UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
Commission
File Number
(Exact name of Registrant as specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ NO ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large, accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). YES ☐ NO
The number of shares of Registrant’s Common Stock outstanding as of May 1, 2026 was .
PART I. FINANCIAL INFORMATION
| 1 |
REFERENCES TO ELECTROCORE
In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise indicates, references to “ECOR,” “electroCore,” “the Company,” “we,” “us,” “our” and similar references refer to electroCore, Inc., a Delaware corporation and its wholly owned subsidiaries, including NeuroMetrix, Inc., a Delaware corporation (“NeuroMetrix” or “NURO”).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this Quarterly Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “designed,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to them. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to risks and uncertainties included in our Form 10-Qs, our annual report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”), in our other filings with the U.S. Securities and Exchange Commission (the “SEC”) or in materials incorporated by reference therein, including the information in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in such filings. Furthermore, any such forward-looking statements in this Quarterly Report speak only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements.
The electroCore logo, gammaCore, Truvaga, TAC-STIM, NeuroMetrix, Quell, names, logos, and other trademarks of electroCore, Inc. appearing in this Quarterly Report are the property of electroCore, Inc. All other trademarks, service marks and trade names in this Quarterly Report are the property of their respective owners. We have omitted the ® and ™ designations, as applicable, for the trademarks used in this Quarterly Report.
| 2 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share data)
| March 31, | December 31 | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Marketable securities | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Other assets, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Current portion of debt | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Noncurrent liabilities: | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Long-term debt | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (see Note 15) | ||||||||
| Stockholders’ deficit: | ||||||||
| Common Stock, par value $ per share; shares authorized as of March 31, 2026 and December 31, 2025; shares issued and outstanding at March 31, 2026, and shares issued and outstanding at December 31, 2025 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) income | ( | ) | ||||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 3 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net sales | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Research and development | ||||||||
| Selling, general and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (income) expense: | ||||||||
| Interest and other income | ( | ) | ( | ) | ||||
| Interest expense | ||||||||
| Other expense | ||||||||
| Total other expense | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Benefit from income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share of common stock - Basic and Diluted | $ | ) | $ | ) | ||||
| Weighted average common shares outstanding - Basic and Diluted (see Note 11) | ||||||||
See accompanying notes to the condensed consolidated financial statements.
| 4 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)
(in thousands)
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive income: | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| Other comprehensive loss | ( | ) | ( | ) | ||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
See accompanying notes to condensed consolidated financial statements.
| 5 |
ELECTROCORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity (Deficit)
(unaudited)
(in thousands)
| Stockholders’ Equity | ||||||||||||||||||||||||
| Additional | Accumulated other | Total stockholders’ | ||||||||||||||||||||||
| Common Stock | paid-in | Accumulated | comprehensive | equity | ||||||||||||||||||||
| Shares | Amount | capital | deficit | income (loss) | (deficit) | |||||||||||||||||||
| Balances as of January 1, 2025 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Sale of common stock | ||||||||||||||||||||||||
| Equity issuance costs | — | ( | ) | ( | ) | |||||||||||||||||||
| Proceeds from the exercise of warrants | ||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||
| Balances as of March 31, 2025 | ( | ) | ||||||||||||||||||||||
| Balance as of January 1, 2026 | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Options exercised | ||||||||||||||||||||||||
| Proceeds from the exercise of warrants | ||||||||||||||||||||||||
| Shares issued for accrued bonus | ||||||||||||||||||||||||
| Issuance of common stock in connection with employee stock plans, net of forfeitures | ||||||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||||||
| Balances as of March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 6 |
ELECTROCORE,
INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right of use assets | ||||||||
| Amortization of debt discount | ||||||||
| Amortization of lease liability | ||||||||
| Inventory reserve charge | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expense and other current liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Sale of marketable securities | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from exercise of options | ||||||||
| Sale of common stock | ||||||||
| Equity issuance costs | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of changes in exchange rates on cash and cash equivalents | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents – beginning of year | ||||||||
| Cash and cash equivalents – end of period | $ | $ | ||||||
| Supplemental cash flows disclosures: | ||||||||
| Proceeds from sale of state net operating losses | $ | $ | ||||||
| Interest paid | ||||||||
| Supplemental schedule of noncash activity: | ||||||||
| Bonuses settled through the issuance of common stock | ||||||||
See accompanying notes to condensed consolidated financial statements.
| 7 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 1. The Company
electroCore, Inc. and its subsidiaries (“electroCore” or the “Company”) is a bioelectronic technology company whose mission is to improve health and quality of life through innovative non-invasive, bioelectronic technologies.
electroCore,
headquartered in Rockaway, NJ, has
Note 2. Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair presentation of the Company’s condensed consolidated financial position and results of operations for the interim periods presented. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 19, 2026. The results for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.
(b) Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of electroCore and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
(c) Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include revenue, licensed products and loss contingencies.
(d) Cash and Cash Equivalents
Cash
and cash equivalents of $
As of March 31, 2026, cash equivalents represented funds held in an interest-bearing demand deposit account, U.S. treasury bills, and a money market account.
(e) Marketable Securities
Marketable
securities are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income, except for
losses from impairments which are determined to be other than temporary. Realized gains and losses and declines in value judged to be
other-than-temporary are included in the determination of net loss and are included in interest and other income net. Fair values are
based on quoted market prices at the reporting date. Interest and dividends on available-for-sale securities are included in Interest
and other income. As of March 31, 2026, marketable securities amounted to $
| 8 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(f) Recent Accounting Pronouncements
In November 2024, the FASB issued Accounting Standards Update (ASU) No. 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses, which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the financial statements. The amendments in this pronouncement will be effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently assessing the potential impacts of adoption on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses, which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Topic 606, Revenue from Contracts with Customers. ASU 2025-05 is effective for annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods and should be applied prospectively, with early adoption permitted. The Company adopted this standard effective January 1, 2026 and have elected the practical expedient. This adoption did not materially affect the Company’s condensed consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which clarifies various topics in the Accounting Standards Codification to improve consistency and address technical corrections. Key improvements include clarifying the calculation of diluted earnings per share (EPS) when a loss from continuing operations exists. The amendments in this update are effective for the Company beginning January 1, 2027, with early adoption permitted. The Company is assessing the impact of adopting this standard.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements. This update clarifies the applicability of interim reporting guidance and the form and content of interim financial statements. It also establishes a disclosure principle requiring an entity to disclose material events and changes occurring since the end of the last annual reporting period. ASU 2025-11 is effective for the Company for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is assessing the impact of adopting this standard.
