electroCore(ECOR) - 2023 Q2 - Quarterly Report

FORM 10-Q General Information This report is a Quarterly Report (Form 10-Q) for electroCore, Inc., covering the period ended June 30, 2023 - This is a Quarterly Report (Form 10-Q) for the period ended June 30, 2023, filed by electroCore, Inc., a Delaware corporation[1][2][3][4] Registrant Status | Status | Indication | | :------------------------ | :--------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of August 3, 2023, the registrant had 5,985,043 shares of common stock outstanding[6] Table of Contents This section provides an organized listing of all major sections and subsections within the quarterly report References to electroCore This section clarifies the terminology used throughout the report to refer to electroCore, Inc. and its subsidiaries - References to 'the Company,' 'electroCore,' 'we,' 'us' and 'our' in this report refer to electroCore, Inc. and its subsidiaries[10] Cautionary Note Regarding Forward-Looking Statements This section advises that the report contains forward-looking statements subject to risks that may cause actual results to differ materially - This report contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially from those discussed[12] - The Company undertakes no obligation to update or revise any forward-looking statements, except as required by law[12] PART I. FINANCIAL INFORMATION This part presents the Company's unaudited financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements This section presents electroCore's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, equity, and cash flows, with detailed notes for the periods ended June 30, 2023 and 2022 Condensed Consolidated Balance Sheets This section provides a snapshot of the Company's assets, liabilities, and equity as of June 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------------------- | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $8,442 | $17,712 | | Total current assets | $11,404 | $21,173 | | Total assets | $14,222 | $24,756 | | Liabilities and Equity | | | | Total current liabilities | $6,575 | $7,045 | | Total liabilities | $7,158 | $7,670 | | Total equity | $7,064 | $17,086 | | Total liabilities and equity | $14,222 | $24,756 | - Total assets decreased by approximately $10.5 million from December 31, 2022, to June 30, 2023, primarily driven by a significant reduction in cash and cash equivalents[16] - Total equity decreased by approximately $10 million, reflecting the net loss incurred during the period[16] Condensed Consolidated Statements of Operations This section details the Company's revenues, expenses, and net loss for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Operations (in thousands, except per share data) | (in thousands) | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $3,551 | $2,157 | $6,331 | $4,056 | | Gross profit | $2,966 | $1,799 | $5,288 | $3,338 | | Total operating expenses | $7,954 | $7,619 | $16,473 | $14,739 | | Loss from operations | $(4,988) | $(5,820) | $(11,185) | $(11,401) | | Net loss | $(4,903) | $(5,337) | $(10,770) | $(10,919) | | Net loss per share - Basic and Diluted | $(1.03) | $(1.20) | $(2.27) | $(2.25) | - Net sales increased significantly by 65% for the three months ended June 30, 2023, and 56% for the six months ended June 30, 2023, compared to the respective prior year periods[19] - Despite increased sales, the Company continued to incur net losses, though the net loss decreased slightly for both the three and six-month periods year-over-year[19] Condensed Consolidated Statements of Comprehensive Loss This section presents the Company's net loss and other comprehensive income/loss components for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Comprehensive Loss (in thousands) | (in thousands) | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(4,903) | $(5,337) | $(10,770) | $(10,919) | | Foreign currency translation adjustment | $(63) | $(58) | $(7) | $(85) | | Comprehensive loss | $(4,966) | $(5,395) | $(10,777) | $(11,004) | - The comprehensive loss for the three months ended June 30, 2023, was $4.966 million, a slight improvement from $5.395 million in the prior year, primarily due to a reduced net loss[22] Condensed Consolidated Statements of Equity This section outlines changes in the Company's equity, including common stock, additional paid-in capital, and accumulated deficit, for the period ended June 30, 2023 Condensed Consolidated Statements of Equity (in thousands) | (in thousands) | Balances as of January 1, 2023 | Balances as of June 30, 2023 | | :--------------- | :----------------------------- | :--------------------------- | | Common