Greetings, and welcome to the electroCore Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. It's now my pleasure to introduce to your host, Dan Goldberger, electroCore's Chief Executive Officer.

Thank you, all, for participating in today's electroCore earnings call. Joining me today is Joshua Lev, our Chief Financial Officer; and our Investor Relations firm, FNK IR. Earlier today, electroCore published results for the second quarter ended June 30, 2025. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during the call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including, without limitation, any guidance, outlook or future financial expectations or operational activities and performance are based upon the company's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list of the risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. ElectroCore disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information that is accurate only as of the live broadcast today, August 6, 2025. I want to take a moment and welcome James Theofilos to our Board of Directors as an Independent Director. Mr. Theofilos is a very accomplished young man and a successful executive at Microsoft, including prior roles in the Global Healthcare and Life Sciences business for…

Thank you, Dan. Net sales for the second quarter of 2025 were $7.4 million, an increase of 20% as compared to $6.1 million for the second quarter of 2024. The increase of $1.2 million is due to an increase in net sales across our prescription and general wellness products. Gross profit for the second quarter was $6.4 million as compared to $5.3 million for the second quarter last year. Gross margin was 87% compared to 86% for the second quarter last year. Total operating expenses in the second quarter were approximately $9.9 million compared to $7.9 million in the second quarter last year. Research and development expense in the second quarter was $511,000 as compared to $635,000 in the second quarter last year. This decrease was primarily due to reduced development costs. For the remainder of 2025, we expect our research and development expense to be higher than the comparable periods in 2024. Selling, general and administrative expense in the second quarter was $9.4 million as compared to $7.3 million in the second quarter of 2024. This increase was primarily due to the greater investment in selling and marketing costs consistent with our increase in sales, $548,000 of bad debt expense associated with the TAC-STIM receivable, increased expenses associated with professional fees and increased rent expense associated with the Rockaway lease expansion. For the remainder of 2025, we plan on continuing to make targeted investments in product, people, sales and marketing to support our commercial efforts. GAAP net loss was $3.7 million or a loss of $0.44 per share as compared to GAAP net loss of $2.7 million or a net loss of $0.38 per share in the second quarter of 2024. The increase in GAAP net loss is primarily attributable to an increase in selling, general and administrative expense,…

Thank you, Josh. I believe we have a tremendous amount of momentum moving into the second half of 2025. Revenue in the VA has returned to sequential growth and the integration of NeuroMetrix has been completed ahead of schedule. We're moving into third quarter of '25 with new bioelectronic products and technologies that we believe fit extremely well into our established channels and are increasing our efforts and investments to become a significant player in the health and wellness space. Although we expect profitability to be delayed as we increase spending on Truvaga, our new debt facility can provide us up to approximately $12 million of additional cash to execute on our plan. Demand for gammaCore in the VA channel continues to grow based on clinical performance and our increased presence in the field. Our VA business returned to growth in the second quarter and we're launching prescription Quell Fibromyalgia through our field sales organization. We rely on our field sales organization to drive revenue growth in the VA hospital and other prescription and B2B channels. We completed a restructuring of our field sales function earlier this year and we currently have approximately 80 straight commission sales agents including sub reps managed by 12 territory business managers who are salaried employees. Five of our 12 territory business managers are relatively new, so we expect the size of our 1,099 team to continue growing in the second half of 2025. Truvaga Plus has been favorably received by the market since its April 2024 launch. The brand continues to show tons of potential as a direct-to-consumer general wellness offering. We sell Truvaga products direct to consumer through our e-commerce site, www.truvaga.com. We've hired a new digital health executive, Kelly Benning, to manage our health and wellness commercial strategy and accelerate adoption of…

[Operator Instructions] Our first question will come from Jeff Cohen of Ladenburg.

So, just a few questions from our end. Firstly, Dan, could you provide any insight into Truvaga as far as composition of revenue with the 2 current SKUs that you have in the marketplace?

Yes, it's been an upside surprise to me, but our $500 Truvaga Plus mobile app enabled Truvaga Plus is accounting for about 80% of our revenue in the category, and the less expensive Truvaga 350 is lagging far behind.

Okay, that's nice to hear. So secondly, could you talk a little bit about have you actually pursued any legal activity as far as patent infringement? And if so, are you doing that through the U.S. Courts or some type of ICC court filings that we should expect to hear about?

So there's a -- there's some cross complaints have been filed in Federal Court in the District of New Jersey, and we're not going to comment beyond what's in those public filings.

Okay. Was there any cost associated during the second quarter or do we expect to see some of that in the third quarter or you'll let us know?

Yes, there was some legal expense that would have been incurred in the first and second quarter of this year.