Note 3. Liquidity, Credit Risks and Going Concern
The
Company has experienced significant net losses, and it expects to continue to incur net losses for the near future as it works to increase
market acceptance of its prescription (Rx) devices and general wellness and human performance products. The Company has never been profitable
and has incurred net losses and negative cash used in operations each year since its inception. The Company incurred net losses of $
The
Company has historically funded its operations with the proceeds of equity and debt financings. During the three months ended March 31,
2026, the Company received net proceeds of approximately $
On
July 24, 2025, our Form S-3 registration statement (File No. 333-284477), or the 2025 Shelf Registration Statement, was declared effective
by the SEC. The 2025 Shelf Registration Statement relates to the potential offering and issuance from time to time of common stock, preferred
stock, warrants, rights, debt securities and units, up to an aggregate amount of $
| 9 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
On
November 29, 2024, we entered into an At The Market Offering Agreement (the “Sales Agreement”) with H.C. Wainwright &
Co., LLC (“Wainwright”), whereby the Company may offer and sell shares of its common stock from time to time having an aggregate
offering price of up to $
On
August 4, 2025 (the “LSA Closing Date”), we, and our wholly owned subsidiary, NURO, each as borrowers, entered into a Loan
and Security Agreement (the “Loan and Security Agreement”), with Avenue Opportunities Fund II, L.P. (“Avenue”).
The Loan and Security Agreement provided for term loans in an aggregate principal amount of up to $
During the remainder of 2026, we intend to continue to make targeted investments in sales and marketing to continue driving commercial activities. We have historically funded our operations from the sale of our common stock and debt financing, and may continue to do so through utilization of the at-the-market facility pursuant to the Sales Agreement, or other equity or debt transactions.
Notwithstanding the expected cash flow from operations and expected access to capital from existing and/or future debt and equity sources, the Company’s currently forecasted cash is less than the requirements to fund its operating expenses and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the accompanying condensed consolidated financial statements are issued. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. There remain significant risks and uncertainties regarding the Company’s business, financial condition and results of operations. Due to these risks and uncertainties, there can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and, ultimately, potentially cease operations. The accompanying condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Concentration of Revenue Risks
The
Company earns a significant amount of its revenue in the United States from the United States Department of Veterans Affairs, or VA,
channel pursuant to its qualifying contract under the Federal Supply Schedule, or FSS, and open market sales to individual VA facilities.
For the three months ended March 31, 2026 and 2025, the VA accounted for
For the three months ended March 31, 2026 and 2025, sales through our non-exclusive distribution agreement with Lovell Government Services, or Lovell, accounted for more than 10% of our VA net sales. As of March 31, 2026 and December 31, 2025, Lovell accounted for more than 10% of our accounts receivable. During the three months ended March 31, 2026 and 2025, sales associated with no single facility accounted for more than 10% of the total VA net sales. Lovell is a Service-Disabled Veteran-Owned Small Business (SDVOSB) offering medical and pharmaceutical goods and services to federal healthcare providers. During the three months ended March 31, 2026 and 2025, one facility accounted for more than 10% of net sales from the United Kingdom National Health Service (“NHS”).
Foreign Currency Exchange
The Company has foreign currency exchange risks related to revenue and operating expenses in currencies other than the local currencies in which it operates. The Company is exposed to currency risk from the potential changes in the functional currency values of its assets, liabilities, and cash flows denominated in foreign currencies.
| 10 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 4. Revenue
The following tables represent product net sales disaggregated by Channel and Geographic Market (in thousands):
| Three months ended March 31, | ||||||||
| Channel: | 2026 | 2025 | ||||||
| United States – Rx | $ | $ | ||||||
| General Wellness | ||||||||
| Outside the United States | ||||||||
| TAC-STIM | ||||||||
| In-License / Other | ||||||||
| Total Net Sales | $ | $ | ||||||
| Three months ended March 31, | ||||||||
| Geographic: | 2026 | 2025 | ||||||
| Product revenue | ||||||||
| United States | $ | $ | ||||||
| United Kingdom | ||||||||
| Other | ||||||||
| License revenue | ||||||||
| Japan | ||||||||
| Total Net Sales | $ | $ | ||||||
The Company generally invoices the customer and recognizes revenue once its performance obligations are satisfied, at which point payment is unconditional. Agreed upon payment terms with customers are within 30 days of shipment. Accordingly, contracts with customers do not include a significant financing component.
Note 5. Fair Value Measurements
Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy:
| ● | Level 1—Quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
| ● | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
As
of March 31, 2026 and December 31, 2025, the Company’s marketable securities in the amount of $
| 11 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 6. Inventory
As of March 31, 2026 and December 31, 2025, inventories consisted of the following:
| (in thousands) | March 31, | December 31, | ||||||
| 2026 | 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
The
reserve for obsolete inventory was $
Note 7. Leases
The
Company leases its headquarters location in Rockaway, New Jersey. For the three months ended March 31, 2026 and 2025, the Company recognized
lease expense of $
Supplemental Balance Sheet Information for Operating Leases:
| (in thousands) | March 31, | December 31, | ||||||
| 2026 | 2025 | |||||||
| Operating leases: | ||||||||
| Operating lease right of use assets | $ | $ | ||||||
| Operating lease liabilities: | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Noncurrent operating lease liabilities | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows | $ | $ | ||||||
| Weighted average remaining lease term (in years) | ||||||||
| Weighted average discount rate | % | % | ||||||
Future minimum lease payments under non-cancellable operating leases as of March 31, 2026:
| Financial year (in thousands) | ||||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 and thereafter | ||||
| Total future minimum lease payments | ||||
| Less: Amounts representing interest | ( | ) | ||
| Total | $ | |||
| 12 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 8. Accrued Expenses and Other Current Liabilities
Accrued expenses as of March 31, 2026 and December 31, 2025 consisted of the following:
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||
| Accrued professional fees | $ | $ | ||||||
| Accrued bonuses and incentive compensation | ||||||||
| Accrued litigation legal fees expense | ||||||||
| Accrued insurance expense | ||||||||
| Accrued research and development expenses | ||||||||
| Accrued vacation and other employee related expenses | ||||||||
| Accrued tax expenses | ||||||||
| Accrued purchases of inventory | ||||||||
| Deferred revenue | ||||||||
| Accrued acquisition related expenses | ||||||||
| Other | ||||||||
| $ | $ | |||||||
Finance and Security Agreements
On
July 7, 2025, the Company and First Insurance Funding entered into a Commercial Insurance Premium Finance Agreement (the “2025
Finance Agreement”). The 2025 Finance Agreement provides for a single borrowing of approximately $
During
the three months ended March 31, 2026 and 2025, the Company recognized $
Note 9. Long-Term Debt
As of March 31, 2026, long-term debt consists of notes payable and convertible notes payable as follows:
| Non-Convertible | Convertible | |||||||||||
| (in thousands) | Notes Payable | Notes Payable | Total | |||||||||
| Principal Borrowed | $ | $ | $ | |||||||||
| Final
Payment ( | ||||||||||||
| Total Principal | ||||||||||||
| Aggregate Debt Discount | ( | ) | ( | ) | ( | ) | ||||||
| Debt Discount Amortization | ||||||||||||
| Unamortized Debt Discount | ( | ) | ( | ) | ( | ) | ||||||
| Total Principal | ||||||||||||
| Unamortized Debt Discount | ( | ) | ( | ) | ( | ) | ||||||
| Long-Term Debt | ||||||||||||
| Less: Current Portion of Debt | ( | ) | ( | ) | ||||||||
| Long-Term Debt | $ | $ | $ | |||||||||
| 13 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Avenue Loan and Security Agreement
On
the LSA Closing Date, the Company and NURO entered into the Loan and Security Agreement with Avenue,
as administrative agent and collateral agent, and as lender for term loans in an aggregate principal
amount of up to $
Subject
to certain exceptions, Avenue has the right to convert (the “Conversion Right”) an aggregate amount of up to $
The
principal balance of the Term Loans bears interest at a variable rate per annum equal to the greater of (i) the sum of
The
Company may, at its option at any time, prepay the Term Loans in their entirety by paying the then outstanding principal balance and
all accrued and unpaid interest on the Term Loans, subject to a prepayment fee equal to
The
Company incurred borrower commitment and legal fees of $
The Loan and Security Agreement is collateralized by substantially all of the Company’s assets in which Avenue is granted a senior secured lien. The Company also grants Avenue a negative pledge on the Company’s intellectual property, subject to limited exceptions, pursuant to the Loan and Security Agreement. The Loan and Security Agreement contains customary representations, warranties and covenants, including covenants limiting certain additional indebtedness, liens (including a negative pledge on intellectual property and other assets, subject to limited exceptions), guaranties, substantial asset sales, investments and loans, certain corporate changes, transactions with affiliates and fundamental changes. The financial covenants include a minimum level of revenue and cash and cash equivalents. We were in compliance with these financial covenants as of March 31, 2026.