Stock | $5 | $5 | | Additional paid-in capital | $163,520 | $164,275 | | Accumulated deficit | $(146,370) | $(157,140) | | Total equity | $17,086 | $7,064 | - Total equity decreased from $17.086 million at January 1, 2023, to $7.064 million at June 30, 2023, primarily due to the net loss incurred during the period[24] - Share-based compensation contributed $755,000 to additional paid-in capital for the six months ended June 30, 2023[24][27] Condensed Consolidated Statements of Cash Flows This section details the Company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(9,172) | $(8,024) | | Net cash used in investing activities | $(91) | $0 | | Net cash provided by financing activities | $0 | $0 | | Net decrease in cash and cash equivalents and restricted cash | $(9,270) | $(8,109) | | Cash and cash equivalents and restricted cash – end of period | $8,692 | $26,580 | - Net cash used in operating activities increased to $9.172 million for the six months ended June 30, 2023, from $8.024 million in the prior year[30] - The Company's cash and cash equivalents and restricted cash significantly decreased from $26.580 million at June 30, 2022, to $8.692 million at June 30, 2023[30] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, risks, and specific financial accounts Note 1. The Company This note describes electroCore, Inc. as a commercial-stage bioelectronic medicine and wellness company focused on nVNS technology - electroCore, Inc. is a commercial-stage bioelectronic medicine and wellness company focused on non-invasive vagus nerve stimulation (nVNS) technology[32] - The Company commercializes medical devices for specific conditions and consumer products for general wellbeing in the U.S. and select overseas markets, with operations paused in Germany[32][33] Note 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and estimates used in preparing the financial statements, including the impact of a reverse stock split - The financial statements are prepared in conformity with U.S. GAAP and reflect a 1-for-15 reverse stock split effective February 15, 2023[34][35] - Significant estimates include allowances for doubtful accounts, inventory valuation, stock compensation, and contingencies[37] Cash, Cash Equivalents and Restricted Cash (in thousands) | (in thousands) | June 30, 2023 | June 30, 2022 | | :--------------- | :------------ | :------------ | | Cash and cash equivalents | $8,442 | $26,330 | | Restricted cash | $250 | $250 | | Total cash, cash equivalents and restricted cash | $8,692 | $26,580 | Note 3. Going Concern, Significant Risks and Uncertainties This note addresses the Company's going concern status, significant operational risks, and revenue concentration, particularly with the U.S. Department of Veteran Affairs - The Company has incurred significant net losses and cash used in operations since inception, raising substantial doubt about its ability to continue as a going concern within one year[42][45] - Sales to the U.S. Department of Veteran Affairs comprised 59.8% of revenue for the six months ended June 30, 2023, and the Federal Supply Schedule (FSS) contract, expiring January 15, 2024, is critical for future sales[43][46] Revenue Concentration by Channel (Percentage of Net Sales) | Revenue channel | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rx gammaCore - VA/DoD | 58.6% | 55.1% | 59.8% | 60.4% | | National Health Service | 9.8% | 16.4% | 9.9% | 15.3% | Note 4. Revenue This note provides a detailed breakdown of the Company's net sales by product channel and geographical region for the reported periods Product Net Sales (in thousands) | Channel | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rx gammaCore - Department of Veteran Affairs and Department of Defense | $2,081 | $1,190 | $3,786 | $2,430 | | Rx gammaCore - U.S. Commercial | $441 | $465 | $871 | $741 | | Outside the United States | $424 | $467 | $834 | $772 | | Truvaga | $290 | $0 | $437 | $0 | | TAC-STIM | $311 | $0 | $399 | $0 | | Other | $4 | $35 | $4 | $113 | | Total Net Sales | $3,551 | $2,157 | $6,331 | $4,056 | Geographical Net Sales (in thousands) | (in thousands) | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $3,127 | $1,690 | $5,497 | $3,284 | | United Kingdom | $384 | $355 | $705 | $621 | | Other | $22 | $64 | $65 | $103 | | License revenue Japan | $18 | $48 | $64 | $48 | | Total Net Sales | $3,551 | $2,157 | $6,331 | $4,056 | - New product offerings, Truvaga and TAC-STIM, contributed significantly to net sales in 2023, with no sales in the prior year periods[49] Note 5. Inventories This note details the composition of the Company's inventories, including