electroCore, Inc. (Nasdaq: ECOR), a commercial-stage bioelectronic
medicine company and wellness company, today announced second
quarter 2023 financial results and provided an operational update.
Second
Quarter 2023 and Recent
Highlights
- Record revenue of $3.6 million, an increase of approximately
65% over second quarter 2022
- TAC-STIM™ Non-Invasive Vagal Nerve Stimulation has been
selected for inclusion in the Air Force Research Laboratories
(AFRL) Real-Time Assessing and Augmenting Cognitive Performance in
Extreme Environments Project (A2PEX)
- Announced gammaCore™ Non-Invasive Vagal Nerve Stimulation has
been selected for a study funded by the National Football League
(NFL) and National Football League Players Association (NFLPA) on
Alleviating Concussion Symptoms
- Announced publication of a peer reviewed manuscript indicating
gammaCore™ Non-Invasive Vagal Nerve Stimulation improves attention
and memory in patients with posttraumatic stress disorder
(PTSD)
- Raised net proceeds of approximately $7.5 million in a
registered direct public offering and concurrent private placement
to institutional and accredited investors, and officers and
directors.
“We recorded record revenue of $3.6 million during the second
quarter of 2023, an increase of 65% over the second quarter of
2022,” stated Dan Goldberger, Chief Executive Officer of
electroCore. “This is our third consecutive quarter of significant
sequential growth fueled by our prescription gammaCore business as
well as our new products, Truvaga™, and TAC-STIM.”
Second Quarter 2023 Financial
Results
For the quarter ended June 30,
2023, electroCore reported net sales of $3.6 million
compared to $2.2 million during the same period of 2022,
which represents an approximately 65% increase over the prior
year. The increase of $1.4 million is due to an increase in net
sales across major U.S. channels including the sale of our
prescription gammaCore products in all channels, and revenue
from the sales of our nonprescription performance TAC-STIM
and Truvaga wellness products.
(in thousands) |
|
Threemonthsended June30, |
|
Threemonthsended June30, |
|
|
% Change |
|
|
SixmonthsendedJune 30, |
|
|
SixmonthsendedJune 30, |
|
|
% Change |
|
Channel |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
|
|
Rx gammaCore - Department of Veteran Affairs and Department of
Defense |
|
$ |
2,081 |
|
$ |
1,190 |
|
|
75 |
% |
|
|
$ |
3,786 |
|
$ |
2,430 |
|
|
56 |
% |
|
Rx gammaCore - U.S.
Commercial |
|
|
441 |
|
|
465 |
|
|
-5 |
% |
|
|
|
871 |
|
|
741 |
|
|
18 |
% |
|
Outside the United States |
|
|
424 |
|
|
467 |
|
|
-9 |
% |
|
|
|
834 |
|
|
772 |
|
|
8 |
% |
|
Truvaga |
|
|
290 |
|
|
— |
|
|
— |
|
|
|
|
437 |
|
|
— |
|
|
— |
|
|
TAC-STIM |
|
|
311 |
|
|
— |
|
|
— |
|
|
|
|
399 |
|
|
— |
|
|
— |
|
|
Other |
|
|
4 |
|
|
35 |
|
|
-89 |
% |
|
|
|
4 |
|
|
113 |
|
|
-96 |
% |
|
|
|
$ |
3,551 |
|
$ |
2,157 |
|
|
65 |
% |
|
|
$ |
6,331 |
|
$ |
4,056 |
|
|
56 |
% |
|
Gross profit for the second quarter of 2023 was $3.0 million as
compared to $1.8 million for the second quarter of 2022. Gross
margin for the second quarter of 2023 was 84% as compared to 83% in
the second quarter of 2022.
Total operating expenses in the second quarter of 2023 were
approximately $8.0 million as compared to $7.6 million in the
second quarter of 2022.
Research and development expense in the second quarter of 2023
was $1.2 million as compared to $1.3 million in the second quarter
of 2022. This decrease was due to cost cutting measures offset by
targeted investments to support future iterations of our therapy
delivery platform, including use of our intellectual property
around the delivery of smart phone-integrated and smart
phone-connected non-invasive therapies.
Selling, general and administrative expense in the second
quarter of 2023 was $6.8 million as compared to $6.3 million in the
second quarter of 2022.This increase was due to continued targeted
investments in sales and marketing to support our commercial
efforts, offset by decreases in insurance and stock-based
compensation expense.
GAAP net loss in the second quarter of 2023 was $4.9 million
compared to the $5.3 million net loss in the second quarter of
2022.
Adjusted EBITDA net loss in the second quarter of 2023 was $4.5
million as compared to a net loss of $4.9 million in the second
quarter of 2022.
The Company defines adjusted EBITDA net loss as GAAP net loss,
adjusted to exclude non-operating gains/losses, depreciation and
amortization, stock-based compensation expense, severance and other
related charges, inventory reserve charges, legal fees associated
with stockholders’ litigation, and benefit from income taxes. A
reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net
loss has been provided in the financial statement tables included
in the press release.
