What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-03-08 compared with 2022-03-10 · 612 added, 432 removed, 1040 unchanged (50% of the section changed)

Risk Factors.

You should carefully consider the following risk factors, in addition to the other information in this report on Form 10-K, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes.

If any of the events described in the following risk factors and the risks described elsewhere in this report on Form 10-K occurs, our business, operating results and financial condition could be seriously harmed.

This report on Form 10-K also contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this report.

Risks Related to COVID-19

The coronavirus pandemic could have a significant negative impact on our business, revenues, financial condition and results of operations.

The persistence of the coronavirus pandemic has severely depressed the level of economic activity around the world.

Many businesses and governments have taken preventative or protective actions, including restrictions on travel and business operations, and advising or requiring individuals to limit or forego their time outside of their homes.

Temporary closures of many businesses have been ordered and numerous other businesses have temporarily closed voluntarily.

Further, individuals' ability to travel has been curtailed through mandated travel restrictions, voluntary or mandated closures of travel-related businesses, as well as quarantines, shelter-in-place/stay-at-home and social distancing orders.

This coronavirus pandemic has also impacted, and may continue to impact, our headquarters, manufacturing, and warehousing and distribution facilities, as well as those of our third-party vendors, including through the effects of facility closures, employee furloughs, reductions in operating hours, staggered shifts and other social distancing efforts, labor shortages, decreased productivity and unavailability of materials or components.

For example, we have limited access to our New Jersey office as a result of state-imposed restrictions.

Furthermore, the recent Biden administration's executive order requiring all on-site and remote federal employees, contractors and sub-contractors to be vaccinated against COVID-19 or receive an approved medical or religious exemption by December 8, 2021 may apply to us because of our Federal Supply Schedule Medical Equipment and Supply contract.

Failure to comply with the executive order could lead to loss of the contract, which could have a material adverse effect on our business, revenues, financial condition and result of operations.

In light of the executive order, we implemented a mandatory COVID-19 vaccination policy for all employees.

There are, however, ongoing challenges in the federal courts regarding the validity of the executive order, which could lead to future changes to our own policies depending on the outcome of those cases.

All of our U.S.

employees have to provide proof of vaccination sub ject to medical and religious exemptions.

To the extent an employee qualifies for a medical or religious exemption, we will collaborate with the exempt employee to explore reasonable accommodation options that may permit the employee to perform the essential functions of their job without being vaccinated.

We will be unable to accommodate an employee's exemption request if such accommodation would prevent an employee from performing the essential functions of their job, or would result in undue hardship, which includes, but not limited to, a risk of harm to others.

There can be no assurance that this policy or any future policies whether adopted in order to comply with applicable rules and regulations or otherwise will not have an adverse effect on our recruitment and retention of, and relations with our employees.

The coronavirus pandemic may also impact our ability to sell our product, ship our product on a timely basis and may increase our costs.

The spread of coronavirus has also caused us to modify our business practices (including social distancing practices, requiring non-essential production related team members to work remotely where possible, restricting business travel, cancelling certain events, and limiting visitor access to our facilities), and we may take further actions as may be required by government authorities or that we determine are necessary or advisable.

Work-from-home and other measures introduce additional operational risks, including cybersecurity risks, and have affected the way we conduct our business, which could have an adverse effect on our operations.

There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and illness and workforce disruptions could lead to unavailability of key personnel and harm our ability to perform critical functions.

In addition, work-from-home and related business practice modifications present significant challenges to maintaining our corporate culture, including employee engagement and productivity, both during the immediate pandemic crisis and as we make additional adjustments in the eventual transition from it.

Implementing new business practices in order to protect employees, vendors and other parties with whom we interact may result in increased costs.

Furthermore, even if we follow what we believe to be best practices, there can be no assurance that our measures will prevent the transmission of COVID-19 between employees.

Any incidents of actual or perceived transmission may expose us to liability claims, adversely impact employee productivity and morale, and result in negative publicity and reputational harm.

Additionally, our sales and marketing efforts are, and may from time to time be, adversely affected by protocols for screening and restricting outside visitors and vendors that have been adopted by the Department of Veterans Affairs, commercial prescribers and other third parties.

Officially imposed quarantines and self-quarantines could also interfere with patients’ ability to see a health care provider and obtain our gammaCore therapy.

The degree to which coronavirus impacts our results will continue to depend on future developments that are highly uncertain and cannot be predicted, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development, rollout and availability of effective treatments and vaccines, the imposition of protective public safety measures, vaccine mandates, the transmissibility and effects of new coronavirus variants such as those experienced with respect to the Omicron variant beginning in early December 2021, and how quickly and to what extent normal economic and operating conditions can resume, if at all.

These uncertainties may result in delays or modifications to our plans, initiatives and results.

For the reasons set forth above and other reasons that may come to light due to the coronavirus outbreak and any associated protective or preventative measures, we are unable to reasonably estimate coronavirus’ impact to our business, revenues, financial condition and results of operations.

We are similarly unable to predict the degree to which the pandemic impacts our customers, suppliers, vendors, capital markets, and other partners, and their financial conditions, but a material effect on these parties could also adversely affect us.

The impact of coronavirus could also exacerbate other risks discussed below, which could in turn have a material adverse effect on us.

Developments related to coronavirus have been rapidly changing, and additional impacts and risks may arise that we are not aware of or able to appropriately respond to currently.

More generally, in the future, our business, financial results, and financial condition may be negatively impacted by the effects of other disease outbreaks, epidemics, pandemics, or similar widespread public health concerns.

Risk Related to our Financial Position, Operating Results and Need for Additional Capital

We recently launched new cash pay initiatives, including our gConcierge and gCDirect programs, and patients and providers may be slow to adopt these programs or their pricing which could adversely impact our business and financial results.

We currently have a small cash-pay business channel, which includes the recently launched e-commerce websites for our gConcierge and gCDirect programs, and intend to expand our direct-to-consumer business channel by increasing our advertising and promotional activities in 2022.

This will require significant investment and expansion of our sales and marketing capabilities and further development by us and third parties of telehealth features relating to this business channel.

You should carefully consider the following risk factors, in addition to the other information in this Annual Report, including the section of this Annual Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes.

If any of the events described in the following risk factors and the risks described elsewhere in this Annual Report occur, our business, operating results, and financial condition could be seriously harmed.

This Annual Report also contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Annual Report.

Risk Related to our Financial Position, Oper ating Results and N eed for Additional Capital

We recently launched new cash pay initiatives, including our gConcierge and g CDirect programs, as well as our direct-to-consumer business channel and patients and providers or consumers may be slow to adopt these programs or their pricing which could adversely impact our business and financial results.

We currently have a cash-pay business channel for our gConcierge and gCDirect programs, and intend to expand our direct-to-consumer business channel through the recently launched ecommerce websites by increasing our advertising and promotional activities in 2023.

This will require significant investment and expansion of our sales and marketing capabilities and further development by us relating to this business channel.

We have limited experience with scaling and commercializing a direct-to-consumer cash-pay business channel in the United States and abroad, which may impact our ability to rely on this channel as a positive source of revenue.

If we are unsuccessful in executing our commercialization efforts in this business channel and do not achieve the sales levels that we expect, we will be unable to recover these investments.

Additionally, there is a risk that potentially lower pricing of our therapy in the direct-to-consumer cash-pay business channel could lead to lower pricing and reimbursement in our legacy business channels and, therefore, have an adverse impact on our financial position and results of operations, and heighten our need to obtain additional capital to support our business.

If third-party payers do not provide adequate coverage and reimbursement for the use of gammaCore, it may affect our ability to generate significant revenues.

If we are unsuccessful in executing our commercialization efforts in our direct-to consumer business channel and do not achieve the sales levels that we reasonably anticipate to materialize in light of current planning and forecasting, we will be unable to recover the investments described above.

Additionally, there is a risk that potentially lower pricing of our therapy in the direct-to-consumer cash-pay business channel could lead to lower pricing and reimbursement in our legacy business channels and, therefore, this risk could have an adverse impact on our financial position and results of operations as well as heighten our need to obtain additional financial capital to support our business projects.

If third-party payors do not provide adequate coverage and reimbursement for the use of gammaCore, it may affect our ability to generate significant revenues.

Some of our success in marketing and commercializing gammaCore depends, and will continue to depend, on whether U.S.

and international government health administrative authorities, private health insurers and other payer organizations provide adequate coverage and reimbursement for the cost of our products.

Many third-party payers do not currently cover VNS for any indications other than epilepsy because they have determined all other VNS modalities to be investigational or experimental.

and international government health administrative authorities, private health insurers, and other payor organizations provide adequate coverage and reimbursement for the cost of our products.

Many third-party payors do not currently cover nVNS for any indications other than epilepsy because they have determined all other nVNS modalities to be investigational or experimental.

If physicians or insurers do not find our clinical data compelling or wish to wait for additional studies, they may choose not to use or provide coverage and reimbursement for gammaCore.

We cannot provide assurance that data we or others may generate in the future will be consistent with that observed in our existing clinical studies, or that our current or future published clinical evidence will be sufficient to obtain adequate coverage and reimbursement for our products.

Moreover, if we cannot obtain adequate coverage for and reimbursement of the cost of our products, we cannot provide assurance that patients will be willing to incur the full cost of our gammaCore therapy.

In the United States, we expect to derive nearly all of our sales from prescriptions of gammaCore written by physicians.

Access to adequate coverage and reimbursement by third-party payers for our gammaCore therapy or the willingness of patients to bear the entire cost of our therapy is essential in the acceptance of our products by physician, patients and other customers for our therapy.

Third-party payers, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.

In addition, in the United States, no uniform policy of coverage and reimbursement for our gammaCore therapy exists among third-party payers.

Therefore, coverage and reimbursement for our gammaCore therapy can differ significantly from payer to payer.

In addition, payers continually review new technologies for possible coverage and can, without notice, deny coverage for these new products and procedures.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our gammaCore therapy to each payer separately, with no assurance that coverage and adequate reimbursement will be obtained or maintained if obtained.

We cannot provide assurance that data we or others may generate in the future will be consistent with data observed in our existing clinical studies, and we cannot provide similar assurance that our current or future published clinical evidence will be sufficient to obtain adequate coverage and reimbursement for gammaCore.

Moreover, if we cannot obtain adequate coverage for and reimbursement of the cost of gammaCore, we cannot provide assurance that patients will be willing to incur the full cost of our gammaCore therapy.

Access to adequate coverage and reimbursement by third-party payors for our gammaCore therapy or the willingness of patients to bear the entire cost of our therapy is essential in the acceptance of our gammaCore by physicians, patients, and other customers for our therapy.

Third-party payors, whether foreign or domestic, or governmental or commerci al, are developing increasingly sophisticated methods of controlling healthcare costs.

In addition, in the United States, no uniform policy of coverage and reimbursement for our gammaCore therapy exists among third-party payors.

Therefore, coverage and reimbursement for our gammaCore therapy can differ significantly from payor to payor.

In addition, payors continually review new technologies for possible coverage and can, without notice, deny coverage for these new products and procedures.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our gammaCore therapy to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained or maintained if obtained.

Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis.

1 unchanged sentence

Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures.

In most markets, there are private insurance systems as healthcare systems that control reimbursement for new devices and procedures.

In most markets, there are private insurance systems as well as government-managed systems.

If sufficient and timely coverage and reimbursement is not available for our current or future products or if reimbursement rates change, in either the United States or internationally, the demand for our product and our revenues will be adversely affected.

We have a limited history commercializing our gammaCore therapy through direct-to-consumer channels and commercial success is uncertain.

As a small company with a limited history of selling our gammaCore therapy and which has primarily focused on physician adoption and commercial payer and government sales channel to date, we have limited experience engaging in direct-to-consumer commercial activities and limited established relationships with marketing agencies, analytic platforms, and social media following, all of which is becoming increasingly important to direct-to-consumer initiatives.

We may be unable to gain broader market acceptance in direct-to-consumer channels of gammaCore therapy in the United States or abroad for a number of reasons, including:

In most markets, there are private insurance systems and government-managed systems.

If sufficient and timely coverage and reimbursement are not available for our current or future gammaCore products, or if reimbursement rates change, in either the United States or internationally, the demand for our gammaCore product and our revenues would be adversely affected.

We have a limited history commercializing our VNS platform technology, including through direct-to-consumer channels, and commercial success is uncertain.

Moreover, we have limited experience engaging in direct-to-consumer commercial activities and limited established relationships with marketing agencies, analytic platforms, and social media following, all of which are becoming increasingly important to direct-to-consumer initiatives.

We may be unable to gain broader market acceptance for our nVNS platform technology in our sales channels and markets, including direct-to-consumer channels in the United States or abroad, for a number of reasons, including:

established competitors with strong relationships with customers, including ecommerce and telehealth platforms, systems, marketing agencies and a critical mass of existing patients;

limitations in our ability to demonstrate differentiation and advantages of our product compared to competing products and the relative safety, efficacy and ease of use of our product;

limitations in our ability to demonstrate differentiation and advantages of our product compared to our own products and competing products and the relative safety, efficacy and ease of use of our product;

the limited size of our marketing team and the learning curve required to gain experience selling our product direct-to-consumer;

• limited brand awareness

• insufficient financial or other resources to support our commercialization efforts necessary to reach profitability;

the introduction and market acceptance of new, more effective or less expensive competing products and technologies.