And then lastly for us, you made some reference to new products in Q3. So should we be expecting new products in the marketplace? And if so, could you talk about it? Do you expect there to be DTC or B2B type of products?

So, I don't think I explicitly said new products. The Quell Fibromyalgia -- prescription Quell Fibromyalgia, the production line is now up and running in Rockaway. And in late June, we started to make samples and demos available to our sales force. So that is a product launch, but we've talked about the product historically. So I'm not sure if that rises to the level of a new product. But from a revenue point of view, it's going to start -- We think it'll start generating material revenue in the back half of this year.

[Operator Instructions] While we build the queue, I'll take a question that was submitted by [ Andrew Rem ] . How much are you increasing marketing spend on an annualized basis?

So we haven't been -- thank you for the question, Andrew, but we're not breaking out components of SG&A and total SG&A fluctuates quite a bit with timing, so I'm afraid I can't explicitly answer that question. I think you'll see our SG&A line go up 5% to 6%. Well, so -- sorry, I'm stumbling here a little bit. SG&A in our prescription businesses scales with revenue because there's a large commission component. And in our direct-to-consumer business, there's a component that scales with revenue around media and advertising spend. The blended average of all of that is about 30%. And so, if revenue goes up 20%, like it did this quarter, then that variable component of SG&A would go up 30% or 20%, so about 6%. Sorry to be so vague about it.

Our next question is coming from [ Charles Wallace ] of HCW.

This is Charles on for [ R.K. ]. I guess first from me, can you kind of comment on what ultimately led you guys to, on the decision to ramp up spending now and potentially delaying profitability? And then second question is, can you comment on the contribution of Amazon sales to the handsets in the quarter?

Yes, so we don't have much to say about Amazon just yet. We're still working out some issues with the plumbing and how orders get transferred from Amazon to our fulfillment. And as far as the timing goes, we've restructured our sales force on the prescription side. We're seeing very exciting green shoots in our direct-to-consumer business. We closed the acquisition of NeuroMetrix. We've been able to attract some really compelling talent, starting with James Theofilos and Kelly Benning, who both bring quite a bit of digital health direct-to-consumer know how. So for all those reasons, the time is now to put our foot on the gas pedal and drive more aggressive revenue growth. And there's plenty of leverage in the income statement with our 85%, 86% gross margins. So we're very confident that we're going to get to breakeven in a reasonable amount of time.

[Operator Instructions] Dan, it appears that has exhausted the questions. Can I turn the call back over to you?

Robert, I think there's a question in the chat box about NeuroMetrix products sold over the counter. Historically, certain versions of Quell were available direct-to-consumer under the -- over the counter label, including Amazon. Now that we have the production line up and running first, we want to take advantage of our prescription opportunity in the VA hospital system. And we'll be looking at how or when to relaunch Quell through our direct-to-consumer channels. And then I think there was another question about timing.

Yes. Let me read that out from the Q&A widget. How will this investment impact the time to profitability and what are your thoughts on 2026 and profitability?

So the -- we believe that the investments are going to accelerate revenue growth, right. We just announced 20% year-on-year revenue growth. We wouldn't be making these investments if we didn't think that, that sequential and year-on-year growth rate wouldn't increase. We need to get to $11.5 million of quarterly revenue from $7.5 million, that's 50% plus or minus revenue growth. And I'd love to see that happen sooner or rather than later.

One more question from the text bot. Can you talk about the return on advertising that you're seeing and how that has trended on the Truvaga side?

Yes, I think we said in the script that for the quarter just ended, our media efficiency ratio was 2.0. In other words, a dollar of advertising spend generated $2 of revenue. That's a little bit lower than previous periods. We've got a variety of initiatives and as I mentioned, some digital health executives joining the team where I think we're going to be able to return those KPIs to where they were late last year.

Okay, and what appears to be the final question. Can talk about Truvaga and Apple Health and how that effort's going and what the compatibility is there?

Oh, great question. Yes. So a few months ago we announced the integration of Truvaga into Apple Health. In and of itself, that's not a great deal -- great, big deal. But there are a tremendous number of third-party apps that offer diagnostic information, heart rate, breath rate, quality of sleep, and so, it gives us access to that much, much larger biohacker ecosystem through the API that lets us talk to Apple Health. So some folks in the biohacker community have been very active in coming up with use cases and I look forward to being able to make announcements about that later this year.

Well, thank you very much, Dan. That concludes the questions that were submitted. I now turn the call back over to you.

Great. Thank you everybody. Appreciate your time. So many people and counterparties have helped us get to this point. Special thanks to James Theofilos and his family office for their patience and support with us. Special thanks to the team at Avenue Capital for providing the liquidity that we've got access to and we look forward to great things going forward.

That concludes today's call. Thank you.