| 14 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
The Loan and Security Agreement provides for events of default customary for term loans of this type, including but not limited to non-payment, breaches or defaults in the performance of covenants, insolvency, bankruptcy and the occurrence of a material adverse effect on the Company. After the occurrence of an event of default, Avenue may (i) accelerate payment of all obligations, impose an increased rate of interest, and terminate Avenue commitments under the Loan and Security Agreement and (ii) exercise any other right or remedy provided by contract or applicable law.
Avenue
shall have the right, but not the obligation, to invest up to an aggregate of $
Avenue Subscription Agreement
In
connection with the entry into the Loan and Security Agreement, the Company entered into a Subscription Agreement (the “Subscription
Agreement”) between the Company and Avenue, pursuant to which the Company issued shares (the “Subscription Shares”)
of the Company’s common stock to Avenue for no additional consideration. The shares were valued at $
The issuance of the Subscription Shares was made in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D thereunder, because the offer and sale of such securities does not involve a “public offering” as defined in Section 4(a)(2) of the Securities Act.
Pursuant to the Subscription Agreement, the Company filed with the SEC a registration statement on Form S-3 (File No. 333-290713) to cover the resale of the Subscription Shares, and the shares of the Company’s common stock issuable upon the Conversion Right pursuant to the Loan and Security Agreement, which registration statement became effective on October 22, 2025.
The foregoing summary of the Loan and Security Agreement, the Supplement and the Subscription Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of Loan and Security Agreement and the Supplement, which are filed as Exhibits 10.1, 10.2 and 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025, and are incorporated by reference herein.
Maturities on long-term debt include:
| (in thousands) | Amount | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total | $ | |||
Note 10. Shareholders’ Equity
At-the-Market Facility
On
November 29, 2024, we entered into the Sales Agreement with Wainwright. Under the Sales Agreement, the Company may offer and sell shares
of its common stock from time to time having an aggregate offering price of up to $
Including purchases in 2025, the Company has sold shares of common stock for $
| 15 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Stock Purchase Warrants
The following table presents a summary of stock purchase warrants outstanding as of March 31, 2026:
| Number of Warrants (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
| Outstanding, January 1, 2026 | $ | $ | ||||||||||||||
| Stock Purchase Warrants * | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Expired | ||||||||||||||||
| Outstanding, March 31, 2026 | $ | $ | ||||||||||||||
| Exercisable, March 31, 2026 | $ | $ | ||||||||||||||
| * |
Subsequent
to March 31, 2026, the Company received net proceeds
of $
Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding adjusted to give effect to potentially dilutive securities. Due to their nominal exercise price of $ per share, pre-funded warrants are considered common stock equivalents during the three months ended March 31, 2026 and 2025, respectively, and are included in weighted average shares outstanding in the accompanying condensed consolidated statement of operations as of the closing date of the Company’s July 2023 Securities Purchase Agreements. Restricted stock and unit awards, stock options, and warrants (other than the pre-funded warrants) have not been included in the diluted loss per share calculation as their inclusion would have had an anti-dilutive effect.
| Three months ended March 31, | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Outstanding stock options | ||||||||
| Restricted stock and unit awards | ||||||||
| Debt conversion shares | ||||||||
| Stock purchase warrants | ||||||||
Note 12. Income Taxes
The
Company may be eligible, from time to time, to receive cash from the sale of its net operating losses under New Jersey’s Department
of the Treasury - Division of Taxation NOL Transfer Program. During the three months ended March 31, 2026 and 2025, the Company sold
New Jersey NOL carry forwards, resulting in the receipt of net cash payments of $
The Company grants stock based compensation to certain employees and board of directors under the Company’s 2018 Omnibus Equity Incentive Plan (“Plan”). As of March 31, 2026, approximately shares of common stock were reserved for issuance as awards under the Plan. The Company’s policy is to issue new shares of its common stock upon the exercise of stock options, new grants of restricted stock awards, and settlement of restricted stock units. Stock options issued under the plan have a contractual life of 10 years and are generally forfeited upon separation from the Company.
| 16 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
The following table presents stock compensation expense recognized by the Company for the three months ended March 31, 2026 and 2025. Total unrecognized compensation cost related to equity awards as of March 31, 2026 was $ million and is expected to be recognized over the next years.
| Three months ended March 31, | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Selling, general and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Cost of goods sold | ||||||||
| Total expense | $ | $ | ||||||
| Number of Options (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
| Outstanding, January 1, 2026 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Cancelled | ||||||||||||||||
| Expired | ||||||||||||||||
| Outstanding, March 31, 2026 | $ | $ | ||||||||||||||
| Exercisable, March 31, 2026 | $ | $ | ||||||||||||||
The intrinsic value is calculated as the difference between the fair market value at March 31, 2026 and the exercise price per share of the stock option. The options granted to employees generally vest over a three-year period.
| Exercise Price | Options Outstanding (in thousands) | Options Outstanding Weighted Average Remaining Contractual Life (Years) | Options Exercisable (in thousands) | |||||
| $ - $ | ||||||||
| $ - $ | ||||||||
| $ - $ | ||||||||
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | |||||||
| Nonvested, January 1, 2026 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Cancelled | ||||||||
| Nonvested, March 31, 2026 | $ | |||||||
In general, Units granted to employees vest over two to four-year periods.
| 17 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Immediately following the Company’s annual meeting of stockholders, the Company generally grants each non-employee director an equity award that vests over a -month period. Upon a non-employee director’s initial appointment or election to the board of directors, the Company grants such non-employee director an equity award subject to vesting over a -month period.