Net cash used in operating activities in the quarter ended June
30, 2023, was approximately $3.3 million as compared to $3.2
million in the second quarter of 2022. This increase is primarily
due to our investment in product evolution expenditures.
Cash, cash equivalents and restricted cash at June 30, 2023
totaled approximately $8.7 million, as compared to approximately
$18.0 million as of December 31, 2022. Subsequent to June 30, 2023,
the Company raised net proceeds of approximately $7.5 million
through a registered direct offering and concurrent private
placements priced “at the market” under Nasdaq rules. With
this recent capital raise, the Company had a pro forma cash balance
of $16.2 million as of June 30, 2023.
Full Year 2023 Outlook
The Company reiterates its revenue guidance of $14.0
million - $15.0 million for calendar year 2023.
The Company expects cash usage will continue to decrease in
coming quarters as revenues increase, the Company reduces R&D
expenses and continues to rationalize other operating expenses.
Therefore, the Company expects net cash usage to decrease
significantly through the year.
Webcast and Conference Call
Information
electroCore’s management team will host a
conference call today, August 9, 2023, beginning at 4:30 PM
EDT.
Investors interested in listening to the conference call, or
webcast may dial 877-407-8835 for domestic callers or
201-689-8779 for international callers, using Conference ID:
13739200, or by connecting to the Web:
electroCore Earnings Webcast. An archived webcast of the
event will be available on the “Investors” section of the company’s
website at: www.electrocore.com.
About electroCore, Inc.
electroCore, Inc. is a commercial stage
bioelectronic medicine and wellness company dedicated to improving
health through its non-invasive vagus nerve stimulation (“nVNS”)
technology platform. Our focus is the commercialization of medical
devices for the management and treatment of certain medical
conditions and consumer product offerings utilizing nVNS to promote
general wellbeing and human performance in the United States and
select overseas markets.
Forward-Looking Statements
This press release and other written and oral statements made by
representatives of electroCore may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements include, but
are not limited to, statements about expectations for revenue for
2023, cash resources through 2024 and beyond, electroCore’s
business prospects and clinical and product development plans; its
pipeline or potential markets for its technologies; the timing,
outcome and impact of regulatory, clinical and commercial
developments; business prospects around its Truvaga wellness and
TAC-STIM human performance offerings and other new products and
markets, and other statements that are not historical in nature,
particularly those that utilize terminology such as "anticipates,"
"will," "expects," "believes," "intends," and other words of
similar meaning, derivations of such words and the use of future
dates. Actual results could differ from those projected in any
forward-looking statements due to numerous factors. Such factors
include, among others, the ability to raise the additional funding
needed to continue to pursue electroCore’s business and product
development plans, the inherent uncertainties associated with
developing new products or technologies, the ability to
commercialize gammaCore™, TAC-STIM™, and Truvaga™, the potential
impact and effects of COVID-19 on the business of electroCore,
electroCore’s results of operations and financial performance,
inflation and currency fluctuations, and any expectations
electroCore may have with respect thereto, competition in the
industry in which electroCore operates and overall economic and
market conditions. Any forward-looking statements are made as of
the date of this press release, and electroCore assumes no
obligation to update the forward-looking statements or to update
the reasons why actual results could differ from those projected in
the forward-looking statements, except as required by law.
Investors should consult all of the information set forth herein
and should also refer to the risk factor disclosure set forth in
the reports and other documents electroCore files with the SEC
available at www.sec.gov.
Contact:
ECOR Investor Relations(973)
302-9253investors@electrocore.com
electroCore, Inc.Condensed Consolidated
Statements of Operations(unaudited)(in thousands, except
per share data) |
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net sales |
|
$ |
3,551 |
|
|
$ |
2,157 |
|
|
$ |
6,331 |
|
|
$ |
4,056 |
|
Cost of goods sold |
|
|
585 |
|
|
|
358 |
|
|
|
1,043 |
|
|
|
718 |
|
Gross profit |
|
|
2,966 |
|
|
|
1,799 |
|
|
|
5,288 |
|
|
|
3,338 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1,155 |
|
|
|
1,341 |
|
|
|
2,964 |
|
|
|
2,275 |
|
Selling, general and administrative |
|
|
6,799 |
|
|
|
6,278 |
|
|
|
13,509 |
|
|
|
12,464 |
|
Total operating expenses |
|
|
7,954 |
|
|
|
7,619 |
|
|
|
16,473 |
|
|
|
14,739 |
|