Any significant disruption to our e-commerce business could result in lost sales.

We recently launched new cash pay initiatives for our gammaCore therapy, including our e-commerce websites in both the United States and United Kingdom.

the introduction and market acceptance of new, more effective or less expensive competing products and technologies in relevant geographic and product markets.

We have a limited history commercializing our wellness and human performance products in the United States for which market acceptance and commercial success are uncertain.

As a small company with a limited history of selling our wellness and human performance products, we have limited experience engaging in commercial activities and limited established relationships and experience with direct-to-consumer channels and third-party suppliers on whom we depend for the manufacture of our product components.

In addition, as a general matter, we may fail to adapt our existing or future technology to patient and customer requirements or emerging treatment standards in our relevant geographic and product markets.

New industry standards for the development, manufacture, and marketing of medical devices and general wellness products may evolve in separate ways, and we may not be able to conform to the changes, meet new standards in a timely fashion, or maintain a competitive position in our target marketplace.

Moreover, if we face material delays in introducing our products and new technology, we may fail to attract new customers in part due to diminished brand awareness and ineffective implementation of marketing and promotion strategy.

Specifically, we may be unable to successfully commercialize our wellness and human performance products in the United States for a number of reasons, including:

established competitors with relatively more mature relationships with their customers and third-party suppliers;

limitations in our ability to demonstrate differentiation and advantages of our product compared to similar, competing products and the relative safety, efficacy and ease of use of our product;

the limited brand awareness of our Truvaga and TAC-STIM brands, which are our two recently launched non-prescription, wellness and human performance products;

the limited size of our marketing budget to assess and increase customer demand levels;

the inability to obtain sufficient supply of the product components for our wellness products from our primary and secondary manufacturers and suppliers;

insufficient financial or other resources to support our commercialization efforts necessary to realize profitability;

the introduction, and market acceptance, of new, relatively more effective, or less expensive, competing products and technologies.

We recently launched our Truvaga and TAC-STIM branded products for wellness and human performance.

Commercialization of these products may be very expensive, time consuming and may not generate favorable financial results.

We recently launched our business for wellness and human performance for our Truvaga and TAC-STIM branded products.

We have limited experience in this area and our initiatives may require significant investment to develop our sales and marketing capabilities for this business channel.

If we are unsuccessful in executing our commercialization efforts in this business channel and do not achieve the sales levels that we expect at all or within the time frames we have forecast, we may need to obtain additional financing on terms that may be dilutive or disadvantageous and we may be unable to recover these investments.

We have limited operating experience at our current scale of operations.

If we are unable to manage our growth effectively, our brand, company culture, and financial performance may suffer.

Implementation of our growth strategy for our gammaCore and human performance and wellness products may require greater overall planned capital expenditures, and we cannot guarantee that any such increased expenditures will bring forth corresponding, offsetting revenue growth.

Because we have a relatively limited history operating our business at its current and evolving scale, it is difficult for us to evaluate our present and future business prospects, including our ability to plan for, and model, future growth scenarios.

Our limited operating experience at this scale, combined with the rapidly evolving customer demand and other market structure properties of the health and wellness geographic and product markets in which we operate and other economic factors beyond our control, reduces our ability to accurately forecast quarterly or annual revenue.

In particular, our ability to accurately forecast customer demand could be affected by myriad factors, including, without limitation, changes in customer demand levels for our products, changes in demand levels for the products of our competitors, the relative pace of acceptance of personalized health and wellness recommendations, unanticipated weakening of various macroeconomic conditions, and capricious shifts in consumer confidence in future macroeconomic stability and/or the public capital markets.

Failure to manage our future growth plans effectively could have an adverse effect on our financial condition and operating results.

Any significant disruption to our ecommerce business could result in lost sales.

In early 2022, we launched new cash pay initiatives for our gammaCore therapy, including our ecommerce websites in both the United States and United Kingdom.

Online sales are subject to a number of risks.

System interruptions or delays could cause potential patients to fail to purchase our products and could harm our brand.

The operation of our direct-to-consumer ecommerce business depends on our ability to maintain the efficient and uninterrupted operation of online prescription generation, order-taking and fulfillment operations.

System interruptions or delays could cause potential patients to fail to purchase our products, harming our brands.

Operating our direct-to-consumer ecommerce business depends on our ability to maintain the efficient and uninterrupted administration of online prescription generation, order-taking, and fulfillment activities.

Our ecommerce operations subject us to certain risks that could have an adverse effect on our operating results, including risks related to the computer systems that operate our website and related support systems, such as system failures, viruses, denial of service attacks, computer hackers, data privacy breaches, and other disruptions.

If we are unable to continually add software and hardware, effectively upgrade our systems and network infrastructure and take other steps to improve the efficiency of our systems, system interruptions or delays could occur that would adversely affect our operating results.

If we are unable to continually add software and hardware, effectively upgrade our systems and network infrastructure, and take other steps to improve the efficiency and efficacy of our systems, system interruptions or delays could occur that would adversely affect our operating results.

We utilize third-party vendors for our customer-facing ecommerce technology, portions of our prescription generation, order management system, and fulfillment internationally.

4 unchanged sentences

Therefore, operating costs may rise faster than associated revenues resulting in a material negative impact on our cash flow and margins.

We are also impacted by inflationary increases in wages and benefits whether driven by competition for talent or ordinary course pay increases, as well as other rising costs.

We are also impacted by inflationary pressures in wages in local and regional labor markets;

structural labor market benefits, whether driven by competition for talent or ordinary course pay increases, and other rising costs.

Increases in the rate of inflation could also significantly impact our cost base.

In all countries in which we operate, wage inflation, whether driven by competition for talent or ordinary course pay increases, may also increase the cost of our cost products and reduce our profitability if we are not able to pass those costs on to our patients and consumers or charge premium prices when justified by market demand.

In all countries in which we operate, wage inflation, whether driven by competition for talent or ordinary course pay increases, may also increase the cost of our cost products and adversely impact our results of operations and financial condition if we are not able to pass those costs on to our patients and consumers or charge premium prices when justified by actual or perceived market demand.

Moreover, some of our existing or future customers may consider our products and services to be discretionary by nature.

Factors affecting the aggregate level of spending for such customers possibly include current macroeconomic conditions, including inflation, consumer confidence in future macroeconomic conditions, fears of recession, the availability and cost of customer credit, rates of employment, and tax rates, which are factors that would adversely impact demand for our products.

We have a history of significant losses.

If we do not achieve and sustain profitability and positive cash flow from operations, our financial condition could suffer.

Our failure to become and remain profitable could negatively impact the results of our operations and your investment.

We have experienced significant net losses, and we expect to continue to incur losses for the foreseeable future as we operate our sales and marketing infrastructure, increase market acceptance of our gammaCore therapy, fund our research and development activities, and obtain regulatory clearance or approval for other products or indications in the United States and internationally.

Our failure to become and remain profitable could negatively impact the results of our operations as well as your investment.

We have experienced significant net losses, and we expect to continue to incur losses for the foreseeable future while we operate our sales and marketing infrastructure, endeavor to increase acceptance of our gammaCore therapy and launch our human performance and wellness product line in relevant markets, fund our various research and development activities, and obtain regulatory clearance or approval for other products or indications in the United States and internationally.

We have never been profitable and have incurred net losses in each year since our inception.

2 unchanged sentences

O ur prior losses, combined with expected future losses, have had, and will continue to have for the foreseeable future, an adverse effect on our stockholders’ deficit and working capital.

To become and remain profitable, we must successfully commercialize our gammaCore therapy and continue to identify promising new areas of treatment with significant market potential.

This will require us to be successful in a range of challenging activities, which may include obtaining adequate coverage and reimbursement from payers, marketing and selling any current and future product candidates for which we may obtain marketing clearance, approval or authorization, developing commercial scale manufacturing processes, completing future clinical trials of gammaCore for additional therapeutic indications, obtaining additional marketing clearance, approval or authorization from regulatory authorities, manufacturing, satisfying any post-marketing requirements, and developing the marketing and promotional expertise necessary to succeed in a direct-to-consumer approach.

We face a variety of challenges and risks that we will need to address and manage as we pursue our strategy, including our ability to achieve adequate payer coverage, develop and retain effective sales force and marketing personnel, achieve market acceptance of gammaCore among physicians, patients and third-party payers, and expand the use of gammaCore to additional therapeutic indications.

Because of the numerous risks and uncertainties associated with our commercialization efforts, as well as research and clinical development activities, we are unable to predict the timing or amount of increased expenses, or when, if ever, we will be able to achieve or maintain profitability.

We expect to continue to incur substantial net losses and negative cash flows from operations as we commercialize gammaCore.

To become and remain profitable, we must successfully commercialize our nVNS platform technology and identify promising areas of adoption with significant potential in terms of marketability, brand awareness, and product distinguishability, among other business considerations.

This will require us to be successful in a range of challenging activities, which may include obtaining adequate coverage and reimbursement from payors;

marketing and selling any current and future product candidates for which we may obtain appropriate marketing clearance, approval or authorization;

developing commercial-scale manufacturing processes;

managing various risks associated with the design, manufacture, marketing, and sale of human performance, wellness product offerings, including compliance risk stemming from inadequate monitoring and analysis of applicable FDA and other relevant guidance as well as applicable consumer protection laws, rules, and regulations, ineffective initial and periodic assessment of claims and intended uses of such offerings, and inadequate government affairs, regulatory change management, or other corporate compliance functions that typically identify and remediate nonconformance with administrative law requirements, whether U.S.

federal, state, or otherwise, and execute regulatory compliance processes more broadly;

completing future clinical trials of gammaCore for additional therapeutic indications;

obtaining additional marketing clearance, approval, or authorization from applicable regulatory authorities;

militating against risk in, and enhancing the measures of cost efficiency in, our manufacturing;

satisfying any post-marketing requirements;

and developing the marketing and promotional expertise necessary to succeed in an integrative, well-funded direct-to-consumer approach through the sale of our wellness and human performance product offerings.

Because of the numerous risks and uncertainties associated with our commercialization efforts as well as our research and clinical development activities, we are unable to predict the timing or amount of increased expenses, or when, if ever, we will be able to achieve or maintain profitability.

We expect to continue to incur substantial net losses and negative cash flows from operations as we commercialize our nVNS platform technology.

We intend to continue to make targeted investments in building our U.S.

and UK commercial infrastructure.

We expect to continue to incur substantial net losses and negative cash flows from operations as we commercialize gammaCore.

Even if we are able to increase sales of gammaCore, increase adoption of gammaCore therapy among physicians, payers, patients, and consumers and achieve desired payer coverage and reimbursement levels and increased consumer demand, we may not achieve profitability and even if we do, we may not be able to sustain or increase profitability in subsequent periods.

If we fail to become profitable or are unable to sustain profitability, then we may be unable to continue our operations at planned levels and be forced to further reduce or terminate our operations.

If we fail to become profitable or are unable to sustain profitability, then, we may be unable to continue our operations at planned levels and may be forced to further reduce, or ultimately terminate, our operations.

As of December 31, 2022, we had cash and cash equivalents and marketable securities of $ 18.0 million.

There can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and ultimately, potentially cease operations.

Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development, and marketing efforts, expand our business or continue our operations.

A decline in the value of our company also could cause you to lose all or part of your investment.

Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development and marketing efforts, and expand our business or continue our operations.

Accordingly, a decline in the market value of our company could cause you to lose all or part of your investment.

Our plans to expand our direct-to-consumer cash-pay business channel may not be able to generate significant revenues.

We currently have a small direct-to-consumer cash-pay business channel, which we are planning to expand in 2023 and beyond.

This will require significant investment in and expansion of our sales and marketing capabilities and use of third-party telehealth providers or development of our own telehealth platform.

If we are unsuccessful in executing our commercialization efforts in this business channel and do not achieve the sales levels that we expect, we may be unable to recover these investments.

Additionally, there is a risk that expanding our direct-to-consumer cash-pay business channel could depress pricing with third-party payers and, therefore, have an adverse impact on our results of operations.

This will require significant investment in, and expansion of, our sales and marketing capabilities and use of our own ecommerce platform, as stated previously.

If we are unsuccessful in executing our commercialization efforts in this business channel and do not achieve the sales levels that we expect in light of our current plans and forecasts, we may be unable to recover these investments.

Additionally, there is a risk that expanding our direct-to-consumer cash-pay business channel could erode demand for our prescription products, depress pricing with third-party payors and, therefore, have an adverse impact on our results of operations.

We must successfully attract, hire, train, and retain qualified professionals to service our direct-to-consumer sales channels, and we must productively deploy our professionals to become profitable.

Identifying, recruiting, hiring and retaining professionals, including employees, independent contractors and consultants with diverse skill sets across our broad geography of operations, and consistent with servicing our existing, new and evolving sales channels, direct-to-consumer is critical to our sales strategy.

Identifying, recruiting, hiring, and retaining professionals, including employees, independent contractors, and consultants with diverse skill sets across our broad geography of operations consistent with servicing our existing, new, and evolving sales channels, including direct-to-consumer are critical to our sales strategy.

The market for qualified professionals is evolving, dynamic, and increasingly challenging.

Our corporate reputation is a significant factor consumers’ evaluation of whether to buy our products or potential employees’ evaluation of whether to join our company.

Our corporate reputation is a significant factor on consumers’ evaluation of whether to buy our products and on potential employees’ evaluation of whether to join our company.

