Note 3. Liquidity, Significant Risks and Uncertainties

Liquidity

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 gammaCore therapy 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 $3.9 million and $3.5 million and used cash in its operations of $4.4 million and $2.6 million for the three months ended March 31, 2025 and 2024, respectively.

The Company has historically funded its operations from the sale of its securities. During the three months ended March 31, 2025, the Company received net proceeds of approximately $0.2 million from such sales and as of March 31, 2025, the Company’s cash, cash equivalents, restricted cash and marketable securities totaled $8.0 million (“Cash Position”).

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 $20 million by any method deemed to be an “at-the-market” offering as defined in Rule 415 of the Securities Act, or any other method specified in the Sales Agreement.

In 2025, 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 may continue to do so through utilization of the at-the-market facility or other equity or debt transactions if needed. As of May 2, 2025, the Company had approximately $19.8 million shares of common stock remaining available for issuance under the Sales Agreement.

The Company’s expected cash requirements for the next 12 months from the date these financial statements are issued and beyond are largely based on the commercial success of its products. Based on its current assessment, the Company believes its Cash Position, and expected cash flow from operations, will enable it to fund its operating expenses and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the accompanying financial statements are issued. There remain significant risks and uncertainties regarding the Company’s business, financial condition and results of operations. The Company’s future capital requirements are difficult to forecast and will depend on many factors that are out of its control. If the Company is unable to achieve its planned operating results or maintain sufficient financial resources, including through potential positive cash flow from operations or supplemental access to third-party debt, equity or hybrid capital, its business, financial condition and results of operations may be materially and adversely affected.

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 and United State Department of Defense, or VA, 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, 2025 and 2024, sales to the VA accounted for 70.3% and 71.2% of net sales, respectively.

For the three months ended March 31, 2025 and 2024, Lovell Government Services, or Lovell, accounted for more than 10% of our VA net sales. During the three months ended March 31, 2025, sales associated with no single facility accounted for more than 10% of the total VA net sales. One facility accounted for more than 10% of the total VA net sales during the three months ended March 31, 2024. During the three months ended March 31, 2025 and 2024, one facility accounted for more than 10% of net sales from the United Kingdom National Health Service (“NHS”).

ELECTROCORE, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

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.