ecor-20220630.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 June 30, 2022

☐

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 August 1, 2022 the registrant had 71,121,078 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 June 30, 2022 (unaudited) and December 31, 2021	4
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	6
	Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	Signatures	28

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, (i) risks and uncertainties related to the impact of the COVID-19 pandemic on general political and economic conditions, including as a result of efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, vaccine mandates, shelter in place orders and third-party business closures and resource allocations, manufacturing and supply chains and patient access to commercial products; our ability to execute our operational and budget plans in light of the COVID-19 pandemic, and (ii) those included in our Form 10-Qs, our Annual Report on Form 10-K for the year ended December 31, 2021, 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 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)

	June 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	26,330		$	34,689
Restricted cash		250			—
Accounts receivable, net		575			438
Inventories, net		1,739			1,361
Prepaid expenses and other current assets		230			1,053
Total current assets		29,124			37,541
Inventories, noncurrent		2,905			3,941
Property and equipment, net		99			147
Operating lease right of use assets, net		592			613
Other assets, net		761			591
Total assets	$	33,481		$	42,833
Liabilities and Equity
Current liabilities:
Accounts payable	$	2,053		$	938
Accrued expenses and other current liabilities		3,523			4,486
Current portion of operating lease liabilities		68			61
Total current liabilities		5,644			5,485
Noncurrent liabilities:
Operating lease liabilities, noncurrent		664			700
Total liabilities		6,308			6,185
Commitments and contingencies		—			—
Stockholders' equity:
Preferred Stock, par value $0.001 per share; 10,000,000 shares authorized at June 30, 2022 and December 31, 2021; 0 shares issued and outstanding at June 30, 2022 and December 31, 2021		—			—
Common Stock, par value $0.001 per share; 500,000,000 shares authorized at June 30, 2022 and December 31, 2021; 71,119,471 shares issued and outstanding at June 30, 2022 and 70,704,123 shares issued and outstanding at December 31, 2021		71			71
Additional paid-in capital		162,301			160,772
Accumulated deficit		(135,127	)		(124,208	)
Accumulated other comprehensive loss		(72	)		13
Total equity		27,173			36,648
Total liabilities and equity	$	33,481		$	42,833

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 June 30,						Six months ended June 30,
	2022			2021			2022			2021
Net sales	$	2,157		$	1,269		$	4,056		$	2,473
Cost of goods sold		358			374			718			738
Gross profit		1,799			895			3,338			1,735
Operating expenses
Research and development		1,341			825			2,275			1,324
Selling, general and administrative		6,278			5,272			12,464			10,997
Total operating expenses		7,619			6,097			14,739			12,321
Loss from operations		(5,820	)		(5,202	)		(11,401	)		(10,586	)
Other (income) expense
Gain on extinguishment of debt		—			(1,422	)		—			(1,422	)
Interest and other income		(38	)		(1)			(42	)		(1	)
Other expense		—			—			5			—
Total other (income) expense		(38	)		(1,423	)		(37	)		(1,423	)
Loss before income taxes		(5,782	)		(3,779	)		(11,364	)		(9,163	)
Benefit from income taxes		445			885			445			885
Net loss	$	(5,337	)	$	(2,894	)	$	(10,919	)	$	(8,278	)
Net loss per share of common stock - Basic and Diluted (see Note 8)	$	(0.08	)	$	(0.06	)	$	(0.15	)	$	(0.17	)
Weighted average common shares outstanding - Basic and Diluted (see Note 8)		70,816			48,520			70,744			48,089

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 June 30,						Six months ended June 30,
	2022			2021			2022			2021
Net loss	$	(5,337	)	$	(2,894	)	$	(10,919	)	$	(8,278	)
Other comprehensive (loss) income:
Foreign currency translation adjustment		(58	)		5			(85	)		147
Unrealized gain (loss) on securities, net of taxes as applicable		—			—			—			2
Other comprehensive (loss) income		(58	)		5			(85	)		149
Comprehensive loss	$	(5,395	)	$	(2,889	)	$	(11,004	)	$	(8,129	)

See accompanying notes to unaudited condensed consolidated financial statements.

ELECTROCORE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(unaudited)

(in thousands)

Common

Additional

Accumulated other

Stock

SEC Form 10-Q filed by electroCore Inc.