Valuation Information for Stock-Based Compensation
The Company did not grant any stock options during the three months ended March 31, 2026 or the year ended December 31, 2025.
Modification
As
of March 17, 2026, Daniel S. Goldberger, the Company’s former Chief Executive Officer, notified the Company of his intention
to retire as Chief Executive Officer effective April 1, 2026 (the “Separation Date”). Mr. Goldberger also resigned as a
member of the Company’s Board effective March 17, 2026. Pursuant to and subject to the terms and conditions of Mr.
Goldberger’s separation agreement effective as of March 17, 2026 (the “Goldberger Separation Agreement”),
of Mr. Goldberger’s outstanding restricted stock units were modified to either vest on April 1, 2026 or vest during a
twelve-month consulting period following April 1, 2026, which would otherwise have been forfeited. The service period required for
vesting during the consulting period is considered substantially less than the service period prior to retirement. As a result, the
Company recorded incremental stock compensation expense of $
Note 14. Segment Reporting
The
Company views its operations and manages its business as
The following table provides the GAAP operating financial results of the Bioelectronic Innovations segment:
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net sales* | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Research and development | ||||||||
| Variable sales and marketing | ||||||||
| Fixed sales and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ||
| * |
Note 15. Commitments and Contingencies
The Company may be a party to various legal proceedings and claims arising out of the ordinary course of its business. Although the final results of all such matters and claims cannot be predicted with certainty, the Company currently believes that there are no current proceedings or claims pending against it the ultimate resolution of which would have a material adverse effect on its financial condition or results of operations. However, should the Company fail to prevail in any legal matter, including the Pulsetto litigation referenced below, or should several legal matters be resolved against the Company in the same reporting period, such matters could have a material adverse effect on the Company’s operating results and cash flows for that particular period. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, “Contingencies.” Legal costs are expensed as incurred.
| 18 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Legal Proceedings
UAB Pulsetto v. electroCore, Inc.
On June 11, 2025, UAB Pulsetto (“Pulsetto”) filed a declaratory judgment action against the Company in the United States District Court for the District of New Jersey, captioned UAB Pulsetto v. electroCore, Inc., Civ. No. 25-10036 (D.N.J.), asserting that its non-invasive vagus nerve stimulation product does not infringe the Company’s U.S. Patent No. 11,446,491 (the “491 Patent”).
On July 16, 2025, the Company filed a responsive pleading, answering the complaint and asserting counterclaims, that Pulsetto’s non-invasive vagus nerve stimulation product infringes the ‘491 Patent, as well as the Company’s U.S. Patent Nos. 8,948,873, 9,339,653, 10,874,857, 8,843,210, 9,242,092, 11,623,078, and 10,441,780, as well as claims that Pulsetto’s commercial conduct has infringed and continues to infringe the Company’s Truvaga® and gammaCore® trademarks, and committed acts of false advertising and unfair competition in violation of state and federal law. On September 5, 2025, Pulsetto requested leave to file a motion to dismiss the Company’s counterclaims for lack or jurisdiction and/or insufficient pleadings. The Company has opposed that request, which has not yet been considered by the trial judge. On September 9, 2025, the court approved a schedule for discovery, and certain proceedings, filings, submissions, motions, reports and conferences. The parties have exchanged initial requests for the production of documents relevant to the dispute and have proceeded with exchanging their respective infringement and invalidity contentions, as the case may be. Pulsetto has also moved to compel the Company to provide certain discovery information related to potential infringement damages, and the Company has opposed that motion, which has not yet been considered by the trial judge. The parties are still in the early stages of discovery. The parties held an in-person settlement conference with a Magistrate Judge on March 4, 2026. The parties were ordered to engage in private mediation, all proceedings in the lawsuit have been stayed until June 5, 2026, and the two pending motions before the trial judge have been dismissed without prejudice (subject to being refiled at a later time), while the parties proceed with court ordered private mediation. A mediation is scheduled for May 20, 2026.
The Company believes that Pulsetto’s claim is without merit and intends to defend vigorously against it and to pursue vigorously the Company’s patent and non-patent counterclaims against Pulsetto. The Company expenses associated legal fees in the period they are incurred, and in light of, among other things, the preliminary stage of the litigation, the Company is unable to determine the reasonable probability of loss or a range of potential loss or gain or a range of potential gain. Accordingly, the Company has not established an accrual for potential losses or gains, if any, that could result from any unfavorable or favorable outcome, and there can be no assurance that these litigation matters will not result in substantial litigation costs and/or judgments or settlements that could adversely affect the Company’s financial condition.
Former CEO Retirement
Pursuant
to and subject to the terms and conditions of the Goldberger Separation Agreement, and in accordance with our Executive Severance Policy,
he will receive a cash severance payment of $
Purchase Commitments
The Company enters into contracts in the normal course of business with contract research organizations for its clinical trials, contract manufacturing organizations for the manufacture and supply of its clinical and commercial product needs and other vendors for other research and development and commercial activities, as well as services and products for operating purposes. The Company’s agreements generally provide for termination with notice. Such agreements that are cancelable contracts are not included as purchase commitments. The Company has included as purchase obligations its commitments under agreements to the extent they are quantifiable and are not cancelable. The Company has no material purchase obligations as of March 31, 2026.
| 19 |
ELECTROCORE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
CVR Agreement
In
conjunction with the NURO acquisition on May 1, 2025, the Company entered into a contingent value rights agreement (the “CVR Agreement”)
with the former shareholders of NURO which, among other things, entitles the former shareholders to
Other
On May 5, 2026, FDA personnel visited our facility in Rockaway, New Jersey, purportedly to inspect matters relating to the Company, including our wholly-owned subsidiary, NURO, through which we acquired the Quell product line in 2025. The visit was unannounced and characterized by the FDA as for cause, and while we believe our processes and procedures are robust and are in material compliance with the FDA’s requirements, we cannot predict the scope, duration, or outcome of this inspection, nor do we know what follow-up action, if any, the FDA will take, or which products may be at issue. As such there can be no assurance of the potential outcomes, some of which could adversely impact our business.