If we are unable to recruit skilled professionals, and if we do not deploy those professionals productively, our results of operations may be adversely impacted.

3 unchanged sentences

Competition for highly skilled professionals is intense in the markets where we operate, and we may experience significant employee turnover rates due to such competition.

If we are unable to retain professionals with specialized skills, our revenues, operating efficiency and profitability will decrease.

If we are unable to retain professionals with specialized skills, our revenues, operating efficiency, and profitability would decrease.

Cost reductions, such as reducing headcount, or voluntary departures that result from our failure to retain the professionals we hire, could negatively affect our reputation as an employer and our ability to hire skilled professionals to meet our business requirements.

Increased compensation to retain skilled professionals could lead to lower margins or to higher costs and price increases that may in turn lead to a decline in demand for our products.

Increased compensation to retain skilled professionals could lead to lower margins or higher costs and price increases that could in turn lead to a general reduction in demand levels for our products.

Any significant growth in the market for our products and services or our entry into a new market may require an expansion of our employee base for managerial, marketing, operational, financial, and other purposes.

During any period of growth, we may face problems related to our operational and financial systems and controls, including quality control and delivery and service capacities.

During any period of growth, we may face problems relating to our operational and financial systems and controls, including quality control and delivery and service capacities.

We would also need to continue to expand, train, and manage our employee base.

Continued future growth will impose significant added responsibilities upon the members of management to identify, recruit, maintain, integrate, and motivate new employees.

If we experience price fluctuations for our products and we are unable to reduce our expenses, including the per unit cost of producing our products, there may be a material adverse effect on our business, results of operations, financial condition and cash flows.

We anticipate that we will experience, price fluctuations for our products due to pricing pressure relating to our efforts to drive consumer demand.

We may also face pricing pressure from managed care organizations and other third-party payors due to increased market power of our payors as the medical device industry consolidates, and increased competition among suppliers, including manufacturing services providers.

If the prices for our products decrease and we are unable to reduce our expenses, including the cost of sourcing materials, logistics and the cost to manufacture our products, our sales , results of operations, financial condition and cash flows will be adversely affected.

The global COVID-19 pandemic may result in increased costs for manufacturing and outsourced services while also causing additional pressure to reduce the prices for our products if a recession or depression occurs and people are unable to afford our products.

We cannot predict the ultimate impact that the COVID-19 pandemic and its effects could have on our business operations, financial condition and cash flows.

Any increased or unexpected pricing pressures, costs, delays or failures to achieve cost savings, or unexpected risks we encounter in our business, including those caused by factors outside our control, could adversely affect our business, results of operations, financial condition and cash flows.

Our consultants and c ertain of our sales force are classified as independent contractors, and we can face consequences if it is determined that they are misclassified as such.

There is often uncertainty in the application of worker classification laws, and, consequently, there is risk that our independent contractors could be deemed to be misclassified under applicable law.

The tests governing whether a service provider is an independent contractor or an employee are typically highly fact-intensive and vary by jurisdiction.

Laws and regulations that govern the status and misclassification of independent contractors are also subject to divergent interpretations by various authorities, which contributes to uncertainty or unpredictability in the law.

A misclassification determination or allegation creates potential exposure for us, including, but not limited to, monetary exposure arising from or relating to failure to withhold and remit taxes, unpaid wages, and wage and hour laws and requirements (such as those pertaining to minimum wage and overtime);

claims for employee benefits, social security, workers’ compensation and unemployment;

claims of discrimination, harassment, and retaliation under civil rights laws;

claims under laws pertaining to unionizing, collective bargaining, and other concerted activity;

and other claims, charges, or other proceedings under laws and regulations applicable to employers and employees, including risks relating to allegations of joint employer liability.

Such claims could result in monetary damages (including, but not limited to, wage-based damages or restitution, compensatory damages, liquidated damages, and punitive damages), interest, fines, penalties, costs, fees (including, but not limited to, attorneys’ fees), criminal and other liability, assessment, or settlement.

Such an allegation, claim, adverse determination, including but not limited to with respect to advisors and consultants that provide services to us, could also harm our brand and reputation, which could in turn adversely impact our business.

If we experience price fluctuations for our products, and we are unable to reduce our expenses, including the per unit cost of producing our products, there may be a material adverse effect on our business, results of operations, and financial condition.

We anticipate that we will experience price fluctuations for our products due to pricing pressure relating to our efforts to increase consumer demand for our products.

We may also face pricing pressure from managed care organizations and other third-party payors due to increased market power of our payors while the medical device industry consolidates as well as increased competition among suppliers, including manufacturing services providers.

If the prices for our products decrease, and we are unable to reduce our expenses, including the cost of sourcing materials, logistics, and the cost to manufacture our products, our sales, results of operations, financial condition and cash flows, could be adversely affected.

Macroeconomic conditions may result in increased costs for manufacturing and outsourced services and cause additional pressure to reduce the prices for our products if a recession or depression occurs, and people are unable to afford our products.

We cannot predict the ultimate impact that the ongoing COVID-19 pandemic and its effects and macro-economic conditions could have on our business operations and financial condition.

Any increased or unexpected pricing pressures, costs, delays, or failures to achieve cost savings, and unexpected risks we encounter in our business, including those caused by factors outside our control, could adversely affect our business, results of operations, financial condition and cash flows.

Future acquisitions, strategic investments, or alliances could disrupt our business and harm our business, financial condition, and operating results.

We may in the future explore potential acquisitions of companies or technologies, strategic investments, or alliances to strengthen our business.

We may in the future explore potential acquisitions of companies and technologies, strategic investments, or alliances to strengthen our business.

Acquisitions involve numerous risks, any of which could harm our business, including:

2 unchanged sentences

cultural challenges associated with integrating employees from the acquired company into our organization;

integration of the acquired company's products and technology;

integration of the acquired company's accounting, management information, human resources and other administrative systems;

the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies;

various challenges with regard to the acquired company's products and technology in the existing internal corporate and customer facing systems or processes;

integration of the acquired company's accounting, management information, human resources, and other administrative systems or processes;

the need to implement or improve controls, procedures, and policies in a preexisting business organization that, prior to the acquisition, may have lacked effective controls, procedures, and policies;

coordination of product development and sales and marketing functions;

5 unchanged sentences

Our operations have consumed substantial amounts of cash since inception, and we anticipate this continuing for at least the next 12 months from the date the financial statements included in this Annual Report are made available as we continue seeking to invest in our business.

We believe that our growth will depend, in part, on our ability to fund our commercial efforts for our gammaCore therapy, and to opportunistically pursue research and development activities for additional indications for our gammaCore therapy.

Our existing resources are unlikely to allow us to conduct all of the activities that we believe could be beneficial for our future growth.

We believe that our growth will depend, in part, on our ability to fund our commercial efforts for our VNS platform technology, and to opportunistically pursue research and development activities for additional indications for our gammaCore therapy.

There is no assurance that we will have sufficient cash flow and liquidity to fund our planned activities.

As a result, we will need to seek additional funds in the future or curtail or forgo some or all of such activities.

1 unchanged sentence

As a result, we may be unable to compete effectively.

Although we expect that our existing capital resources and cash flow, will enable us to fund the operating expenses and capital expenditure requirements of our current operating plan for at least the next 12 months from the date the financial statements included in the Annual Report are made available, this estimate is based on assumptions that may prove to be wrong, and we could exhaust or significantly diminish our available capital resources sooner than we expect.

Changes, including those relating to the payer and competitive landscape, our commercialization strategy, our development activities and regulatory matters, may occur beyond our control that would cause us to consume our available capital more quickly.

There is no assurance that we will generate sufficient funds through our operating results or financing activity thereby raising substantial doubt about our ability to continue as a going concern within one year of the date the financial statements included in this Annual Report.

Changes, including those relating to the payor and competitive landscape, our commercialization strategy, our development activities, and regulatory matters, may occur beyond our control that would cause us to consume our available capital more quickly.

Our future capital requirements will depend on many factors, including:

the outcome, timing of, and costs involved with negotiating, obtaining, maintaining and enhancing payer coverage;

• the outcome, timing of, and costs involved with negotiating, obtaining, maintaining, and enhancing payor coverage;

• the outcome, timing of, and costs involved with our plan to potentially expand our direct-to-consumer, cash-pay business channel;

3 unchanged sentences

the costs incurred in defending against pending securities class-action litigations and other potential litigation, as well as the costs of any potential judgements or settlements;

the degree and rate of payer, physician, patient and market acceptance of our gammaCore therapy;

the degree and rate of payor, physician, patient, and market acceptance of our gammaCore therapy;

• the degree and rate of consumer adoption of our non-prescription, wellness product offerings;

the outcome, timing of, and costs involved in, seeking and obtaining clearances or approvals from the FDA and other regulatory authorities, including the potential for the FDA and other regulatory authorities to require that we perform more studies, clinical trials, or tests on our gammaCore therapy than we currently expect;

the research and development activities we may undertake in order to expand our headache indications and enhancements to our gammaCore therapy;

the research and development activities we may undertake to expand our headache indications and enhancements to our gammaCore therapy;

the costs of filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights;

the need for us and third parties, including payers and service providers, to potentially need to implement new or revised policies, infrastructure and internal systems;

our ability to hire additional personnel to support our operations;

the need for us and third parties, including payors and service providers, to potentially implement new or revised policies, infrastructure, and internal systems;

our ability to hire additional personnel to support our various functions and operations;

the emergence and acceptance of competing therapies or other adverse market developments.

To finance our activities, we may seek funds through borrowings or through additional rounds of financing, including public equity or debt offerings and collaborative arrangements with corporate partners.

To finance our activities, we may seek funds through borrowings or through additional rounds of financing, including public or private equity or debt offerings and collaborative arrangements with corporate partners.

We may be unable to raise funds on favorable terms, if at all.

We do not currently have any agreements or understandings with respect to any potential financing.

Our stock price, market capitalization trading volume, and other macro-economic factors may affect our ability to raise funds and the terms on which we will be able to raise funds.

Our stock price, market capitalization trading volume, and other macroeconomic factors may affect our ability to raise funds and the terms on which we will be able to raise funds.

Our failure to obtain additional necessary financing could impair our ability to conduct our operations, and any such failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to (i) pursue our business plans and strategies and (ii) maintain our listing on the Nasdaq Stock Market.

In addition, our auditors report for our 2022 financial statements contains a statement concerning our ability to continue as a "going concern".

Our lack of sufficient liquidity could make it more difficult for us to secure additional financing terms acceptable to us, if at all, and may materially and adversely affect the terms of any financing that we may obtain and our stock price generally.

Our ability to continue our operations depends upon, among other things, our ability to increase revenue, reduce operating expenses and obtain additional funding through the sale of equity and or debt securities, debt financing, a strategic transaction or otherwise.

However, there are significant risks and uncertainties as to our ability to achieve these goals or obtain required funding on commercially reasonable terms or at all, including as a result of the adverse impact on our business from the COVID-19 pandemic.

Our ability to continue our operations depends upon, among other things, our ability to increase revenue, reduce operating expenses, and obtain additional funding through the sale of equity and/or debt securities, debt financing, strategic transactions, or otherwise.

However, there are significant risks and uncertainties as to our ability to achieve these goals or to obtain required funding on commercially reasonable terms or at all, including as a result of the adverse impact on our business from the ongoing COVID-19 pandemic and other macro-economic conditions.

2 unchanged sentences

We might have to obtain funds through arrangements with collaborative partners or others that may require us to relinquish rights to our technologies, therapeutic candidates, or products that we otherwise would not relinquish.

If we do not obtain additional resources, our ability to capitalize on business opportunities will be limited, we may be unable to compete effectively, and the growth of our business will be harmed.

Our reported financial results may be adversely affected by new accounting pronouncements or changes in existing accounting standards and practices.

Generally accepted accounting principles in the United States, or GAAP, are subject to interpretation by the Financial Accounting Standards Board, or FASB, the American Institute of Certified Public Accountants, or the AICPA, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles.

Such changes to our accounting and GAAP reporting may significantly affect our results of operations to the extent that actual results differ significantly from estimated and previous quarter results or vary materially from quarter to quarter.

While the adoption of the new standards will not change the cash flows, we receive from our contracts with customers, the changes to our reporting practices and the potential fluctuations in our reported results could cause a decline and/or fluctuation in the price of our common stock.

Changes in certain areas of our business have resulted in the adoption of new accounting principles.

Our evolving commercial strategy has resulted in the launch of cash pay models which under GAAP will lead to the cost of our goods being treated as licensed products pursuant to which the licensed starter kit will be classified as an "other asset" on the company's balance sheet and the cost of the starter kit will be recognized over the license period based on the estimated useful life of the kit, while the cost of goods sold related to the therapy will be expensed upon shipment.

This change results in a different accounting methodology which may affect the value of assets on our balance sheet.

The new accounting practices could cause our results of operations to have greater variability due to the impact of changes on the estimated recoverability of such asset values.

In addition, licensed product accounting is based off a series of useful life assumptions that may prove to be inaccurate and will be subject to change from time to time, all of which can result in fluctuations from period to period for balance sheet items and have a related impact on our results of operations.

If we do not obtain additional resources, our ability to capitalize on business opportunities will be limited and we may be unable to compete effectively, and the growth of our business would be materially and adversely harmed.

