ecor-20230331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2023

☐

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 001-38538

electroCore, Inc.

(Exact name of Registrant as specified in its charter)

Delaware		20-3454976
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 Forge Way, Suite 205, Rockaway, NJ 07866

(Address of principal executive offices, including zip code)

(973) 290-0097

(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
Common Stock, par value $0.001 per share	ECOR	The Nasdaq Capital Market

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. Yes ☒ 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). Yes ☒ 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	☐
Non-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

As of April 27, 2023 the registrant had 4,749,221 shares of common stock outstanding.

	PART I. FINANCIAL INFORMATION	Page Number
	Cautionary Note Regarding Forward-Looking Statements	3
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	4
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	6
	Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
	Signatures	27

REFERENCES TO ELECTROCORE

In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to the “Company,” “electroCore,” “we,” “us” and “our” refer to electroCore, Inc. a Delaware corporation and its subsidiaries.

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 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,” “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, 2022, in our other filings with the U.S. Securities and Exchange Commission 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 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, 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.

ELECTROCORE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share data)

	March 31,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	11,908		$	17,712
Restricted cash		250			250
Accounts receivable, net		213			401
Inventories, net		2,478			1,982
Prepaid expenses and other current assets		525			828
Total current assets		15,374			21,173
Inventories, noncurrent		1,451			2,194
Property and equipment, net		34			50
Operating lease right of use assets, net		550			565
Other assets, net		891			774
Total assets	$	18,300		$	24,756
Liabilities and Equity
Current liabilities:
Accounts payable	$	2,001		$	2,129
Accrued expenses and other current liabilities		3,770			4,842
Current portion of operating lease liabilities		77			74
Total current liabilities		5,848			7,045
Noncurrent liabilities:
Operating lease liabilities, noncurrent		605			625
Total liabilities		6,453			7,670
Commitments and contingencies		—			—
Mezzanine Equity:
Preferred Stock, par value $0.001 per share; 10,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 0 shares issued and outstanding at March 31, 2023 and 71,173 issued and outstanding at December 31, 2022 ($0.001 per share liquidation value)		—			—
Stockholders' equity:
Common Stock, par value $0.001 per share; 500,000,000 shares authorized at March 31, 2023 and December 31, 2022; 4,745,781 shares issued and outstanding at March 31, 2023 and 4,744,886 shares issued and outstanding at December 31, 2022		5			5
Additional paid-in capital		164,092			163,520
Accumulated deficit		(152,237	)		(146,370	)
Accumulated other comprehensive (loss) income		(13	)		(69	)
Total equity		11,847			17,086
Total liabilities and equity	$	18,300		$	24,756

See accompanying notes to unaudited condensed consolidated financial statements.

ELECTROCORE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

	Three months ended March 31,
	2023			2022
Net sales	$	2,780		$	1,899
Cost of goods sold		458			360
Gross profit		2,322			1,539
Operating expenses
Research and development		1,809			934
Selling, general and administrative		6,710			6,186
Total operating expenses		8,519			7,120
Loss from operations		(6,197	)		(5,581	)
Other (income) expense
Interest and other income		(119	)		(4	)
Other expense		—			5
Total other (income) expense		(119	)		1
Loss before income taxes		(6,078	)		(5,582	)
Benefit from income taxes (see Note 10)		211			—
Net loss	$	(5,867	)	$	(5,582	)
Net loss per share of common stock - Basic and Diluted (see Note 9)	$	(1.24	)	$	(1.20	)
Weighted average common shares outstanding - Basic and Diluted (see Note 9)		4,743			4,652

See accompanying notes to unaudited condensed consolidated financial statements.

ELECTROCORE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)

(in thousands)

	Three months ended March 31,
	2023			2022
Net loss	$	(5,867	)	$	(5,582	)
Other comprehensive (loss) income:
Foreign currency translation adjustment		56			(27	)
Other comprehensive (loss) income		56			(27	)
Comprehensive loss	$	(5,811	)	$	(5,609	)

See accompanying notes to unaudited condensed consolidated financial statements.

ELECTROCORE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(unaudited)

(in thousands)

	Mezzanine Equity					Stockholders' Equity
						Common				Additional					Accumulated other
	Preferred Stock					Stock				paid-in		Accumulated			comprehensive			Total
	Shares			Amount		Shares		Amount		capital		deficit			income (loss)			equity
Balances as of January 1, 2023		71		$	—		4,745	$	5	$	163,520	$	(146,370	)	$	(69	)	$	17,086
Net loss		—			—		—		—		—		(5,867	)		—			(5,867	)
Other comprehensive income		—			—		—		—		—		—			56			56
Issuance of stock related to employee compensation plans, net of forfeitures		—			—		1		—		—		—			—			—
Preferred stock redemption		(71	)		—		—		—		—		—			—			—
Share based compensation		—			—		—		—		572		—			—			572
Balances as of March 31, 2023		—		$	—		4,746	$	5	$	164,092	$	(152,237	)	$	(13	)	$	11,847

Balances as of January 1, 2022		—		$	—		4,714	$	5	$	160,772	$	(124,208	)	$	13		$	36,582
Net loss		—			—		—		—		—		(5,582	)		—			(5,582	)
Other comprehensive income		—			—		—		—		—		—			(27	)		(27	)
Issuance of stock related to employee compensation plan, net of forfeitures		—			—		1		—		—		—			—			—
Share based compensation		—			—		—		—		777		—			—			777
Balances as of March 31, 2022		—		$	—		4,715	$	5	$	161,549	$	(129,790	)	$	(14	)	$	31,750

ELECTROCORE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Three months ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(5,867	)	$	(5,582	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		572			777
Depreciation and amortization		122			106
Net noncash lease expense		15			13
Inventory reserve charge		75			—
Changes in operating assets and liabilities:
Accounts receivable, net		188			75
Inventories		(51	)		399
Prepaid expenses and other current assets		303			252
Accounts payable		(128	)		692
Accrued expenses and other current liabilities		(1,072	)		(1,497	)
Operating lease liabilities		(17	)		(15	)
Net cash used in operating activities		(5,860	)		(4,780	)
Cash flows from investing activities:
Net cash provided by investing activities		—			—
Cash flows from financing activities:
Net cash provided by financing activities		—			—
Effect of changes in exchange rates on cash and cash equivalents		56			(27	)
Net decrease in cash and cash equivalents and restricted cash		(5,804	)		(4,807	)
Cash and cash equivalents and restricted cash – beginning of period		17,962			34,689
Cash and cash equivalents and restricted cash – end of period	$	12,158		$	29,882
Supplemental cash flows disclosures:

SEC Form 10-Q filed by electroCore Inc.