Note 16. Related Party Transactions
In
2023, an executive of the Company co-founded the Vagus Nerve Society, an academic society dedicated to the ongoing education and training
of scientists and clinicians and the power of the vagus nerve and its application in a broad spectrum of health-related conditions. During
the three months ended March 31, 2026 and 2025, the Company incurred aggregate expenses of $
Consulting Agreements
On
October 4, 2024, the Company and a former executive entered into a consulting agreement pursuant to which the former executive will provide
financial and accounting consulting services to the Company on an hourly basis for 12 months after the effective date of his retirement,
which was subsequently extended to a monthly basis upon mutual agreement. During the three months ended March 31, 2026, the Company’s
payments to the former executive were $
On
July 11, 2024, the Company and a member of its board of directors entered into a consulting agreement pursuant to which the board member
is expected to begin providing consulting and advisory services to the Company’s Chief Executive Officer for a one-year term as
of the completion of his service on the Board, effective as of immediately prior to the Company’s 2025 Annual Meeting of Stockholders.
The director will be paid an hourly or per diem fee for such services rendered, if any, and was granted a stock option to purchase
shares of common stock of the Company at an exercise price of $ per share, which vested and became exercisable on September 3, 2025.
The Company paid the former board member approximately $
See “Note 13 – Stock Based Compensation” and “Note 15 – Commitments and Contingencies” for information regarding the Goldberger Separation Agreement.
| 20 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report, including those set forth under Item 1A. “Risk Factors” and under “Forward-Looking Statements” in this Quarterly Report.
Overview
electroCore is a bioelectronic technology company whose mission is to improve health and quality of life through innovative, non-invasive, bioelectronic technologies. Our two leading commercial products are gammaCore non-invasive vagus nerve stimulation, or nVNS, and Quell Fibromyalgia, or Quell. We also sell our Truvaga and TAC-STIM products, which are handheld, personal-use consumer products, developed to promote general wellness and human performance.
We believe that our proprietary nVNS technology, which works through a variety of mechanistic pathways including the modulation of neurotransmitters, and Quell for chronic pain are designed to address many of the limitations of traditional non-invasive approaches.
Our business generates revenues from the sale of prescription medical devices and non-prescription wellness products in the United States and select overseas markets. We have two principal product categories:
| ● | Personal use prescription medical devices for the management and treatment of certain medical conditions such as primary headache and fibromyalgia; and |
| ● | Personal use consumer products that promote general wellness and human performance. |
Our goal is to be a leader in non-invasive bioelectronic technologies delivering better health. To achieve this, we offer multiple propositions:
| ● | Prescription medical devices for the treatment of certain FDA cleared medical conditions such as gammaCore for primary headache and Quell Fibromyalgia for fibromyalgia; |
| ● | Nonprescription Truvaga for the support of general health and wellbeing; and |
| ● | Non-prescription TAC-STIM for human performance. |
| ● | FDA cleared Quell OTC for lower extremity pain. |
Our two largest customers by revenue are the United States Department of Veterans Affairs and United States Department of Defense, or VA, and the United Kingdom National Health Service or NHS, both utilizing prescription products under qualifying agreements.
The United States Department of Veteran Affairs comprised 74.8% of our revenue during the three months ended March 31, 2026. The majority of our first quarter 2026 sales were made pursuant to our qualifying Federal Supply Schedule, or FSS, contract which has an expiry date of June 14, 2030, as well as open market sales to individual facilities within the government channels. Our prescription gammaCore and Quell Fibromyalgia devices are also made available to the government channel through our relationship with Lovell and its qualifying FSS, GSA Advantage (GSA), the VA Distribution and Pricing Agreement (DAPA), and Defense Logistics Agency’s ECAT system procurement portals through the Lovell contract vehicles (ECAT).
Demand for prescription devices in the U.S. is driven by clinical data and our increased presence in the field. Our sales efforts are primarily in the government channel broadly, and specifically to our largest customer, the VA, pursuant to our FSS contract and/or through our relationship with Lovell and its qualifying FSS, GSA, DAPA, and ECAT contracts. Our sales force is comprised of an internal sales team of territory business managers who manage outside commission only sales agents and sub reps. In addition, we have a small team of dedicated resources seeking to accelerate adoption in managed care systems.
| 21 |
Sales to the NHS in the United Kingdom made under the U.K. MedTech Funding Mandate, or MTFM, for cluster headache (CH) comprised 3.7% of our revenue during the three months ended March 31, 2026. We plan on continuing to use this program during the remainder of 2026, and potentially in years to come.
Demand for prescription devices outside the U.S. is driven by similar factors, including the strength of our clinical and health economic data. Our sales efforts are primarily focused on headache specialists, and specifically, for cluster headache patients.
We sell our general wellness products direct-to-consumer through our ecommerce site, www.truvaga.com, and through select Truvaga retail and marketplace partners, including Best Buy and Rehabmart. We also partner with organizations such as Ben Greenfield Life, Perks at Work, True Medicine and a growing number of affiliates and influencers who promote Truvaga and support awareness and customer acquisition through promotional partnerships.
We sell the TAC-STIM handset for human performance as a COtS solution to active-duty military and professional organizations. We are exploring strategies to make our TAC-STIM product available to other branches of the active-duty military, first responders, elite athletes and certain human performance professionals in the United States and abroad.
Truvaga and TAC-STIM are intended for general wellness in compliance with the FDA guidance document entitled “General Wellness: Policy for Low-Risk Devices; Guidance for Industry and FDA Staff, issued on September 27, 2019” and as updated in January 2026. Truvaga and TAC-STIM handsets are not intended to diagnose, treat, cure, or prevent any disease or medical condition.
Quell OTC is a wearable neuromodulation technology FDA cleared for Over the Counter (OTC) sales direct-to-consumer for chronic lower extremity pain. Quell OTC is no longer commercially available; however, replacement electrodes continue to be sold to existing Quell OTC customers. Although we may choose to relaunch the Quell OTC product in the direct-to-consumer business channel in the future, there can be no assurance that we will do so successfully, or at all.
We face a variety of challenges and risks that we will need to address and manage as we pursue our strategies, including our ability to develop and retain an effective sales force, achieve market acceptance of our medical devices among clinicians, patients, and third-party payers, expand the use of our bioelectronic technology to additional therapeutic indications, and to develop our nascent wellness and human performance business including the continued commercialization of Truvaga Plus, our app-enabled device under the Truvaga brand, and direct-to-consumer Quell OTC, a non-prescription product for lower extremity pain.