raw materials, work in process, and finished goods, and changes in the obsolete inventory reserve Inventories (in thousands) | (in thousands) | June 30, 2023 | December 31, 2022 | | :--------------- | :------------ | :---------------- | | Raw materials | $1,334 | $944 | | Work in process | $2,194 | $2,879 | | Finished goods | $191 | $353 | | Total inventories, net | $3,719 | $4,176 | | Less: noncurrent inventories | $1,351 | $2,194 | | Current inventories | $2,368 | $1,982 | - The reserve for obsolete inventory decreased from $0.7 million at December 31, 2022, to $0.3 million at June 30, 2023[52] Note 6. Leases This note provides information on the Company's operating lease expenses, right-of-use assets, and lease liabilities, including weighted average terms and discount rates - Lease expense was $38,000 for the three months and $76,000 for the six months ended June 30, 2023[53] Operating Lease Liabilities (in thousands) | (in thousands) | June 30, 2023 | December 31, 2022 | | :--------------- | :------------ | :---------------- | | Operating lease right of use assets | $534 | $565 | | Total operating lease liabilities | $664 | $699 | | Weighted average remaining lease term (in years) | 5.6 | 6.1 | | Weighted average discount rate | 13.8% | 13.8% | Note 7. Accrued Expenses and Other Current Liabilities This note details the components of accrued expenses and other current liabilities, including professional fees, bonuses, litigation fees, and severance charges Accrued Expenses and Other Current Liabilities (in thousands) | (in thousands) | June 30, 2023 | December 31, 2022 | | :--------------- | :------------ | :---------------- | | Accrued professional fees | $483 | $524 | | Accrued bonuses and incentive compensation | $1,436 | $2,042 | | Accrued litigation legal fees expense | $1,035 | $1,001 | | Accrued severance and other related charges | $207 | $0 | | Total | $4,210 | $4,842 | - Total accrued expenses and other current liabilities decreased from $4.842 million at December 31, 2022, to $4.210 million at June 30, 2023[55] - All borrowings under the 2022 Commercial Insurance Premium Finance and Security Agreement were repaid as of June 30, 2023[56] Note 8. Shareholders' Equity This note describes changes in shareholders' equity, including a reverse stock split and the redemption of Series A Preferred Stock - A 1-for-15 reverse stock split became effective on February 15, 2023, to meet Nasdaq listing requirements[58] - All Series A Preferred Stock was redeemed and eliminated, with the designation removed from the Company's Certificate of Incorporation on March 6, 2023[62][63] Note 9. Net Loss Per Share This note presents the basic and diluted net loss per share and explains the exclusion of anti-dilutive securities from the diluted EPS calculation - Basic and diluted net loss per share for the six months ended June 30, 2023, was $(2.27), compared to $(2.25) for the same period in 2022[19] - Potentially dilutive securities (stock options, restricted stock, warrants) were excluded from diluted EPS calculation due to their anti-dilutive effect[64] Potential Common Stock Equivalents Excluded from Diluted EPS (in thousands) | (in thousands) | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--------------- | :----------------------------- | :----------------------------- | | Outstanding stock options | 335 | 418 | | Restricted stock and unit awards | 143 | 63 | | Stock purchase warrants | 1 | 11 | | Total | 479 | 492 | Note 10. Income Taxes This note reports on the Company's income tax-related activities, including a payment received from the sale of state net operating losses - The Company received a net cash payment of $211,000 on January 10, 2023, from the sale of its New Jersey state net operating losses[66] Note 11. Stock Based Compensation This note details stock option activity, stock compensation expense, and unrecognized compensation costs related to unvested awards Stock Option Activity (in thousands) | (in thousands) | Number of Options | Weighted Average Exercise Price | | :--------------- | :---------------- | :------------------------------ | | Outstanding, January 1, 2023 | 440 | $55.65 | | Cancelled | (108) | | | Outstanding, June 30, 2023 | 335 | $58.79 | | Exercisable, June 30, 2023 | 236 | $76.92 | Stock Compensation Expense (in thousands) | (in thousands) | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total expense | $183 | $752 | $755 | $1,529 | - Total unrecognized compensation cost related to unvested awards was $1.3 million as of June 30, 2023, to be recognized over the next 1.2 years[69] Note 12. Contingencies This note discusses the Company's