Risks Related to Our Business and the Development of Our gammaCore Therapy

We received an EUA from the FDA in July 2020 to facilitate the study and clinical use of gammaCore Sapphire CV for the acute treatment of asthma exacerbations in known or suspected COVID-19 patients.

However, there can be no assurance as to the impact, if any, that the EUA and commercialization of gammaCore Sapphire CV will have on us, our business, operations or financial condition .

On April 2, 2020, we announced the submission of an EUA application to the FDA to facilitate the study and clinical use of gammaCore Sapphire CV for the acute treatment of asthma exacerbations in known or suspected COVID-19 patients.

On July 13, 2020, we announced that the FDA had granted the EUA.

Unless earlier terminated or revoked by the FDA, the EUA is expected to remain in effect for the duration of the COVID-19 pandemic justifying emergency use.

The termination, revocation or expiration of the EUA could have a material adverse effect on the sales of gammaCore and the results of our operations and financial condition.

In addition, if the EUA terminates, is revoked or expires, we will be obligated to seek return of the devices from physicians and patients, which could be expensive and time-consuming.

Additionally, we may have to incur targeted marketing and other expenditures to achieve sales of the gammaCore Sapphire CV.

We have limited experience with commercializing a respiratory product in the United States.

We did not recognize material revenue from sales of our gammaCore Sapphire CV during the fiscal year ended December 31, 2021.

We may be unable to successfully commercialize or gain market acceptance of gammaCore Sapphire CV and may not be able to obtain adequate coverage and reimbursement for gammaCore Sapphire CV from third-party payers.

As a result of these and other significant challenges and uncertainties, there can be no assurance as to what impact, if any, the EUA will have on us, our business, operations or financial condition.

Regulatory requirements and changes to payers’ prescription benefit plans and medical pathway plans could adversely impact our business and financial results.

Regulatory requirements and changes to payors’ prescription benefit plans and medical pathway plans could adversely impact our business and financial results.

While we have ongoing discussions with the Centers for Medicare and Medicaid Services, our products are not currently covered by Medicare and Medicaid.

1 unchanged sentence

Our commercialization strategy, including our planned reimbursement approach with respect to our gammaCore therapy, is likely to subject us to additional audit oversight requirements, and if material contractual or regulatory non-compliance were to be identified, applicable sanctions and/or monetary penalties may be imposed, which could have an adverse effect on our financial position, results of operations, or cash flows.

In time, changes in payer prescription benefit plans or medical pathway plans could have the effect of rendering existing pharmacy benefit plans or medical pathway plans less valuable to beneficiaries and reduce the total market for our gammaCore therapy.

In addition, some payers could decide to discontinue providing full or partial coverage to their members for our gammaCore therapy, which could have an adverse effect on our financial position, results of operations or cash flows.

Our commercialization strategy may expose us to increased billing, cash application and credit risks.

In time, changes in payor prescription benefit plans or medical pathway plans could have the effect of rendering existing pharmacy benefit plans or medical pathway plans less valuable to beneficiaries and reduce the total market for our gammaCore therapy.

In addition, some payors could decide to discontinue providing full or partial coverage to their members for our gammaCore therapy, which could have an adverse effect on our financial position, results of operations, or cash flows.

Our commercialization strategy of gammaCore may expose us to increased billing, cash application, and credit risks.

Our commercialization strategy may involve funding for our gammaCore therapy through medical benefit coverage, the majority of which is provided by private insurers, as well as reimbursement by government agencies.

Such claims are generally for very high-priced medicines, and collection of payments from insurance companies, patients and other payers generally takes substantially longer than for those claims administered through a pharmacy benefit manager.

Such claims are generally for very high-priced medicines, and collection of payments from insurance companies, patients, and other payors generally takes substantially longer than for those claims administered through a pharmacy benefit manager.

Because of the high cost of these claims, complex billing requirements, and the nature of the medical benefit coverage determination process, these accounts receivable are characterized by higher risk in collecting the full amounts due and applying the associated payments.

In addition, possible sales in our EUA business channel to hospitals, which may involve higher credit risks than sales to other payers.

Revenues from the sale of our gammaCore therapy somewhat depend on the continued availability of reimbursement by government and private insurance plans.

The government’s Medicare regulations are complex and, as a result, the billing and collection process is time-consuming and typically involves the submission of claims to multiple payers whose payment of claims may be contingent upon the payment of another payer.

Because of the coordination with multiple payers and the complexity in determining reimbursable amounts, these accounts receivable have higher risk in collecting the full amounts due and applying the associated payments.

In addition, possible sales in our EUA business channel to hospitals may involve higher credit risks than sales to other payors.

Revenues from the sale of our gammaCore therapy partially depend on the continued availability of reimbursement by government and private insurance plans.

The government’s Medicare regulations are complex, and, as a result, the billing and collection process is time-consuming and typically involves the submission of claims to multiple payors whose payment of claims may be contingent upon the payment of another payor.

Because of the coordination with multiple payors, and the complexity in determining reimbursable amounts, these accounts receivable have higher risk in collecting the full amounts due and applying the associated payments.

Our gammaCore therapy commercialization strategy may require premium payments from members for the ongoing benefit as well as amounts due from insurers and government-sponsored or national health insurance programs.

1 unchanged sentence

Additionally, we may be subject to increased credit risk associated with state and local government agencies experiencing increased fiscal challenges.

As a result of these aforementioned risks, our commercialization strategy, even if successful, may involve recordation of bad debt expenses potentially impacting our results of operations and liquidity.

Third-party payers have been resistant to cover gammaCore through pharmacy benefit plans, which has hindered our commercialization strategy and required changes to our existing business that could delay and negatively impact our ability to generate revenue.

In the United States our initial strategy to obtain reimbursement for gammaCore under payers’ pharmacy benefit has not achieved adequate coverage and reimbursement.

To obtain coverage and reimbursement from Medicare and any other third-party payer that will not cover gammaCore under a pharmacy benefit, we are seeking coverage and reimbursement as a medical device or item of durable medical equipment.

As a result of the aforementioned risks, our commercialization strategy, even if successful, may involve recordation of bad debt expenses potentially impacting our results of operations and liquidity.

Third-party payors have been resistant to cover gammaCore through pharmacy benefit plans, which has hindered our commercialization strategy and required changes to our existing business that could delay and negatively impact our ability to generate revenue.

In the United States, our initial strategy to obtain reimbursement for gammaCore under payors’ pharmacy benefit has not achieved adequate coverage and reimbursement.

To obtain coverage and reimbursement from Medicare and any other third-party payor that will not cover gammaCore under a pharmacy benefit, we are seeking coverage and reimbursement as a medical device or item of durable medical equipment.

While this would provide coverage for the therapy under a patient’s medical insurance, patients may be unwilling to pay out of pocket for deductibles and co-pays for the therapy.

Any determination by commercial payers to provide coverage for gammaCore through the medical benefit pathway and not through pharmacy benefit pathway will further delay or pose more risks to our commercial plan for gammaCore therapy since additional medical device codes required and we may incur additional direct and indirect expenses in assisting patients with their co-pay or other costs emergent from the determination by payers to not cover gammaCore under the pharmacy benefit pathway.

Coverage by commercial payers through the medical benefit pathway or other decisions by commercial payers that have the effect of making patients personally responsible for the costs of, or costs associated with, our gammaCore therapy could adversely impact our results of operations and financial condition.

Any determination by commercial payors to provide coverage for gammaCore through the medical benefit pathway and not through pharmacy benefit pathway will further delay or pose more risks to our commercial plan for gammaCore therapy since additional medical device codes are required, and we may incur additional direct and indirect expenses in assisting patients with their co-pay or other costs emergent from the determination by payors to not cover gammaCore under the pharmacy benefit pathway.

Coverage by commercial payors through the medical benefit pathway or other decisions by commercial payors that have the effect of making patients personally responsible for the costs of, or costs associated with, our gammaCore therapy could adversely impact our results of operations and financial condition.

These potential changes may entail numerous risks, including increased operating expenses, requirements to comply with healthcare regulatory laws, the loss of or delay in obtaining revenue, and uncertainty in our ability to successfully implement the modifications.

The failure to obtain recognition by third-party payers under the pharmacy benefit model has required us to modify our commercialization strategy, our distribution model, our pricing, and our operations, any of which could have a material adverse effect on the sales of gammaCore and the results of our operations and financial condition.

We must demonstrate to patients, physicians and third-party payers the medical and economic benefits of our gammaCore therapy compared to those of our competitors or other available therapies and such comparisons may not be realizable.

The failure to obtain recognition by third-party payors under the pharmacy benefit model has required us to modify our commercialization strategy, our distribution model, our pricing, and our operations, any of which could have a material adverse effect on the sales of gammaCore and the results of our operations and financial condition.

We must demonstrate to patients, physicians, and third-party payors the medical and economic benefits of our gammaCore therapy compared to those of our competitors or other available therapies, and such comparisons may not be realizable.

Physicians play a significant role in determining the course of a patient’ s treatment and, as a result, the type of product that will be used to treat a patient.

As a result, our success depends, in large part, on effectively marketing our gammaCore therapy to physicians.

We have received several 510(k) clearances from the FDA for gammaCore therapy, however, such clearances do not necessitate adoption by physicians.

We have received several 510(k) clearances from the FDA for gammaCore therapy;

however, such clearances do not necessitate adoption by physicians.

In order for our gammaCore therapy to gain widespread adoption, we must successfully demonstrate to physicians the medical and economic benefits of our gammaCore therapy compared to competitors’ products, including (i) BOTOX marketed by Allergan plc, (ii) CGRP receptor agonists marketed by Amgen Inc.

(with a co-marketing arrangement with Novartis International AG), Allergan plc, Eli Lilly and Company, Teva Pharmaceutical Industries Ltd., Biohaven Pharmaceuticals Inc., (iii) lasmiditan, marketed by Eli Lilly, (iv) Vycpti, an intravenous preventive treatment for migraine marketed by H.

(with a co-marketing arrangement with Novartis International AG), Allergan plc, Eli Lilly and Company, Teva Pharmaceutical Industries Ltd., and Pfizer Inc., (iii) lasmiditan, marketed by Eli Lilly, (iv) Vycpti, an intravenous preventive treatment for migraine marketed by H.

Lundbeck A/S, and (v) neuromodulation devices that have been marketed for the acute treatment and/or prevention of migraine, including the Cefaly and Nerivio devices.

We also may face challenges because noninvasive VNS, or nVNS, is relatively new as compared to existing traditional treatments for cluster and migraine headaches.

Furthermore, the competitive landscape for COVID-19 therapies is crowded and continues to evolve at a rapid pace.

Various other companies, many with greater resources, are developing or commercializing treatments that potentially compete with gammaCore Sapphire CV.

This competition could have a material adverse effect on potential acceptance, use, pricing and sales of gammaCore Sapphire CV.

Acceptance of our gammaCore therapy depends on educating patients and physicians as to the distinctive characteristics, perceived benefits, safety, ease of use and cost-effectiveness of our gammaCore therapy as compared to our competitors’ products and communicating to physicians the proper use of our gammaCore therapy.

We also may face challenges because noninvasive VNS, or nVNS, is relatively new compared to existing traditional treatments for cluster and migraine headaches.

Acceptance of our gammaCore therapy depends on educating patients and physicians as to the distinctive characteristics, perceived benefits, safety, ease of use, and cost-effectiveness of our gammaCore therapy relative to our competitors’ products and communicating to physicians the proper use of our gammaCore therapy.

If we are not successful in convincing patients and physicians of the merits of our gammaCore therapy or educating them on the benefits of our gammaCore therapy, they may not seek a prescription or prescribe our gammaCore therapy, and we may be unable to increase our sales, sustain our growth, or achieve profitability.

In addition, we believe support of our products by physicians is essential for market acceptance and adoption.

If we do not receive support from physicians or long-term data does not show the benefits of using our gammaCore therapy, patients and physicians may not use it.

In such circumstances, our results of operations would be materially adversely affected.

Stimulating therapeutically relevant fibers in the vagus nerve by a proprietary high-frequency burst waveform that passes through the skin cells represents a novel approach to treating pain, and we must overcome significant challenges in order to successfully develop, commercialize and manufacture our product.

If we do not receive support from physicians, or long-term data do not show the benefits of using our gammaCore therapy, patients and physicians may not use it.

In such circumstances, our results of operations would be materially and adversely affected.

We must demonstrate to customers the benefits of nVNS platform technology for general wellbeing and human performance compared to those of our competitors and such comparisons may not be realizable.

Consumer sentiments play a significant, and increasing, role in determining customer adoption of certain wellness products.

In general, our success depends on the continued willingness of consumers to use health and wellness products and services and to place value in the primacy of scientific evidence in the marketing of wellness products and services.

To be successful, we will need to continue to significantly invest in educating consumers about our products.

This need is elevated in the light of the health and wellness market’s particular characteristics.

The market is heavily saturated, and the expected future demand for and market acceptance of innovative products and services in the market are uncertain.

While we believe it is reasonable to predict that the overall health and wellness market will continue to grow, it is difficult to predict the future growth rates, if any, of certain sectors that intersect with comparable and substitution products relevant to our business.

As a result, if our market does not further develop, or develops more slowly than expected, or becomes saturated with competitors with greater financial or other resources, or if our products do not achieve sufficient adoption in accordance with present and future business plans, our financial condition, and operating results could be materially and adversely affected.