As we seek to execute on our strategic plans, we are also managing an executive leadership transition following recent changes to our senior management. We believe the transition provides an opportunity to strengthen operational execution, bring additional experience and perspectives to our commercial and product strategies, and enhance organizational focus as we pursue our near- and long-term objectives. However, leadership transitions can introduce operational and strategic challenges, and new leadership may implement shifts in priorities, management style, or organizational structure. These changes could result in temporary inefficiencies, delays in decision-making, or periods of misalignment across departments as roles and processes evolve. In addition, uncertainty during a transition may affect employee morale and retention, including among key personnel, and there is a risk that institutional knowledge is lost during the leadership change, which could impact our ability to manage ongoing projects, maintain customer relationships, and achieve our strategic objectives. We intend to remain focused on continuity of execution and disciplined prioritization as we navigate this transition, while continuing to evaluate the opportunities and challenges that may affect our business, results of operations, and financial condition.
Because of the numerous risks and uncertainties associated with our commercialization efforts, as well as research and product development activities, there may be uncertainty regarding our ability to achieve or maintain profitability. If we fail to become profitable or are unable to sustain profitability, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
Our expected cash requirements for the next 12 months and beyond are based on the commercial success of our products. There are significant risks and uncertainties as to our ability to achieve these operating results. Due to these risks and uncertainties, we may need to reduce our activities significantly more than our current operating plan and cash flow projections assume in order to fund operations for the next 12 months. There can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and, ultimately, potentially cease operations. See also “Liquidity Outlook.”
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Capital Activities
On July 24, 2025, our Form S-3 registration statement (File No. 333-284477), or the 2025 Shelf Registration Statement, was declared effective by the SEC. The 2025 Shelf Registration Statement relates to the potential offering and issuance from time to time of common stock, preferred stock, warrants, rights, debt securities and units, up to an aggregate amount of $100.0 million. The proposed maximum offering price per unit and the proposed maximum aggregate offering price per class of security in any future offering under the 2025 Shelf Registration Statement will be determined from time to time by us in connection with the issuance by us of the securities registered under the 2025 Shelf Registration Statement. As of May 1, 2026, we have $99.0 million remaining for potential issuance under the 2025 Shelf Registration Statement (including $18.8 million under the Sales Agreement (as defined below)). As of the date of this Quarterly Report, the aggregate market value of our securities held by non-affiliates is below $75.0 million, and until such time as the aggregate market value of our securities held by non-affiliates equals or exceeds $75.0 million, the aggregate maximum offering price of all securities deemed to be issued by us in any given 12-calendar month period pursuant to the 2025 Shelf Registration Statement may not exceed one-third of the aggregate market value of our securities held by non-affiliates, and thus may be limited. If we raise additional funds by issuing equity or debt securities, either through the sale of securities pursuant to a registration statement or by other means, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders.
On August 4, 2025 (the “LSA Closing Date”), we, and our wholly owned subsidiary, NURO, each as borrowers, entered into a Loan and Security Agreement (the “Loan and Security Agreement”), with Avenue Venture Opportunities Fund II, L.P. (“Avenue”), as administrative agent and collateral agent, and as lender, that is secured by a lien on substantially all of our assets, including a negative pledge on intellectual property, subject to limited exceptions, pursuant to the Loan and Security Agreement. The Loan and Security Agreement provides for term loans in an aggregate principal amount of up to $12.0 million (the “Loan Amount”) to be delivered in two tranches (the “Term Loans”). The tranches consist of (i) a term loan advanced to the Company on the LSA Closing Date in an aggregate principal amount of $7.5 million (“Tranche 1”), and (ii) subject to the achievement of certain performance milestones set forth in the Loan and Security Agreement, a right of the Company to request that Avenue make additional term loan advances to the Company in an aggregate principal amount of up to $4.5 million (“Tranche 2”), which right expired on December 31, 2025.
On November 29, 2024, we entered into the Sales Agreement with Wainwright. Under the Sales Agreement, the Company may offer and sell shares of its common stock, par value $0.001 per share, from time to time having an aggregate offering price of up to $20 million (the “ATM Shares”) during the term of the Sales Agreement through Wainwright, acting as sales agent. The Company has filed a prospectus supplement relating to the offer and sale of the Shares pursuant to the Sales Agreement. The ATM Shares were registered under the Company’s previously filed and effective Registration Statement on Form S-3 (File No. 333-262223) (the “2022 Shelf Registration Statement”), which was initially filed with the Securities and Exchange Commission (the “SEC”) on January 18, 2022 and declared effective on January 25, 2022. As of the date hereof, the 2022 Shelf Registration Statement has expired, and any sales of ATM Shares will be made pursuant to the 2025 Shelf Registration Statement. The Company intends to use the net proceeds from any offering pursuant to the Sales Agreement to continue to fund sales and marketing, working capital and for other general corporate purposes.
No sales were made pursuant to the Sales Agreement during the three months ended March 31, 2026. Subsequent to that date, the Company sold 150,357 shares of its common stock at a weighted average price of $6.62 per share, net of issuance costs, for approximately $0.96 million in net proceeds, pursuant to the Sales Agreement. As of May 1, 2026, the Company had approximately $18.8 million of ATM Shares remaining available for issuance under the Sales Agreement. Additionally, the Company received net proceeds of $44,000 from the exercise of 11,331 warrants subsequent to March 31, 2026.
| 23 |
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
Although there are items within our financial statements that require management to make accounting estimates, we do not believe them to be critical, as defined above.
Results of Operations
Comparison of the three months ended March 31, 2026 and 2025
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025 with the changes in those items in dollars.
| Three months ended March 31, | ||||||||||||
| (in thousands) | 2026 | 2025 | Change | |||||||||
| Net sales | $ | 9,584 | $ | 6,719 | $ | 2,865 | ||||||
| Cost of goods sold | 1,220 | 1,013 | 207 | |||||||||
| Gross profit | 8,364 | 5,706 | 2,658 | |||||||||
| Gross margin | 87 | % | 85 | % | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 740 | 642 | 98 | |||||||||
| Selling, general and administrative | 12,940 | 8,886 | 4,054 | |||||||||
| Total operating expenses | 13,680 | 9,528 | 4,152 | |||||||||
| Loss from operations | (5,316 | ) | (3,822 | ) | (1,494 | ) | ||||||
| Other (income) expense: | ||||||||||||
| Interest and other income | (52 | ) | (83 | ) | 31 | |||||||
| Interest expense | 318 | 5 | 313 | |||||||||
| Other expense | 10 | 159 | (149 | ) | ||||||||
| Total other expense | 276 | 81 | 195 | |||||||||
| Loss before income taxes | (5,592 | ) | (3,903 | ) | (1,689 | ) | ||||||
| Benefit from income taxes | 321 | 48 | 273 | |||||||||
| Net loss | $ | (5,271 | ) | $ | (3,855 | ) | $ | (1,416 | ) | |||
Net Sales
Net sales for the three months ended March 31, 2026 increased 43% to $9.6 million as compared to the three months ended March 31, 2025. The increase of $2.9 million is primarily due to an increase in net sales of prescription (Rx) gammaCore to the VA, sales of Quell Fibromyalgia products, which were acquired from NURO in May 2025 and are also sold to the VA, and revenue from the sales of our nonprescription general wellness Truvaga products. We expect that the majority of 2026 fiscal year revenue will continue to come from the U.S. Department of Veterans Affairs.
