 | $385 | | Total Net Sales | $6,719 | $5,443 | - On May 1, 2025, the company completed its acquisition of NeuroMetrix, Inc. (NURO), which will now operate as a wholly-owned subsidiary7677 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes 23% year-over-year revenue growth to increased sales of Rx gammaCore and Truvaga, while managing liquidity challenges Overview electroCore focuses on non-invasive vagus nerve stimulation (nVNS) technology, with key products gammaCore and Truvaga, and recently acquired NeuroMetrix - The company's business is centered on its proprietary non-invasive vagus nerve stimulation (nVNS) technology91 - Key product categories include: - gammaCore: A prescription device for primary headache conditions - Truvaga: A direct-to-consumer general wellness product - TAC-STIM: A human performance product developed with the U.S. Department of Defense93949596 - The two largest customers are the U.S. VA (70.3% of revenue in Q1 2025) and the UK NHS (5.3% of revenue in Q1 2025)99100103 - The company acquired NeuroMetrix, Inc. (NURO) on May 1, 2025, to add the Quell® platform for fibromyalgia and chronic pain to its portfolio105 Results of Operations Net sales increased by $1.3 million (23%) in Q1 2025, driven by higher Rx gammaCore and Truvaga sales, with gross margin stable at 85% - Net sales for Q1 2025 increased 23% YoY, primarily due to a $0.8 million increase in Rx gammaCore sales to the VA and a $0.7 million increase in Truvaga sales114115 - Gross margin remained strong and consistent at 85% in Q1 2025, compared to 84% in Q1 2024, reflecting favorable product mix and increased sales116 - Selling, general and administrative (SG&A) expenses increased by 11% YoY to $8.9 million, driven by targeted investments in sales and marketing to support commercial efforts118 Liquidity and Capital Resources The company relies on securities sales and an ATM facility for funding, holding $8.0 million in cash and marketable securities as of March 31, 2025 - The company's cash, cash equivalents, restricted cash, and marketable securities totaled $8.0 million as of March 31, 2025126 - The company relies on an At-The-Market (ATM) facility to sell common stock for funding During Q1 2025, it raised approximately $0.2 million in net proceeds from this facility127 - Management believes its current cash position and expected cash flow from operations will be sufficient to fund operating expenses and capital requirements for at least the next 12 months from the issuance date of the financial statements129 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces foreign currency and interest rate risks but does not currently use hedging instruments - The company has foreign currency exchange risk related to sales denominated in British Pound Sterling and license revenue in Japanese Yen130 - Interest rate risk is limited to the company's portfolio of cash, cash equivalents, and short-term marketable securities, and is considered minimal132 - The company does not currently hedge its foreign currency or interest rate exposure132 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective135 - No changes occurred during the quarter ended March 31, 2025, that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting136 PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, other information, and exhibits Item 1. Legal Proceedings The company states that it is not currently a party to any legal proceedings that would have a material adverse effect on its financial condition or results of operations - The company believes there are no current legal proceedings or claims pending that would have a material adverse effect on its financial condition or operations This information is incorporated by reference from Note 14 of the financial statements70138 Item 1A. Risk Factors This section directs investors to the risk factors previously disclosed in the company's Annual Report on Form 10-K - The company refers readers to the risk factors detailed in its Annual Report on Form 10-K for the year ended December 31, 2024139 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None140 Item 5. Other Information The company disclosed that no director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements during the first quarter of 2025145 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL data files - The report includes a list of filed exhibits, primarily consisting of CEO and CFO certifications as required by the Sarbanes-Oxley Act and XBRL data files147