In particular, as stated previously, acceptance of our nVNS platform technology depends on educating patients as to the distinctive characteristics, perceived benefits, safety, ease of use, and cost-effectiveness of our nVNS platform technology relative to our competitors’ products and communicating to customers the proper use of our nVNS products.

As a result, our success depends, in large part, on effectively marketing our nVNS platform technology to consumers.

For our nVNS platform technology to gain widespread adoption, we must successfully demonstrate to consumers the relative benefits of our nVNS platform technology compared to competitors’ products.

We also may face challenges because nVNS is relatively new compared to existing wellness products across a multitude of price points.

Further, the competitive landscape for wellness products is crowded and continues to rapidly evolve.

Therefore, our wellness business line faces a diverse set of challenges that may have a significant effect on your investment.

Stimulating therapeutically relevant fibers in the vagus nerve by a proprietary high-frequency burst waveform that passes through the skin cells represents a novel approach to treating pain, and we must overcome significant challenges to successfully develop, commercialize, and manufacture our product.

We have concentrated our development and commercialization efforts on products based on a platform of stimulating therapeutically relevant fibers in the vagus nerve by a proprietary high-frequency burst waveform that passes through the skin.

We believe that our product platform represents a novel approach to treating pain.

However, to date, the FDA has cleared only our product for commercialization based on this platform.

The processes and requirements imposed by the FDA or other applicable health authorities may cause delays and additional costs in obtaining approvals for marketing authorization for our products.

Because our platform is novel, regulatory agencies, as well as insurance and other coverage providers and payers, may lack experience in evaluating product candidates like gammaCore and gammaCore Sapphire.

However, to date, the FDA has cleared only our gammaCore products for commercialization based on this platform.

The processes and requirements imposed by the FDA or other applicable health authorities may cause delays and additional costs in obtaining approvals for marketing authorization for our gammaCore products.

Because our platform is novel, regulatory agencies, as well as insurance and other coverage providers and payors, may lack experience in evaluating product candidates like gammaCore and gammaCore Sapphire.

This inexperience may lengthen the regulatory review process, increase our development costs, and delay or prevent reimbursement and commercialization of our platform products.

5 unchanged sentences

establishing sales and marketing capabilities as well as developing a manufacturing process and distribution network to support the commercialization of any approved products.

We must be able to overcome these challenges in order to successfully develop, commercialize and manufacture our product candidates.

We must be able to overcome these challenges in order to successfully develop, commercialize, and manufacture our gammaCore and product candidates.

Our operating results may vary significantly from quarter to quarter because of seasonality, bulk orders, shipments to distributors, or otherwise.

Our quarterly revenue and results of operations may fluctuate from quarter to quarter due to, among others, the following reasons:

physician and payer acceptance of our gammaCore therapy;

patients' acceptance of gammaCore therapy;

physician and payor acceptance of our gammaCore therapy;

• patients' acceptance of our nVNS platform technology gammaCore therapy;

• customer acceptance of our wellness and performance products;

• payor adoption;

• estimated useful life of products;

the timing of when individual payer coverage becomes available;

the timing of when individual payor coverage becomes available;

• patient and physician product returns;

7 unchanged sentences

changes in our pricing policies or in the pricing policies of our competitors or suppliers;

adverse developments in coverage amounts, benefit pathway, or government and third-party payers’ reimbursement policies;

adverse developments in coverage amounts, benefit pathway, or government and third-party payors’ reimbursement policies;

the timing of customer budget cycles.

Our results may also fluctuate on a seasonal basis due to the seasonality of cluster and migraine headache attacks, which could affect the comparability of our results between periods.

These seasonal variations are difficult to predict accurately, may vary across different markets, and at times may be entirely unpredictable, which introduces additional risk into our business as we may rely upon forecasts of customer demand to build inventory in advance of anticipated sales.

In addition, we believe our limited history commercializing our gammaCore therapy has, in part, made our seasonal patterns more difficult to discern, making it more difficult to predict future seasonal patterns.

These seasonal variations are difficult to predict accurately, may vary across different markets, and at times may be entirely unpredictable, which introduce additional risk into our business because we may rely upon forecasts of customer demand to build inventory in advance of anticipated sales.

In addition, we believe our limited commercial history has, in part, made our seasonal patterns more difficult to discern, making it more difficult to predict future seasonal patterns.

We derive a material portion of our revenue from a limited number of customers, and the loss of one or more of these customers could adversely impact our business, results of operations, and financial condition.

Our c ustomer base is concentrated.

During the years ended December 31, 2021 and 2020, revenue from VA/DoD facilities pursuant to our qualifying contract under the Federal Supply Schedule and open market sales represented 60 % and 58 % of our total revenue, respectively.

In 2021, four specific VA/DoD facilities represented approximately 51 % of our revenue from this channel, and two of those facilities each accounted for more than 10% individually.

During the years ended December 31, 2022 and 2021, revenue from Department of Veteran Affairs and Department of Defense (VA/DoD) facilities pursuant to the terms and conditions of our qualifying contract under the Federal Supply Schedule and open market sales represented 60.8 % and 59.8 % of our total revenue, respectively.

In 2022, five specific VA/DoD facilities represented approximately 52.8 % of our revenue from this channel, and one of those facilities accounted for more than 10% individually.

If we were to lose one or more of our significant customers, our revenue may significantly decline.

The loss of one or more of our significant customers could adversely affect our business, results of operations, and financial condition.

In addition, our direct-to-consumer enablement platform is backed by a dispense who acts as a stocking distributor.

If the direct-to-consumer initiatives are successful, there may create a new concentrated customer.

Any issues that arise with respect to our direct-to-consum er enablement platform supplier could adversely affect our business, results of operations, and financial condition.

Because of these and other factors, it is likely that, in some future period, our operating results will not meet investor expectations or those of public market analysts.

7 unchanged sentences

Despite the precautionary measures we and third parties have taken to prevent breakdowns in information technology and telephone systems, if these systems are breached or suffer severe damage, disruption, or shutdown, and we are unable to effectively resolve the issues in a timely manner, our business and operating results may suffer, and we may be subject to related lawsuits.

We may engage in future acquisitions that increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.

We may evaluate various strategic transactions, including licensing or acquiring complementary therapies, products, technologies or businesses.

Any potential acquisitions may entail numerous risks, including increased operating expenses and cash requirements, assimilation of operations and products, retention of key employees, diversion of our management’ s attention and uncertainties in our ability to maintain key business relationships of the acquired entities.

We may engage in future acquisitions that increase our capital requirements, dilute our stockholders, cause us to incur debt, or assume contingent liabilities that subject us to other risks.

We may evaluate various strategic transactions, including licensing or acquiring complementary therapies, products and technologies, or businesses.

Any potential acquisitions may entail numerous risks, including increased operating expenses and cash requirements, assimilation of operations and products, retention of key employees, diversion of our management’ s attention, and uncertainties in our ability to maintain key business relationships of the acquired entity or entities.

In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses, and acquire intangible assets that could result in significant future amortization expense.

2 unchanged sentences

The failure to manage acquisitions, investments, licenses, or other strategic alliances, or the failure to integrate them with our existing business, could harm our business.

Our success depends in part on our ability to continually enhance and broaden our product offerings in response to changing customer demands, competitive pressures, technologies and market pressures.

Accordingly, from time to time we may consider opportunities to acquire, make investments in or license other technologies, products and businesses that may enhance our capabilities, complement our current products or expand the breadth of our markets or customer base.

Our success depends in part on our ability to continually enhance and broaden our product offerings in response to changing customer demands, competitive pressures, and technologies.

Accordingly, from time to time, we may consider opportunities to acquire or make investments in businesses, or make investments in or license other technologies and products, that may enhance our capabilities, complement our current products, or expand the geographic or product breadth of our markets or customer base.

P otential and completed acquisitions, strategic investments, licenses, and other alliances involve numerous risks, including:

16 unchanged sentences

Undesirable side effects caused by our gammaCore therapy could also result in the delay or denial of regulatory clearance or approval by the FDA or other regulatory authorities or in more restrictive labels than we desire.

Commercialization of our gammaCore Sapphire therapy for additional neurological conditions may require c linical trials, which are very expensive, take a long time to complete, and are difficult to design and implement and involve uncertain outcomes.

Commercialization of our gammaCore Sapphire therapy for additional conditions may require c linical trials, which are very expensive, take a long time to complete, and are difficult to design and implement and involve uncertain outcomes.

Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies, clinical trials, or commercial success.

11 unchanged sentences

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in clinical trial procedures set forth in protocols, differences in the size and type of the patient populations, adherence to the dosing regimen and other clinical trial protocols, and the rate of dropout among clinical trial participants.

If we fail to produce positive results in our planned preclinical studies or clinical trials of any of our product candidates, the development timeline and regulatory clearance and commercialization prospects for our product candidates, and, correspondingly, our business and financial prospects, would be materially adversely affected.

Any clinical trial we conduct in the United States may subject us to additional costs and detriments compared to a foreign clinical trial, which may negatively impact our financial condition and our business.

7 unchanged sentences

If we are unable to enroll patients in future clinical trials, our research and development efforts could be adversely affected.

Identifying and qualifying patients to participate in future clinical trials for our gammaCore therapy in additional areas of indications is critical to our success.

Successful and timely completion of future clinical trials will require that we enroll a sufficient number of patients who remain in the study until its conclusion.

Identifying and qualifying patients to participate in future clinical trials for our gammaCore therapy in additional areas of indications are critical to our success.

Successful and timely completion of future clinical trials will require that we enroll a sufficient number of patients who remain in the study until conclusion.

If we are unable to enroll a sufficient number of patients in our future clinical trials, our timelines for recruiting patients, conducting clinical trials, and obtaining regulatory clearance or approval of our gammaCore therapy in additional areas of indication may be delayed.

18 unchanged sentences

Delays in the completion of any clinical trial of our gammaCore therapy will increase our costs, slow down our expansion into additional treatment indications and approval process, and delay or potentially jeopardize our ability to commence product sales and generate future revenue.

We have recently reduced resources in research and development which may delay our receipt of regulatory approvals for additional indications.

In addition, many of the factors that may lead to a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory clearance or approval of our gammaCore therapy in additional treatment indications.

Clinical trials may be delayed, suspended, or terminated for many reasons, which will increase our expenses and delay the time it takes to develop and expand our gammaCore therapy in additional treatment indications.

We may experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether future preclinical studies or clinical trials will begin on time, need to be redesigned, enroll an adequate number of patients on time or be completed on schedule, if at all.

We may experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether future preclinical studies or clinical trials will begin on time, need to be redesigned, will enroll an adequate number of patients on time or be completed on schedule, if at all.

The commencement and completion of clinical trials may be delayed, suspended or terminated as a result of many factors, including:

9 unchanged sentences

reports from preclinical or clinical testing of other similar therapies that raise safety or efficacy concerns;

regulators or IRBs requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or safety concerns, among others;

regulators or IRBs requiring that we or our investigators suspend or terminate clinical research for various reasons, including non-compliance with regulatory requirements or safety concerns, among others;

lower than anticipated retention rates of patients and volunteers in clinical trials;

6 unchanged sentences

exceeding budgeted costs due to difficulty in accurately predicting costs associated with clinical trials.

In particular, in connection with the comprehensive redeployment plan and cost reduction implemented in June 2019, we have closed certain clinical trials in indications that are more exploratory in nature.

We could also encounter delays if a clinical trial is suspended, terminated, or paused by us, as we have done with our PREMIUM II trial, by the IRBs or ethics committees of the institutions at which such trials are being conducted, by the data safety monitoring board for such trial or by the FDA or other regulatory authorities.

Consistent with recent years, we continue not to invest in certain clinical trials in indications that are more exploratory in nature.

We could also encounter delays if a clinical trial is suspended or terminated (or paused by us, as we have done with our PREMIUM II trial) by the IRBs or ethics committees of the institutions at which such trials are being conducted, by the data safety monitoring board for such trial, or by the FDA or other regulatory authorities.

Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice (or GCP) regulations, or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations, or administrative actions, or lack of adequate funding to continue the clinical trial.

In addition, we may encounter delays if the FDA, or other regulators, conclude that our financial relationships with investigators results in a perceived or actual conflict of interest that may have affected the interpretation of a study, the integrity of the data generated at the applicable clinical trial site or the utility of the clinical trial itself.

In addition, we may encounter delays if the FDA, or other regulators, conclude that our financial relationships with investigators result in a perceived or actual conflict of interest that may have affected the interpretation of a study, the integrity of the data generated at the applicable clinical trial site, or the utility of the clinical trial itself.

Principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash compensation and/or stock options in connection with such services.

6 unchanged sentences

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial, suspension, or revocation of expanded regulatory clearance or approval of our product candidates.

Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.

Even if our products are approved or cleared in the United States and obtained a CE Certificate of Conformity in the EEA, comparable regulatory authorities of additional foreign countries must also approve the manufacturing and marketing of our products in those countries.

Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or could allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.

Even if our products are approved or cleared in the United States and obtain a CE Certificate of Conformity in the EEA, comparable regulatory authorities of additional foreign countries must also approve the manufacturing and marketing of our products in those countries.

Approval and clearance procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States or the EEA, including additional preclinical studies or clinical trials.

8 unchanged sentences

We have a relatively short history of operating as a commercial company.