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The following table sets forth our net sales by channel:
| Three months ended March 31, | ||||||||
| Channel: | 2026 | 2025 | ||||||
| United States – Rx | $ | 7,421 | $ | 5,005 | ||||
| General Wellness | 1,588 | 1,106 | ||||||
| Outside the United States | 502 | 498 | ||||||
| TAC-STIM | 42 | 90 | ||||||
| In-License / Other | 31 | 20 | ||||||
| Total Net Sales | $ | 9,584 | $ | 6,719 | ||||
Gross Profit
Gross profit increased $2.7 million to $8.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in gross profit is attributable to the increased net sales and favorable product mix.
Research and Development
Research and development expense of $0.7 million for the three months ended March 31, 2026, increased by $98,000 compared to the prior year. This increase was primarily due to increased studies and grants.
Selling, General and Administrative
Selling, general and administrative expense of $12.9 million for the three months ended March 31, 2026 increased by $4.1 million compared to the previous year. Sales and marketing increased $1.8 million from the prior year. The increase in sales and marketing was primarily driven by $1.6 million of variable expenses, which contributed to a $2.9 million increase in sales. General and administrative expense increased $2.3 million from the prior year. This increase was primarily driven by $1.2 million of severance and $0.5 million of stock compensation expense associated with the former CEO’s retirement, $0.2 million in legal fees associated with the senior management changes, and $0.3 million in legal fees associated with ongoing litigation.
Other (Income) Expense
Other (income) expense of $0.3 million for the three months ended March 31, 2026 increased $0.2 million as compared to the three months ended March 31, 2025. The increase was primarily attributable to interest associated with the convertible term debt financing with Avenue. Other expense for the three months ended March 31, 2025 of approximately $0.1 million consisted primarily of non-recurring acquisition expenses.
Benefit from Income Taxes
The Company may be eligible, from time to time, to receive cash from the sale of our net operating losses under New Jersey’s Department of the Treasury - Division of Taxation NOL Transfer Program. During the three months ended March 31, 2026 and 2025, we received net cash payments of $321,000 and $48,000 from the sale of our New Jersey state net operating losses, respectively.
Liquidity and Capital Resources
At March 31, 2026, our cash, cash equivalents, and marketable securities was $8.8 million compared to $11.6 million at December 31, 2025.
| March 31, | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Net cash (used in) provided by | ||||||||
| Operating activities | $ | (3,008 | ) | $ | (4,355 | ) | ||
| Investing activities | $ | 597 | $ | 4,500 | ||||
| Financing activities | $ | 230 | $ | 180 | ||||
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Operating Activities
Net cash used in operating activities was $3.0 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively. The decrease of $1.4 million in operating cash used is primarily due to the timing of payment of accrued operating expenses partially offset by an increase in our net loss.
Investing Activities
Net cash provided by investing activities was $0.6 million and $4.5 million for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and March 31, 2025, cash used in investing activities was related to the proceeds from the sale of marketable securities.
Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2026 was $0.2 million which was primarily attributable to the exercise of stock warrants. During the three months ended March 31, 2025, net cash provided by financing activities was $0.2 million which was attributable to utilization of our at-the-market facility pursuant to the Sales Agreement.
Liquidity Outlook
We have experienced significant net losses, and we expect to continue to incur net losses for the near future as we work to increase market acceptance of our products. We have never been profitable and we have incurred net losses and negative cash used in operations in each year since our inception. We incurred net losses of $5.3 million and $3.9 million, and used cash in our operations of $3.0 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively.
The Company has historically funded its operations with the proceeds of equity and debt financings. During the three months ended March 31, 2026, the Company received net proceeds of approximately $0.2 million from the exercise of 42,055 warrants at a weighted average exercise price of $5.30. Subsequent to March 31, 2026, the Company received proceeds of approximately $44,000 from the exercise of warrants and approximately $0.96 million from the sale of shares under the Sales Agreement. As of March 31, 2026, the Company’s cash, cash equivalents and marketable securities totalled $8.8 million.
Principal repayments under the Loan and Security Agreement are scheduled for $2.5 million in 2027, $3.0 million in 2028 and $2.3 million in 2029 (inclusive of a final payment fee of 3.5% of the loan amount). See Note 10 – Long-Term Debt in the condensed consolidated financial statements for additional details of our current and long-term debt.
During the remainder of 2026, we intend to continue to make targeted investments in sales and marketing to continue driving commercial activities. We have historically funded our operations from the sale of our common stock and debt financing, and may continue to do so through utilization of the at-the-market facility pursuant to the Sales Agreement, or other equity or debt transactions.
Notwithstanding the expected cash flow from operations and expected access to capital from existing and/or future debt and equity sources, the Company’s currently forecasted cash is less than the requirements to fund its operating expenses and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the accompanying condensed consolidated financial statements are issued. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. There remain significant risks and uncertainties regarding the Company’s business, financial condition and results of operations. Due to these risks and uncertainties, there can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and, ultimately, potentially cease operations. The accompanying condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
See also “Capital Activities.”
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Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Impact of Recently Issued Accounting Standards
In the normal course of business, we evaluate all new accounting pronouncements issued by the FASB, SEC, or other authoritative accounting bodies to determine the potential impact they may have on our Condensed Consolidated Financial Statements. See Note 2 “Basis of Presentation” of the notes to our condensed consolidated financial statements in this Quarterly Report for additional information about these recently issued accounting standards and their potential impact on our financial condition or results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We develop our products in the United States and sell those products into several countries. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. Most of our sales in Europe are denominated in British Pound Sterling and our license agreement with Teijin is denominated in Japanese Yen. As our sales in currencies other than the U.S. dollar increase, our exposure to foreign currency fluctuations may increase. In addition, changes in exchange rates also may affect the end-user prices of our products compared to those of our foreign competitors, who may be selling their products based on local currency pricing. These factors may make our products less competitive in some countries.
If the U.S. dollar uniformly increased or decreased in strength by 15% relative to the foreign currencies in which our sales were denominated, our net income would have correspondingly increased or decreased by an immaterial amount for the three months ended March 31, 2026.