Loss from operations |
|
|
(4,988 |
) |
|
|
(5,820 |
) |
|
|
(11,185 |
) |
|
|
(11,401 |
) |
Other (income) expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income |
|
|
(85 |
) |
|
|
(38 |
) |
|
|
(204 |
) |
|
|
(42 |
) |
Other expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
Total other (income)
expense |
|
|
(85 |
) |
|
|
(38 |
) |
|
|
(204 |
) |
|
|
(37 |
) |
Loss before income taxes |
|
|
(4,903 |
) |
|
|
(5,782 |
) |
|
|
(10,981 |
) |
|
|
(11,364 |
) |
Benefit from income taxes |
|
|
— |
|
|
|
445 |
|
|
|
211 |
|
|
|
445 |
|
Net loss |
|
$ |
(4,903 |
) |
|
$ |
(5,337 |
) |
|
$ |
(10,770 |
) |
|
$ |
(10,919 |
) |
Net loss per share of common
stock - Basic and Diluted |
|
$ |
(1.03 |
) |
|
$ |
(1.20 |
) |
|
$ |
(2.27 |
) |
|
$ |
(2.25 |
) |
Weighted average common shares
outstanding - Basic and Diluted |
|
|
4,751 |
|
|
|
4,448 |
|
|
|
4,747 |
|
|
|
4,853 |
|
electroCore, Inc. Condensed
Consolidated Balance Sheet Information(unaudited)(in
thousands) |
|
|
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
Cash and cash equivalents |
|
$ |
8,442 |
|
|
$ |
17,712 |
|
Restricted cash |
|
$ |
250 |
|
|
$ |
250 |
|
Total assets |
|
$ |
14,222 |
|
|
$ |
24,756 |
|
Current liabilities |
|
$ |
6,575 |
|
|
$ |
7,045 |
|
Total liabilities |
|
$ |
7,158 |
|
|
$ |
7,670 |
|
Total equity |
|
$ |
7,064 |
|
|
$ |
17,086 |
|
(Unaudited) Use of Non-GAAP Financial
Measure
The Company is presenting adjusted EBITDA net loss because it
believes this measure is a useful indicator of its operating
performance. electroCore management uses this non-GAAP measure
principally as a measure of the company’s core operating
performance and believes that this measure is useful to investors
because it is frequently used by the financial community,
investors, and other interested parties to evaluate companies in
the company’s industry. The Company also believes that this measure
is useful to its management and investors as a measure of
comparative operating performance from period to period.
Additionally, the company believes its use of non-GAAP adjusted
EBITDA net loss from operations facilitates management’s internal
comparisons to historical operating results by factoring out
potential differences caused by gains and charges not related to
its regular, ongoing business, including, without limitation,
non-cash charges and certain large and unpredictable charges such
as restructuring expenses.
The Company defines adjusted EBITDA net loss as GAAP net loss,
adjusted to exclude non-operating gains/losses, depreciation and
amortization, stock-based compensation expense, severance and other
related charges, inventory reserve charges, legal fees
associated with stockholders’ litigation, and benefit from income
taxes.
Following is a reconciliation of GAAP net loss to non-GAAP
adjusted EBITDA net loss (in thousands):
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
GAAP net loss |
$ |
(4,903 |
) |
|
$ |
(5,337 |
) |
|
$ |
(10,770 |
) |
|
$ |
(10,919 |
) |
Depreciation and
amortization |
|
322 |
|
|
|
141 |
|
|
|
444 |
|
|
|
247 |
|
Stock-based compensation |
|
183 |
|
|
|
752 |
|
|
|
755 |
|
|
|
1,529 |
|
Inventory reserve charge |
|
(10 |
) |
|
|
— |
|
|
|
65 |
|
|
|
— |
|
Severance and other related
charges |
|
— |
|
|
|
— |
|
|
|
332 |
|
|
|
— |
|
Legal fees associated with
stockholders' litigation |
|
35 |
|
|
|
71 |
|
|
|
35 |
|
|
|
132 |
|
Interest and other (income) expense |
|
(85 |
) |
|
|
(38 |
) |
|
|
(204 |
) |
|
|
(37 |
) |
Benefit
from income taxes |
|
— |
|
|
|
(445 |
) |
|
|
(211 |
) |
|
|
(445 |
) |
Adjusted EBITDA net
loss |
$ |
(4,458 |
) |
|
$ |
(4,856 |
) |
|
$ |
(9,554 |
) |
|
$ |
(9,493 |
) |
The Company’s use of a non-GAAP measure has limitations as an
analytical tool, and you should not consider it in isolation or as
a substitute for analysis of its results as reported under GAAP.
Some of these limitations are: the non-GAAP measure does not
reflect interest or tax payments that may represent a reduction in
cash available; although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized may have to be
replaced in the future, and the non-GAAP measure does not reflect
cash capital expenditure requirements for such replacements or for
new capital expenditure requirements; the non-GAAP measure does not
reflect the potentially dilutive impact of equity-based
compensation; and the non-GAAP measure does not reflect changes in,
or cash requirements for, working capital needs; other companies,
including companies in electroCore’s industry, may calculate
adjusted EBITDA net loss differently, which reduces its usefulness
as a comparative measure.
Because of these and other limitations, you should consider the
non-GAAP measure together with other GAAP-based financial
performance measures, including various cash flow metrics, net
loss, and other GAAP results. A reconciliation of GAAP net loss to
non-GAAP adjusted EBITDA net loss has been provided in the
preceding financial statements table of this press
release.
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