We intend to seek to continue to grow our existing headache business and our COVID-19 business pursuant to the EUA, and may experience periods of rapid growth and expansion, which could place a significant additional strain on our limited personnel, information technology systems and other resources.

We intend to continue to grow our existing business and may experience periods of rapid growth and expansion, which could place a significant additional strain on our limited personnel, information technology systems, and other resources.

In particular, maintaining our sales force in the United States requires significant management, financial, and other supporting resources.

3 unchanged sentences

Any such delay or increased expense could adversely affect our ability to generate our revenue.

Future growth will also impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees.

Future growth will also impose significant added responsibilities on management, including the need to identify, recruit, train, or integrate additional employees.

In addition, rapid and significant growth will place a strain on our administrative and operational infrastructure.

2 unchanged sentences

If we fail to develop and retain an effective sales force, our business could suffer.

In order to continue to market and sell our gammaCore therapy, we may in the future need to substantially expand our direct sales force.

In order to continue to market and sell our nVNS platform technology, we may in the future need to substantially expand our direct sales force.

There is significant competition for such personnel.

Once hired, the training process is lengthy because it requires significant education for new territory business managers to achieve the level of clinical competency with our products expected by physicians.

Upon completion of the training, our territory business managers typically require lead time in the field to grow their network of accounts and achieve the productivity levels we expect them to reach in any individual territory or VA or DoD facility.

Upon completion of the training, our territory business managers typically require "lead time" in the field to grow their network of accounts and achieve the productivity levels we expect them to reach.

Furthermore, the use of our products often requires or benefits from direct support from us.

If we are unable to attract, motivate, develop, and retain a sufficient number of qualified sales personnel, and if our territory business managers do not achieve the productivity levels, we expect them to reach, our revenue will not grow at the rate we expect and, our financial performance will suffer.

Also, to the extent we hire personnel from our competitors, we may have to wait until applicable non-competition provisions have expired before deploying such personnel in restricted territories or incur costs to relocate personnel outside of such territories, and we have been in the past, and may be subject to future allegations that these new hires have been improperly solicited, or that they have divulged to us proprietary or other confidential information of their former employers.

Also, to the extent we hire personnel from our competitors, we may have to wait until applicable non-competition provisions have expired before deploying such personnel in restricted territories or incur costs to relocate personnel outside of such territories, and, in the past, we have been subject to, and may, in the future, be subject to, allegations that these new hires have been improperly solicited, or that they have divulged to us proprietary or other confidential information of their former employers.

Any of these risks may adversely affect our business.

We have no history of commercializing respiratory products within the United States or selling our gammaCore therapy pursuant to an Emergency Use Authorization.

We have limited experience engaging in commercial activities and limited established relationships with physicians, hospitals and payers as well as third-party suppliers on whom we depend for the manufacture of our product components.

We may be unable to commercialize gammaCore Sapphire CV for the acute treatment of asthma exacerbations in known or suspected COVID-19 patients for a number of reasons, including:

lack of strong relationships with customers, including physicians, hospitals and third-party suppliers;

changes to safety labeling for use of gammaCore Sapphire CV pursuant to the EUA

limitations in our ability to demonstrate differentiation and advantages of our product compared to competing products and the relative safety, efficacy and ease of use of our product;

the limited size of our sales force and the learning curve required to gain experience selling our product;

the inability to obtain sufficient supply of the product components for our gammaCore therapy from our primary and secondary manufacturers and suppliers;

insufficient financial or other resources to support our commercialization efforts necessary to reach profitability;

the introduction and market acceptance of new, more effective or less expensive competing products and technologies.

We have only a limited history commercializing our gammaCore therapy for the acute treatment of eCH, prevention of cluster headache, preventive and acute treatment of migraine in the United States for which market acceptance and commercial success is uncertain.

As a small company with a limited history of selling our gammaCore therapy, we have limited experience engaging in commercial activities and limited established relationships with physicians, hospitals and payers as well as third-party suppliers on whom we depend for the manufacture of our product components.

We may be unable to gain broader market acceptance in the countries in which we have already begun to commercialize our gammaCore therapy, or, if approved by the FDA for additional indications, unable to successfully commercialize it in the United States for a number of reasons, including:

established competitors with strong relationships with customers, including physicians, hospitals, military treatment facilities and third-party suppliers;

limitations in our ability to demonstrate differentiation and advantages of our product compared to competing products and the relative safety, efficacy and ease of use of our product;

the limited size of our sales force and the learning curve required to gain experience selling our product;

the inability to obtain sufficient supply of the product components for our gammaCore therapy from our primary and secondary manufacturers and suppliers;

insufficient financial or other resources to support our commercialization efforts necessary to reach profitability;

the introduction and market acceptance of new, more effective or less expensive competing products and technologies.

We have limited history of commercializing wellness products withing the United States or abroad.

We have limited established relationships with stakeholders and experience in direct-to-consumer channels and limited relationships with third-party suppliers on whom we depend for the manufacture of our product components.

If our competitors are better able to develop and market primary headache treatments that are safer, more effective, less costly, easier to use, or otherwise more attractive than our gammaCore therapy, our business and business prospects will be adversely impacted.

19 unchanged sentences

If our competitors are more successful than us in these matters, our business may be harmed.

Many of our competitors are large, well-established companies with substantially greater resources than us and have a long history of competing in the migraine markets.

Many of our current and potential competitors are publicly traded, or are divisions of publicly traded, major pharmaceutical and medical device companies that have substantially greater financial, technical, sales and marketing resources than we do.

Many of our primary headache competitors are large, well-established companies with substantially greater resources than us and have a long history of competing in the migraine or wellness markets.

Many of our current and potential primary headache competitors are publicly traded, or are divisions of publicly traded, major pharmaceutical and medical device companies that have substantially greater financial, technical, sales and marketing resources than we do.

We will face steep competition from Allergan plc, Amgen Inc., H.

Lundbeck A/S, Novartis International AG, Teva Pharmaceutical Industries Ltd., Biohaven Pharmaceuticals Inc.

and Eli Lilly and Company, among other established and potential competitors that may be better capitalized and have a history of commercializing products around the world.

Lundbeck A/S, Novartis International AG, Teva Pharmaceutical Industries Ltd., Pfizer Inc., and Eli Lilly and Company, among other established and potential competitors that may be better capitalized and have a history of commercializing products around the world.

Also, several neuromodulation devices are approved for the treatment and/or prevention of migraine, including Cefaly, Nerivo, or any other neuromodulation devices that may be marketed for use in treating pain associated with primary headache.

Cefaly has been granted an OTC clearance allowing it to be sold without a prescription, and the impact of this clearance on the competitive landscape remains to be seen.

Given the size of the existing and potential market in the United States, we expect that as we continue our commercial efforts in the United States our current and future competitors including any who may compete with us in the direct-to-consumer channel, will take aggressive action to protect their current market position.

Given the size of the existing and potential market in the United States, we expect that, as we continue our commercial efforts in the United States, our current and future competitors, including any who may compete with us in the direct-to-consumer channel, will take aggressive action to protect their current share of the market.

We will face significant competition in establishing our market share in the United States and may encounter unforeseen obstacles and competitive challenges in the United States.

1 unchanged sentence

Physicians who use our competitors’ products for the treatment of migraine headache may be reluctant to try new products from a source with which they are less familiar.

If these physicians do not try and subsequently adopt our product, then our financial performance will be adversely affected.

In the United Kingdom, Fremanezumab has been recommended for use in the National Health Service by the National Institute Health and Care Excellence for the treatment of migraine.

Although our current business in the United Kingdom is almost entirely for the prevention and treatment of cluster headache, this recommendation may limit our ability to penetrate the migraine market in the United Kingdom.

Further, a number of our competitors are currently conducting, or we anticipate will be conducting, clinical trials to demonstrate the results of their headache products.

If these physicians do not try, and subsequently adopt, our product, then, our financial performance would be adversely affected.

In the United Kingdom, three of the CGRP monoclonal antibody therapies have been recommended for use in the National Health Service by the National Institute Health and Care Excellence for the prevention of migraine.

All of our current business with the National Health Service in the United Kingdom is for the prevention and treatment of cluster headache, and these recommendations may limit our ability to penetrate the NHS migraine market in the United Kingdom.

Furthermore, a number of our competitors are currently conducting, or we anticipate will be conducting, clinical trials to demonstrate the results of their headache products.

The results of these trials may be equivalent to, or potentially better than, the results of our clinical trials, which could have a material adverse effect on us.

The completion of our competitors’ clinical trials with respect to their headache products could negatively impact the perception of us or our gammaCore therapy.

In addition, perception by physicians, payers or patients that a competitor’s product is superior to our gammaCore therapy or offers comparable benefits at a lower cost or lower incidence of undesirable side effects as compared against our gammaCore therapy, among other perception-driven outcomes in the market following competitors’ completion of their clinical trials, could have a material adverse effect on us.

Traditional products used to treat CH and migraine have been available for decades, while our gammaCore therapy has only been commercially available in Europe for several years, and for approximately three years in the United States, and, as a result, we have a limited track record compared to our competitors.

In addition, perception by physicians, payors, or patients that a competitor’s product is superior to our gammaCore therapy or offers comparable benefits at a lower cost or lower incidence of undesirable side effects as compared against our gammaCore therapy, among other perception-driven outcomes in the market following competitors’ completion of their clinical trials, could have a material adverse effect on us.

Given our nascent entry into the diverse human performance and wellness market, we expect that the barriers of entry and competitive effects may be significant factors impacting our success in the research and development, advertising, marketing, promotion, distribution, and sale of our general wellness products, Truvaga and TAC-STIM, respectively.

We expect to continue to perform, or engage with consultants to perform, where appropriate, extensive market research and other economic analysis to appropriately understand market participants’ product offerings and contextualize various empirical and conjectural properties of market structure, including pricing patterns, competitive or anticompetitive tendencies, collaborative ventures and synergies, and cross-market product substitutions and other consumer behavior inferences, among other factors.

To effectively compete with more established marker participants in the wellness industry, we may need to expand our product offerings and distribution channels, which, in the interim, could increase our research and development costs and decrease our operating margins, thereby adversely impacting our business, financial condition, and results of operations.

Some of the world’s largest technology companies that have not historically operated in the wellness and/or medical device spaces, such as Alphabet Inc., Amazon.com, Inc., Apple Inc., Samsung Electronics Co., Ltd., and others have notably developed or may in the future develop products and technologies that may compete with our current or future products and technologies.

Such companies have substantially greater capital, research and development, and sales resources than we have.

Future research or investigative reports or publicity that is perceived as unfavorable or that question certain claims associated with or methods underlying our general wellness products could result in a decline in our revenues.

Because of our final dependence on consumer perceptions, adverse publicity associated with illness or other undesirable effects resulting from the use of our products or similar products by competitors, whether or not accurate, could also damage customer confidence in our existing and any future general wellness products and result in a decline in revenues.

Adverse publicity could arise even if the unfavorable effects associated with our general wellness products resulted from the user’s failure to use such products appropriately.

Traditional products used to treat CH and migraine have been available for decades, while our gammaCore therapy has only been commercially available in Europe for several years, and for approximately four years in the United States, and, as a result, we have a limited track record compared to our competitors.

Traditional products used to treat CH and migraine have been commercially available for decades, while we only began commercializing our gammaCore therapy in Europe to treat CH and migraine several years ago and within the past four years in the United States.

Because we have a limited commercial track record compared to our competitors, and our gammaCore therapy generally has been utilized by patients for less time than other headache therapies, physicians and patients may be slower to adopt or recommend our gammaCore therapy.

Further, while we believe our international commercial experience and our clinical trials support the safety and effectiveness of our gammaCore therapy for the acute treatment of eCH, prevention of CH and migraine headache, future studies or patient experience over a longer period of time may indicate that treatment with gammaCore is less attractive than treatment with competitive products or that our gammaCore therapy causes unexpected or serious complications or other unforeseen negative effects.

In addition, while we believe our international commercial experience and our clinical trials support the safety and effectiveness of our gammaCore therapy for the acute treatment of eCH and prevention of CH and migraine headache, future studies or patient experience over a longer period of time may indicate that treatment with gammaCore is less attractive than treatment with competitive products, or that our gammaCore therapy causes unexpected or serious complications or other unforeseen negative effects.

Such results would likely slow the adoption of our gammaCore therapy and significantly reduce our sales, which would harm our business and adversely affect our results of operations.

6 unchanged sentences

Our international operations subject us to certain operating and compliance risks, which could adversely impact our results of operations and financial condition.

Sales of gammaCore outside of the United States represents a substantial portion of our net sales.

Sales of gammaCore outside of the United States represent a substantial portion of our net sales.

In 2012, commercial operations began in the United Kingdom and Germany, and we now sell gammaCore throughout Europe from our UK based subsidiary and via two distribution partners based in Belgium and Lithuania.

Outside of Europe, we have a network of 8 distribution partners tasked with selling gammaCore to patients in Canada, Australia, New Zealand, United Arab Emirates, Bahrain, Oman, Saudi Arabia, Cyprus, China, Taiwan, Indonesia, Malaysia and Singapore.

The sale and shipment of gammaCore across international borders as well as the purchase of components from international sources, subjects us to US and foreign governmental trade and customs regulations and laws.

The sale and shipment of gammaCore across international borders and the purchase of components from international sources subjects us to U.S.

and foreign governmental trade and customs regulations and laws.