Our exposure to market interest rate risk is confined to our cash and cash equivalents and marketable securities. The goals of our investment policy are preservation of capital, fulfillment of liquidity needs and fiduciary control of cash and investments. We also seek to maximize income from our investments without assuming significant risk. To achieve our goals, we may maintain a portfolio of cash equivalents and investments in a variety of securities of high credit quality. The securities in our investment portfolio, if any, are not leveraged, are classified as available for sale and are, due to their very short-term nature, subject to minimal interest rate risk. We currently do not hedge interest rate exposure. Because of the short-term maturities of our cash equivalents, we do not believe that an increase in market rates would have any material negative impact on interest income recognized in our statement of operations. We have no investments denominated in foreign currencies and therefore our investments are not subject to foreign currency exchange risk. We contract with investigational sites, suppliers and other vendors in Europe and internationally. In addition, our license agreement requires payments to us to be denominated in Japanese Yen. We are subject to fluctuations in foreign currency rates in connection with these agreements. We do not hedge our foreign currency exchange rate risk.
All of the potential changes noted above are based on sensitivity analyses performed on our financial position as of March 31, 2026.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decision making regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.
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As required by Rule 13a-15(b) of the Exchange Act, an evaluation as of March 31, 2026 was conducted under the supervision and with the participation of our management, including our Interim President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, the Interim President and Chief Financial Officer concluded that our disclosure controls and procedures as of March 31, 2026 were not effective solely due to the material weakness described below.
In our Annual Report on Form 10-K for the year ended December 31, 2025, management identified a deficiency in its internal control over financial reporting related to the accuracy of its lease accounting. The Company previously recorded a lease modification in conjunction with the lease expansion of its Rockaway location in the second quarter of 2024. During the fourth quarter of 2025, the Company discovered an error in the lease payments used in the initial calculations in conjunction with the lease modification. While the error did not result in a material misstatement or a restatement of the Company’s consolidated financial statements, management concluded that there is a reasonable possibility that a material misstatement could have occurred without being prevented or detected on a timely basis, and therefore, the control deficiency was deemed to be a material weakness.
Management has initiated remediation measures designed to address the material weakness identified above. These measures include the implementation of an enhanced review control over the accounting for leases and any other significant non-routine transactions, including enhanced management review and approval procedures. In addition, the Company hired a new controller in September 2025 who management believes has the technical accounting skills and breadth of supervisory and review skills necessary to oversee the accounting function.
The material weakness will be considered remediated once the applicable controls have been fully implemented, have operated for a sufficient period of time, and have been tested for operating effectiveness which we believe will occur by the end of our second quarter of 2026.
Changes in Internal Control over Financial Reporting
Except for the changes described above, there was no change in our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the three months ended March 31, 2026 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
PART II— OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The information set forth in “Note 15. Commitments and Contingencies” of the condensed consolidated financial statements included in this Quarterly Report is incorporated here by reference to this Part II Item 1. For additional information regarding the risks associated with the regulation of our FDA-cleared medical devices, please refer to “Risks Related to Regulation of our Industry” in Item 1A of our Annual Report.
Item 1A. RISK FACTORS
You should carefully consider the risk factors included in Item 1A. of the Annual Report, in addition to the following risk factors, and the other information in this Quarterly Report, including the section of this Quarterly Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in the Annual Report, the following risk factors and the risks described elsewhere in this Quarterly Report occur, our business, operating results and financial condition could be seriously harmed. This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described in the Annual Report, below and elsewhere in this Quarterly Report.
We recently began selling Truvaga in the United Kingdom and consumers may be slow to adopt the product or its pricing which could adversely impact our business and financial results.
In January 2026, we began selling Truvaga 350 direct-to-consumer in the United Kingdom via a direct-to-consumer model. Early adoption rates in the United Kingdom and consumers’ willingness to pay our intended price points are uncertain. Although we intend to expand our direct-to-consumer sales of Truvaga outside the United States in 2026 and beyond, our ability to expand successfully will depend on the pace of consumer adoption at our anticipated price points in each market. We believe that brand awareness considerations are particularly significant in light of the highly competitive nature of the burgeoning markets for general wellness products and consumers’ acceptance of our pricing and perceived value relative to competing products. Promoting and positioning our Truvaga brand outside the United States will depend largely on the success of our marketing efforts, direct-to-consumer initiatives, and our ability to provide consumers with a reliable product.
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This will require investment and expansion of our sales and marketing capabilities, including potential investment in market-specific advertising, localized digital marketing, and consumer education initiatives. Given the established nature of our competitors, our relative lack of commercialization of general wellness products outside the United States, and our lack of experience in international direct-to-consumer channels, it is likely that our future marketing efforts will require us to incur significant additional expenses and we may need to reduce prices or offer discounts or incentives to drive adoption , which could pressure margins. These brand promotional activities may not yield increased sales and, even if they do, any sales increases may not offset the expenses we incur to promote Truvaga and any increase in unit volume may occur at lower average selling prices if consumers are unwilling to accept our current pricing, which could reduce revenue and gross margins. If we fail to successfully promote, expand, and maintain our Truvaga brand, Truvaga may not be accepted by consumers, which would adversely affect our business, results of operations, and financial condition.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
(a)
Resignation of Director
On May 5, 2026, Thomas M. Patton resigned as a member of the Company’s Board, and as chair of the Audit Committee, effective May 16, 2026.
In connection with Mr. Patton’s resignation, the size of the Board was decreased by resolution of the Board from seven to six members, effective on the effective date of Mr. Patton’s resignation.
Mr. Patton has confirmed that his resignation was not the result of any disagreement with the Company, the Board, or management regarding any matter relating to the Company’s operations, policies, or practices.
In connection with Mr. Patton’s resignation, the Compensation Committee and the Board approved the accelerated vesting of 6,337 deferred stock units previously granted to Mr. Patton, effective as of the date of his resignation.
The Board and the Company are deeply grateful for Mr. Patton’s service, dedication, and contributions to the Company.
Effective as of May 16, 2026, John P. Gandolfo, a member of the Board and the Audit Committee, was appointed as chair of the Audit Committee. As disclosed in the Annual Report, the Board has determined that Mr. Gandolfo is an “audit committee financial expert” as defined by SEC rules and regulations, and is independent under Nasdaq listing rules and under Rule 10A-3 of the Securities Exchange Act of 1934, as amended.
| (b) | Not applicable. |
| (c) | Trading Plans. |
During
the quarter ended March 31, 2026, no director or Section 16 officer
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Item 6. EXHIBITS
| Exhibit | ||
| Number | Description | |
| 31.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | Filed herewith. |
| ** | The certification attached as Exhibit 32.1 that accompanies this Quarterly Report is not deemed filed with the SEC and is not to be incorporated by reference into any filing of electroCore, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.
| electroCore, Inc. | ||
| Date: May 6, 2026 | By: | /s/ Joshua S. Lev |
| Joshua S. Lev | ||
| Interim President and Chief Financial Officer | ||
| (Principal Executive Officer and Principal Financial and Accounting Officer) | ||
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