involvement in stockholder class action lawsuits and derivative actions, and its defense strategy - The Company is involved in several stockholder class action lawsuits and derivative actions related to its IPO and subsequent disclosures[73][76][79][80] - The Superior Court of New Jersey dismissed the Kuehl and Stone actions, which was affirmed on appeal, and the federal Turnofsky case was dismissed with leave to re-plead[75][78] - The Company intends to vigorously defend itself but cannot determine the reasonable probability or range of potential loss, thus no accrual has been established[82] Note 13. Severance and other related charges This note reports on severance agreements with former employees and the associated outstanding payable as of June 30, 2023 - In Q1 2023, the Company entered into separation agreements with two former employees, totaling $332,000 in payments, with $207,000 remaining as an outstanding payable at June 30, 2023[84] Note 14. Subsequent Events This note discloses significant events occurring after the reporting period, including a registered direct offering and a new insurance premium finance agreement - On July 31, 2023, the Company completed a registered direct offering and concurrent private placements, raising approximately $7.5 million in net proceeds[85] - The proceeds are intended for sales and marketing, working capital, and general corporate purposes[85] - On July 5, 2023, the Company entered into a new Commercial Insurance Premium Finance and Security Agreement for approximately $618,000 at a 6.03% annual interest rate[86] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of electroCore's financial condition and results, covering business overview, product strategy, performance for the three and six months ended June 30, 2023, critical accounting policies, cash flows, and liquidity outlook Overview This section introduces electroCore as a bioelectronic medicine and wellness company, detailing its key products and ongoing operational challenges - electroCore is a commercial-stage bioelectronic medicine and wellness company utilizing non-invasive vagus nerve stimulation (nVNS) technology for medical devices and consumer products[90] - Key products include prescription gammaCore medical devices for headache conditions, Truvaga for general health, and TAC-STIM for human performance, developed with the U.S. Department of Defense[95][96][97] - The Company faces challenges in market acceptance, expanding indications, and developing its wellness business, and expects continued net losses and negative cash flows[103][104][105] Critical Accounting Policies and Estimates This section highlights the significant accounting policies and estimates that require management judgment and can impact reported financial amounts - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, with actual results potentially differing significantly[107] - Critical accounting policies and associated judgments are detailed in Note 2 of the condensed consolidated financial statements and the 2022 Annual Report[106][108] Results of Operations (Three Months Ended June 30, 2023 to the three months ended June 30, 2022) This section analyzes the Company's financial performance for the three months ended June 30, 2023, compared to the same period in the prior year Net Sales This subsection details the 65% increase in net sales for the three months ended June 30, 2023, driven by prescription and new nonprescription products - Net sales increased by 65% ($1.4 million) for the three months ended June 30, 2023, driven by growth in prescription gammaCore devices (VA/DoD, physician dispense) and new nonprescription products (TAC-STIM, Truvaga)[110] Product Net Sales (Three Months Ended June 30, in thousands) | Product | 2023 | 2022 | | :------------------------------------------------ | :----- | :----- | | Rx gammaCore - Department of Veteran Affairs and Department of Defense | $2,081 | $1,190 | | Rx gammaCore - U.S. Commercial | $441 | $465 | | Outside the United States | $424 | $467 | | Truvaga | $290 | $0 | | TAC-STIM | $311 | $0 | | Other | $4 | $35 | | Total | $3,551 | $2,157 | Gross Profit This subsection analyzes the $1.2 million increase in gross profit and the improvement in gross margin to 84% for Q2 2023 - Gross profit increased by $1.2 million, with gross margin at 84% for Q2 2023, up from 83% in Q2 2022[112] - The increase in gross margin is attributed to selling more longer-duration therapy and refill kits with lower costs, with no incremental effect from device licensing in the current quarter[112] Research and Development This subsection reports a $186,000 decrease in