Compliance with these regulations and laws is costly and exposes us to penalties for non-compliance.

Other laws and regulations that can significantly impact us include various anti-bribery laws, including the U.S.

Foreign Corrupt Practices Act, as well as export controls laws.

Any failure to comply with applicable legal and regulatory obligations could impact us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments, restrictions on certain business activities and exclusion or debarment from government contracting.

The administration of President Biden may support potential trade proposals (including import tariffs and other tariffs on China), modifications to international trade policy, and other changes that may affect U.S.

Foreign Corrupt Practices Act of 1977 (or FCPA), as amended, and export controls laws.

The failure to comply with U.S.

Foreign Corrupt Practices Act and similar worldwide anti-bribery laws in non-U.S.

jurisdictions could materially adversely affect our business and result in civil and/or criminal sanctions.

With regard to FCPA, the UK Bribery Act, and similar worldwide anti-bribery laws in non-U.S.

jurisdictions, such laws generally prohibit companies and their intermediaries from making improper payments to non-U.S.

government officials and, in some instances, other persons for the purpose of obtaining or retaining business.

Because of the predominance of government-sponsored healthcare systems around the world, most of our customer relationships outside of the United States are or will be with governmental entities and are therefore potentially subject to such anti-bribery laws.

Notably, global enforcement of anti-corruption and anti-bribery laws, which are typically interpreted broadly to prohibit generally companies, their employees, and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector, has increased substantially in recent years, which has in part led to more frequent voluntary self-disclosures by companies, aggressive investigations and enforcement proceedings by U.S.

and foreign governmental agencies, and assessment of significant fines and penalties against companies and individuals in various cases.

Thus, our international operations create the risk of unauthorized payments or offers of payments by one of our employees, consultants, sales agents, or distributors because these parties are not always subject to our direct oversight and control.

As we increase our international sales and direct greater levels of business and sales toward the public sector, we may engage with business partners and third-party intermediaries to market our products and to obtain necessary permits, licenses, and other regulatory approvals.

In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities.

[ It is therefore our policy to implement safeguards to educate our employees and agents on these legal requirements and discourage improper practices.

] However, our existing safeguards and any future improvements may prove to be less than effective, and our employees, contractors or consultants, partners, sales agents, or distributors may engage in conduct for which we might be held ultimately responsible as principal.

Specifically, we can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors or consultants, partners, and sales agents, or distributors, even if we do not explicitly authorize such activities.

Detecting, investigating, and resolving actual or alleged violations of anti-corruption and other laws can require a significant diversion of time, resources, and attention from our business.

In addition, government agencies may seek to hold us liable for successor liability for anti-corruption law violations committed by any companies in which we invest or that we acquire in the future.

Any alleged or actual violations of these regulations may subject us to expensive government scrutiny, severe criminal or civil sanctions and other liabilities, including exclusion from government contracting, reputational harm, adverse media coverage, and such alleged or actual violations could disrupt our business and result in a material adverse effect on our business, financial condition, and results of operations.

As we expand contract relations internationally, our risks under these laws may increase.

In general, any failure to comply with the applicable legal and regulatory obligations could impact us in a variety of ways that include, but are not limited to, significant criminal, civil, and administrative penalties, including imprisonment of individuals, fines, and penalties, denial of export privileges, seizure of shipments, restrictions on certain business activities, and exclusion or debarment from government contracting.

administration of President Biden may support potential trade proposals (including import tariffs and other tariffs on China), modifications to international trade policy, and other changes that may affect U.S.

trade relations with other countries.

We source a significant amount of the components used in gammaCore from Chinese sources, so any tariffs or other trade restrictions impacting the import of these components from China could have a material adverse impact on us.

In addition, the COVID-19 pandemic has caused many countries to restrict certain manufacturing activities and has severely disrupted the movement of certain goods.

In addition, the ongoing COVID- 19 pandemic has caused many countries to restrict certain manufacturing activities and has severely disrupted the movement of certain goods.

As a result, our distributors, agents, and suppliers may not have the materials, capacity, or capability to operate as our business ordinarily requires.

6 unchanged sentences

third-party reimbursement policies that may require some of the patients who receive our products to directly absorb medical costs, or that may necessitate the reduction of the selling prices of gammaCore;

competitive disadvantage to competition with established business and customer relationships;

competitive disadvantage to firms with established business and customer relationships;

foreign currency exchange rate fluctuations;

18 unchanged sentences

We have international operations and, as a result, an increase in the value of the U.S.

dollar relative to foreign currencies could require us to reduce our selling price or risk making our products less competitive in international markets, or our costs could increase.

dollar relative to foreign currencies could require us to reduce our selling price or risk making our products less competitive in international markets.

Our general costs of doing business could increase.

Also, if our international sales increase, we may enter into a greater number of transactions denominated in non-U.S.

dollars, which could expose us to increased foreign currency risks, including currency fluctuations and exchange rate risks.

dollars, which could expose us to increased foreign currency risks, including currency fluctuations and exchange rate risks and indirect effects from net capital flows related risks, such as capital flight and any cross-border capital controls.

We do not currently engage in any hedging transactions.

If we are unable to address these risks and challenges effectively, our international operations may not be successful, and our business could be harmed.

We may not be able to establish or strengthen our brand.

We believe that establishing and strengthening the electroCore and gammaCore brands is critical to achieving widespread acceptance of our gammaCore therapy to treat eCH, prevent CH, prevent and treat migraine, and treat acute asthma exacerbations in known or suspected COVID-19 patients and consumers, particularly because of the highly competitive nature of the market for headache therapies.

We may not be able to establish or strengthen our brands.

We believe that establishing and strengthening the electroCore, gammaCore, Truvaga, and TAC-STIM brands are critical to achieving widespread acceptance of our nVNS platform technology.

We believe that brand awareness considerations are particularly significant in light of the highly competitive nature of the burgeoning markets for headache therapies and wellness products.

Promoting and positioning our brand will depend largely on the success of our marketing efforts, our direct-to-consumer initiatives, and our ability to provide physicians, patients, and consumers with a reliable product.

Given the established nature of our competitors, our lack of commercialization in the United States, and our lack of experience in the direct-to-consumer channels, it is likely that our future marketing efforts will require us to incur significant additional expenses.

These brand promotion activities may not yield increased sales and, even if they do, any sales increases may not offset the expenses we incur to promote our brand.

If we fail to successfully promote, expand, and maintain our brand, or if we incur substantial expenses in an unsuccessful attempt to promote, expand, and maintain our brand, our gammaCore therapy may not be accepted by physicians and consumers, which would adversely affect our business, results of operations and financial condition.

Given the established nature of our competitors, our relative lack of commercialization in the United States and our lack of experience in the direct-to-consumer channels, it is likely that our future marketing efforts will require us to incur significant additional expenses.

These brand promotion activities may not yield increased sales and, even if they do, any sales increases may not offset the expenses we incur to promote our brands.

If we fail to successfully promote, expand, and maintain our brands, or if we incur substantial expenses in an unsuccessful attempt to promote, expand, and maintain our brands, nVNS platform technology may not be accepted by physicians and consumers, which would adversely affect our business, results of operations, and financial condition.

We may face product liability claims that could result in costly litigation and significant liabilities.

Manufacturing and marketing of gammaCore, and clinical testing of our gammaCore therapy may expose us to individual product liability claims, class action lawsuits or actions, and other individual or mass tort claims.

Although we have, and intend to maintain, liability insurance, the insurers may deny our claims, coverage limits of our insurance policies may not be adequate and one or more successful claims brought against us may have a material adverse effect on our business and results of operations.

These risks are heightened in the event any product recalls take place as a result of any product design defect or defect in product warnings or labeling.

Product liability claims could negatively affect our reputation, our continued product sales and our ability to obtain and maintain regulatory clearance or approval for our products.

Manufacturing and marketing of our nVNS platform technology and clinical testing of our gammaCore therapy may expose us to individual product liability claims, class action lawsuits or actions, and other individual or mass tort claims.

Regardless of the merits or eventual outcome, liability claims may result in any of the following:

decreased demand for our products or products that we may develop in the future;

• decline in price charged for our products;

• loss of revenue;

• injury to our reputation;

• initiation of investigations by regulators;

costs to defend the related litigation;

a diversion of management’s time and our resources;

• substantial monetary awards to trial participants;

• product recalls or withdrawals;

labeling, packaging, marketing or promotional modifications or restrictions;

• exhaustion of any available insurance and our capital resources;

the inability to commercialize our existing or future products;

a decline in our stock price.

Although we have, and intend to maintain, liability insurance, the insurers may deny our claims, and coverage limits of our insurance policies may not be adequate.

Specifically, we may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations, or that are not covered by the terms and conditions of our insurance policies, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

Even if our agreements entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

These risks are particularly heightened in the event any product recalls take place as a result of any product design defect or defect in product warnings or labeling.

One or more successful claims brought against us may have a material adverse effect on our business and results of operations.

Even successful defense would require significant financial and management resources.

Our operating results and profitability may be adversely affected by increases in reserves for product returns, doubtful accounts receivable, and inventory.

Our net sales and profitability are affected by changes in reserves to account for product returns, doubtful account receivable and inventory.

Significant management judgment must be used, and estimates must be made in connection with establishing these reserves, and any increase thereto could adversely affect our reported financial results by reducing our net revenues and/or profitability for the reporting period.

If the financial condition of our customers were able to deteriorate resulting in an impairment of their ability to make payments or if third-party payers were to deny claims, additional provisions for doubtful accounts may be required.

Our net sales and profitability are affected by changes in reserves to account for product returns, doubtful accounts receivable, and inventory.

Significant management judgment must be used, and estimates must be made in relation to establishing the foregoing reserves, and any increase thereto could adversely affect our reported financial results by reducing our net revenues and/or profitability for the given reporting period.

If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, or if third-party payors were to deny claims, additional provisions for doubtful accounts may be required.

We permit the return of damaged or defective products and accept limited amounts of product returns in certain instances.

11 unchanged sentences

Further, our employees’ ability to exercise those options and sell their stock in a public market may result in a higher-than-normal turnover rate.

In addition, our financial condition may preclude us from giving additional cash compensation to mitigate this risk.

In addition, our financial condition may preclude us from giving additional cash compensation to militate against this risk.

Many executive officers and employees in the pharmaceutical and medical device industries are subject to strict non-compete or confidentiality agreements with their employers, which may include our main competitors.

1 unchanged sentence

Our competitors may allege breaches of, and seek to enforce, such non-compete agreements or initiate litigation based on such confidentiality agreements.

Such litigation, whether or not meritorious, may impede our ability to attract or use executive officers and other key employees who have been employed by our competitors and may result in intellectual property claims against us.

It is likely that we will experience similar aggressive lawsuit tactics by our competitors as they seek to protect their market position, particularly as we prepare to expand in new or existing markets.

This litigation, whether or not meritorious, may impede our ability to attract or use executive officers and other key employees who have been employed by our competitors and may result in intellectual property claims against us.

It is likely that we will experience similar aggressive lawsuit tactics by our competitors while they seek to protect their market position, particularly as we prepare to expand in new or existing markets.

Our future success depends on our leadership development and succession planning.

1 unchanged sentence

Failure to ensure effective transfer of knowledge and smooth transitions involving key employees and senior executives could hinder our strategic planning and execution.

Our ability to execute our business strategies, ensure a cohesive management team, and attract and retain key executives may be adversely affected by the uncertainty that could be associated with the needing to transition to a new senior leadership.

Our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs, and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

We are exposed to the risk that our employees, independent contractors, independent contractor influences, other content creators, consultants, commercial collaborators, principal investigators, CROs, and vendors may engage in fraudulent conduct or other illegal activity.

Misconduct by these parties could include intentional, reckless or negligent conduct or unauthorized activities that violates (1) the laws and regulations of the FDA, FTC, and other similar regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities, (2) manufacturing standards, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad, such as the General Data Protection Regulation in the European Union, and (4) laws that require the true, complete and accurate reporting of financial information or data.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.

Misconduct by these parties could also involve the improper use of individually identifiable information, including information obtained in the course of clinical trials, creating fraudulent data in our preclinical studies or clinical trials or illegal misappropriation of product candidates, which could result in regulatory sanctions and serious harm to our reputation.

Possible misconduct by these parties, including intentional, reckless, or negligent conduct or otherwise unauthorized activities, that violates the (1) laws and regulations of the FDA, FTC, and other similar regulatory authorities, including those laws requiring the reporting of true, complete, and accurate information to such authorities, (2) manufacturing standards, (3) federal and state data privacy, security, fraud, and abuse and other healthcare laws and regulations in the United States and abroad, such as the General Data Protection Regulation in the European Union, and (4) laws that require the true, complete, and accurate reporting of financial information or data.

In particular, sales, advertising and marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing, and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, advertising, marketing and promotion, sales commission, customer incentive programs, and other business arrangements.

Misconduct by the foregoing parties could also involve the improper use of individually identifiable information, including information obtained in the course of clinical trials, creation of fraudulent data in our preclinical studies or clinical trials, or illegal misappropriation of product candidates, which could result in regulatory sanctions and serious harm to our reputation.

Although we have adopted a code of business conduct and ethics, it is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

1 unchanged sentence

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative penalties, including damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, contractual damages, reputational harm, and the curtailment or restructuring of our operations.