research and development expense due to cost-cutting, partially offset by platform investments - Research and development expense decreased by $186,000 to $1.2 million, due to compensation reductions from cost-cutting measures, partially offset by investments in future therapy delivery platforms[113] Selling, General and Administrative This subsection details an 8% ($521,000) increase in selling, general and administrative expense, driven by sales and marketing investments - Selling, general and administrative expense increased by $521,000 (8%) to $6.8 million, driven by targeted sales and marketing investments, partially offset by lower insurance and stock-based compensation[114] Other (Income) Expense This subsection attributes the increase in Other (Income) Expense primarily to rising interest rates on cash equivalents - The increase in Other (Income) Expense is primarily due to rising interest rates on cash equivalents[115] Benefit From Income Taxes This subsection explains the $445,000 benefit from income taxes in Q2 2022, resulting from the sale of state net operating losses and R&D tax credits - The $445,000 benefit from income taxes in Q2 2022 was from the sale of state net operating losses and R&D tax credits under New Jersey's NOL Transfer Program[116] Results of Operations (Six Months Ended June 30, 2023 to the six months ended June 30, 2022) This section analyzes the Company's financial performance for the six months ended June 30, 2023, compared to the same period in the prior year Net Sales This subsection details the 56% ($2.3 million) increase in net sales for the six months ended June 30, 2023, driven by growth across all major channels - Net sales increased by 56% ($2.3 million) for the six months ended June 30, 2023, driven by growth across all major channels, including prescription gammaCore (VA/DoD, U.S. commercial) and nonprescription TAC-STIM and Truvaga products[118] Channel Net Sales (Six Months Ended June 30, in thousands) | Product | 2023 | 2022 | | :------------------------------------------------ | :----- | :----- | | Rx gammaCore - Department of Veteran Affairs and Department of Defense | $3,786 | $2,430 | | Rx gammaCore - U.S. Commercial | $871 | $741 | | Outside the United States | $834 | $772 | | Truvaga | $437 | $0 | | TAC-STIM | $399 | $0 | | Other | $4 | $113 | | Total | $6,331 | $4,056 | Gross Profit This subsection analyzes the $2.0 million increase in gross profit and the rise in gross margin to 84% for the six months ended June 30, 2023 - Gross profit increased by $2.0 million, with gross margin rising to 84% for the six months ended June 30, 2023, from 82% in the prior year[120] - Improved gross margin is attributed to increased sales of longer-duration therapy and refill kits with lower costs, and the incremental effect of device licensing was 2.9% in 2023 vs. 7.9% in 2022[120] Research and Development This subsection reports a 30% ($689,000) increase in research and development expense, primarily due to investments in future therapy delivery platforms - Research and development expense increased by $689,000 (30%) to $2.964 million, primarily due to targeted investments in future therapy delivery platforms, partially offset by compensation reductions[121] Selling, General and Administrative This subsection details a $1.0 million increase in selling, general and administrative expense, driven by severance charges and sales and marketing investments - Selling, general and administrative expense increased by $1.0 million to $13.5 million, due to $332,000 in severance charges and continued sales and marketing investments, offset by decreases in insurance and stock-based compensation[122] Other (Income) Expense This subsection attributes the increase in Other (Income) Expense primarily to rising interest rates - The increase in Other (Income) Expense is primarily due to rising interest rates[123] Benefit from Income Taxes This subsection reports the $211,000 payment received from the sale of New Jersey state net operating losses on January 10, 2023 - The Company received a $211,000 payment from the sale of New Jersey state net operating losses on January 10, 2023[124] Cash Flows This section analyzes the Company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Operating Activities This subsection reports an increase in net cash used in operating activities to $9.2 million for the six months ended June 30, 2023 - Net cash used in operating activities increased to $9.2 million for the six months ended June 30, 2023, from $8.0 million in the prior year, primarily due to an increased net loss adjusted for non-cash expenses[126] Investing Activities This subsection details $91,000 in cash used for equipment purchases during the six months ended June 30, 2023 - Cash used in investing activities was $91,000 for equipment purchases during the six months ended June 30, 2023, compared to no investing activities in the prior year[127] Financing Activities This subsection reports no cash provided by financing activities for the six months ended June 30, 2023, or 2022 - No cash was provided by financing activities during the six months ended June 30, 2023, or 2022[128] Liquidity Outlook This section discusses the Company's expected negative cash flows, reliance on the FSS contract, and recent capital raise to fund operations - The Company expects substantial negative cash flows from operations and plans continued investments in sales, marketing, and therapy delivery platforms[129] - The Federal Supply Schedule (FSS) contract, a major revenue source, is scheduled to expire on January 15, 2024, with no assurance of renewal on favorable terms[130] - A registered direct offering and private placements on July 31, 2023, generated approximately $7.5 million in net proceeds, which are expected to fund operations for 12 months from the financial statement date, but significant risks and uncertainties remain[131][132] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the Company's exposure to market risks, primarily foreign currency exchange rate risk and interest rate risk - The Company is exposed to foreign currency exchange risk due to sales in British Pound Sterling and a license agreement in Japanese Yen, but does not hedge this risk[135][137] - A 10% increase or decrease in the U.S. dollar's strength would have an immaterial impact on net income for the three months ended June 30, 2023[136] - Interest rate risk on cash and cash equivalents is minimal due to their short-term nature, and the Company does not hedge interest rate exposure[137] Item 4. Controls and Procedures This section details the Company's disclosure controls and procedures, confirming their effectiveness and reporting no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This subsection confirms the effectiveness of the Company's disclosure controls and procedures as of June 30, 2023, following management's evaluation - As of June 30, 2023, the Company's disclosure controls and procedures were evaluated and deemed effective by the CEO and CFO[139][140] Changes in Internal Control over Financial Reporting This subsection states that no material changes in internal control over financial reporting occurred during the three months ended June 30, 2023 - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2023[141] PART II. OTHER INFORMATION This part includes additional information not covered in the financial statements, such as legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings This section incorporates by reference information on ongoing stockholder litigation and derivative actions from Note 12 of the financial statements - Information on legal proceedings is incorporated by reference from Note 12 of the condensed consolidated financial statements[144] Item 1A. Risk Factors This section states that previously disclosed risk factors remain current and could materially affect the Company's business, financial condition, and stock price - The risk factors from the 2022 Annual Report on Form 10-K and Q1 10-Q remain current and could materially affect the Company's business and financial condition[145] - These risk factors are not exhaustive, and past financial results are not a reliable indicator of future performance[145] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[146] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities to report during the period - No defaults upon senior securities occurred during the period[147] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the Company's operations - Mine safety disclosures are not applicable to the Company[148] Item 5. Other Information This section reports that no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements during the quarter - No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2023[149] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including various certifications and Inline XBRL documents - Exhibits include certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[151] Signatures This section contains the signatures of the Company's Chief Executive Officer and Chief Financial Officer, certifying the report's filing on August 9, 2023 - The report was signed by Daniel S. Goldberger, Chief Executive Officer, and Brian M. Posner, Chief Financial Officer, on August 9, 2023[153]