Regarding advertising risk in the United States in particular, the FTC and states’ attorneys general are primarily responsible for enforcing the consumer protection laws by, among other things, investigating and initiating enforcement actions against business practices they deem to be deceptive or fraudulent under applicable laws.

We are thus subject to consumer protection laws that regulate our marketing practices and prohibit unfair or deceptive acts or practices.

Our actual or perceived failure to comply with such obligations could harm our business, and changes in such regulations or laws could require us to modify our products or marketing or advertising efforts.

In connection with the marketing or advertisement of our products, we could be the target of claims relating to false, misleading, deceptive or otherwise noncompliant advertising or marketing practices, including under the auspices of the FTC and state consumer protection statutes.

If we rely on third parties to provide any marketing and advertising of our products, we could be liable for, or face reputational harm as a result of, their marketing practices if, for example, they fail to comply with applicable statutory and regulatory requirements.

We cannot ensure that all marketing materials currently used for our products comply with applicable laws, rules, and regulations, including bans on false and misleading product related claims.

Any failure to comply with these restrictions could subject us to assertions of claims of false advertising and misrepresentation, which potentially bring forth significant financial penalties, costly mandatory product recalls, or relabeling requirements, any of which could have a material adverse effect on our results of operations and financial condition.

If we are found to have breached any consumer protection, advertising, unfair competition or other laws or regulations, we may be subject to enforcement actions that generally require us to amend our marketing and business practices in a manner that may negatively impact us.

This could also result in litigation, fines, penalties, and adverse publicity that could cause reputational harm and loss of customer trust, which could have a material adverse effect on our business, financial condition and results of operations.

The increasing use of social media could give rise to liability.

Social media, including Instagram, Snapchat, TikTok, Facebook and Twitter, is increasingly being used to communicate about our product, clinical development programs, and the conditions our gammaCore therapy is being developed to treat and we are engaging in what we believe is appropriate social media usage in connection with our commercialization efforts for indications for which our therapy has been approved.

Social media, including Instagram, Snapchat, TikTok, Facebook, and Twitter, are increasingly being used to communicate about our products, clinical development programs, and, at present, the conditions our gammaCore therapy is being developed to treat.

We are engaging in what we believe is appropriate social media usage in connection with our commercialization efforts for indications for which our therapy has been approved.

We intend to do the same for any future indications or products, if approved.

Social media practices in the biopharmaceutical industry continue to evolve and regulations and regulatory guidance relating to such use are evolving and not always clear.

This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business, resulting in potential regulatory actions against us, along with the potential for litigation related to off-label marketing or other prohibited activities.

Social media practices in the medical device and wellness industries continue to evolve, and regulations and regulatory guidance relating to such practices are mutable and unclear at times.

This evolution creates uncertainty and elevated risk of non-compliance with regulations applicable to our business, which can result in potential regulatory actions against us or potential litigation related to “off-label” marketing or other prohibited activities.

For example, for our clinical-stage candidates, patients and consumers may use social media channels to comment on their experience in an ongoing blinded clinical study or to report an alleged adverse event.

When such disclosures occur, there is a risk that study enrollment may be adversely impacted, we fail to monitor and comply with applicable adverse event reporting obligations or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our investigational products.

When such disclosures occur, there is a risk that study enrollment may be adversely impacted, or we fail to monitor and comply with applicable adverse event reporting obligations, or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our investigational products.

There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any online platform, including a blog on the Internet, or a post on a website, that can be distributed rapidly and could negatively harm our reputation.

In addition, our employees may knowingly or inadvertently make use of social media in ways that may not comply with our company policies or other legal or contractual requirements, which may give rise to liability, lead to the loss of trade secrets or other intellectual property, or result in public exposure of personal information of our employees, clinical trial participants, customers, consumers, and others.

If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business.

Our efforts to promote our products via marketing and social media initiatives may subject us in the future to additional scrutiny of our practices of effective communication of risk information, benefits, or claims, by the FDA, FTC, or both.

If any of the aforesaid events were to occur, or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or cause other injury to our business and stockholders.

Risks Related to COVID-19

The ongoing coronavirus pandemic could have a significant negative impact on our business, revenues, financial condition, results of operations, and cash flow, and other epidemics or outbreaks of infectious diseases may have a similar impact.

The ongoing coronavirus pandemic has impacted, and may continue to impact, our headquarters, manufacturing, and warehousing and ecommerce facilities, as well as those of our third-party vendors, including through the effects of facility closures, employee furloughs, reductions in operating hours, staggered shifts and other social distancing efforts, labor shortages, decreased productivity, and unavailability of materials or components.

The ongoing coronavirus pandemic may also impact our ability to sell our product, ship our product on a timely basis, and may increase our costs.

The spread of coronavirus caused us to modify certain of our business practices (including social distancing practices, requiring non-essential production related team members to work remotely where possible, restricting business travel, cancelling certain events, and limiting visitor access to our facilities), and we may relax, extend, modify, or take further actions that may be required by government authorities or that we determine are necessary or advisable.

In addition, work-from-home and related business practice modifications present significant challenges to maintaining our corporate culture, including employee engagement and productivity, both during the ongoing pandemic crisis and as we make additional adjustments in the eventual transition from it.

Implementing new business practices to protect employees, vendors, and other parties with whom we interact may result in increased costs.

Furthermore, even if we follow what we believe to be best practices, there can be no assurance that our measures will prevent the transmission of COVID-19 between employees.

Any incidents of actual or perceived transmission may expose us to liability claims, adversely impact employee productivity and morale, and result in negative publicity and reputational harm.

Officially imposed quarantines and self-quarantines could also interfere with patients’ ability to see a health care provider and obtain our gammaCore therapy.

the development, rollout, and availability of effective treatments and vaccines;

the imposition of protective public safety measures;

vaccine mandates;

the transmissibility and effects of new coronavirus variants;

and how quickly and to what extent normal economic and operating conditions resume, if at all.

These uncertainties may result in delays or modifications to our plans, initiatives and results.

For the reasons set forth above and any other reasons that may come to light as the coronavirus pandemic continues and associated protective or preventative measures transpire, we are unable to reasonably estimate coronavirus’ impact to our business, revenues, financial condition, and results of operations.

We are similarly unable to predict the degree to which the ongoing pandemic impacts our customers, suppliers, vendors, and other partners, and their financial conditions, but a material effect on any of these parties could also adversely affect us.

The impact of coronavirus could also exacerbate other risks discussed below, which could in turn have a material adverse effect on us.

Developments related to coronavirus have been rapidly changing, and additional impacts and risks may arise that we are not aware of or able to appropriately respond to currently.

Risk Related to our Dependence on Third Parties

12 unchanged sentences

In Europe, we rely on a single third-party distributor to effectively distribute the majority of our products.

We depend in part on a single third-party distributor for the warehousing, programming and shipment of our products in certain territories in Europe.

We depend on this distributor’s efforts, yet we are unable to control its efforts completely.

We depend in part on a single third-party distributor for the warehousing and shipment of our products in certain territories in Europe.

We depend on this distributor’s efforts;

however, we are unable to control its efforts completely.

This distributor typically performs the same services for a variety of other non-competing products that may limit the resources it dedicates to our gammaCore therapy.

If our distributor fails to effectively distribute gammaCore in full compliance with applicable laws, our operating results and business may suffer.

Recruiting and retaining qualified third-party distributors and training them in our technology and product offerings requires significant time and resources.

Recruiting and retaining qualified third-party distributors and training them in our technology and product offerings require significant time and resources.

To develop and expand our distribution, we must continue to scale and improve our processes and procedures that support our distributors.

In addition, our ability to recruit distributors as well as their effectiveness may be adversely affected by the armed conflict between Ukraine and Russia.

Further, if our relationship with a successful distributor terminates, we may be unable to replace that distributor without disruption to our business.

In addition, our ability to recruit distributors and their effectiveness may be adversely affected by the armed conflict between Ukraine and Russia.

Furthermore, if our relationship with a successful distributor terminates, we may be unable to replace that distributor without disruption to our business.

If we fail to maintain positive relationships with our distributor, fail to develop new relationships with other distributors (including in new markets), fail to manage, train, or incentivize our existing distributor effectively, or fail to strike agreements with attractive terms, or if our distributor is not successful in its businesses, our revenue may decrease, and our operating results, reputation, and business may be harmed.

We rely upon specialty pharmacies to distribute some of our products in the United States.

We depend on specialty pharmacies to distribute our products but are unable to control their performance.

These specialty pharmacies may distribute a variety of other specialty pharmaceutical products that may limit the resources dedicated to the distribution of our products.

In addition, we are unable to ensure that these specialty pharmacies will comply with all applicable laws related to the distribution of our products.

If they fail to distribute our products in compliance with applicable laws, our operating results and business may suffer.

Recruiting, training, and retaining specialty pharmacies in the distribution of our proprietary product offerings requires significant time and resources.

In addition, we previously used a third-party distributor and its affiliate to provide pharmaceutical patient hub services, including patient support and training.

This hub was electronically integrated with our proprietary data warehouse system and web portal.

Our agreement with this third-party distributor expired in the second quarter of 2020 and we have transitioned to using specialty pharmacies for select services.

This may inhibit our ability to gather data directly into our proprietary data warehouse system and web portal, which may result in disruptions in service for patients that are prescribed our therapy and cause them to seek alternative therapy.

Specialty pharmacies also may not pay us on time or at all due to disputes, financial issues or bankruptcy events.

Any such payment issues may materially affect our operating results until we are able to resolve the issues or find a sufficient replacement.

We offer health care provider consults for gammaCore Sapphire in the United States and the United Kingdom and rely upon a third-party telehealth platform provider to do so.

In the future, we may need to engage other telehealth platform providers for sales of our other products.

We use telehealth providers for gammaCore Sapphire in the United States and the United Kingdom and their performance is not fully within our control.

We are unable to ensure that the telehealth providers will comply with applicable laws, and its failure to do so could have an adverse effect on our operating results and business.

Additionally, recruiting, training and retaining telehealth platform providers requires significant time and resources.

We may need to establish additional relationships with telehealth platform providers for the sales of our other products, but there can be no assurance that we will be able to do so at all or on terms favorable to us.

In the United States we are dependent on a third-party platform to provide patients with an end-to-end experience that would result in a prescription and purchase of gammaCore therapy.

In the United States, we have contracted with Vytal, LLC to provide an end-to-end e-commerce solution that will enable patients to obtain a prescription and purchase gammaCore directly from an online store.

The e-commerce and telehealth platform for gammaCore Sapphire and its performance is not fully within our control.

We are unable to ensure that the platform will operate consistently or that they will comply with applicable laws, including but not limited to privacy and patient information, and its failure to do so could have an adverse effect on our operating results and business.

Additionally, recruiting, training and retaining telehealth module providers requires significant time and resources which may alter the experience of patients in the online store.

We may need to establish additional relationships with e-commerce and/or telehealth platform providers for the sales of our other products, but there can be no assurance that we will be able to do so at all or on terms favorable to us.

Vytal, LLC operates its own dispense and will transact as a stocking distributor.

We are unable to ensure they will comply with applicable laws and its failure to do so could have an adverse effect on our operating results and business.

As a stocking distributor, we are unable to ensure they will have the financial resources to hold adequate inventory levels to support the demand and any shortage of supply may have an impact on our business and financial results.

Our status as a federal contractor subjects us to a wide variety of regulatory compliance, pricing, and contract-based requirements.

3 unchanged sentences

Our status as a contractor on FSS means that we are obligated to comply with a variety of federal procurement laws, regulations, and contract terms that require commercial price disclosures, commercial-to-federal price indexing, and compliance with various federal programs.

Furthermore, as a federal contractor, we are also subject to contractual remedies and potential administrative, civil, and criminal damages and penalties for noncompliance with contract terms, over billing, or misconduct.

Furthermore, as a federal contractor, we are also subject to contractual remedies and potential administrative, civil, and criminal damages and penalties for non-compliance with contract terms, over billing, or misconduct.

In addition to the above considerations, we have reason to believe that our prospective sales of human performance and general wellness products to the U.S.

Armed Forces could involve various significant compliance requirements as regards applicable laws and regulations and certain contract law covenants and conditions that collectively regulate our affairs in the ordinary course of business as a result of our status as a federal contractor.

The recent Biden administration's executive order requiring all on-site and remote federal employees, contractors, and sub-contractors to be vaccinated against COVID- 19 or receive an approved medical or religious exemption by December 8, 2021 may apply to us because of our Federal Supply Schedule Medical Equipment and Supply contract.

Failure to comply with the executive order could lead to loss of the contract, which could have a material adverse effect on our business, revenues, financial condition, and result of operations.

3 unchanged sentences

Additionally, failure to comply could result in us being excluded from the opportunity to renew existing federal contracts or to bid on federal future contracts for a period of time lasting up to several years.

Our qualifying contract on the FSS is scheduled to expire on January 15, 2024.

We intend to request an extension of the FSS from the United States Department of Veterans Affair, but there is no assurance the FSS contract will be renewed, if at all on terms favorable to us.

Any of these contingencies could have a material adverse effect on our business, financial condition, and results of operations.

Our potential revenue in the United Kingdom is substantially dependent on government funding arrangements and changes in such government policy could cause material harm to our business.

Our potential revenue in the United Kingdom is substantially dependent on government funding arrangements, and changes in governmental policy for such arrangements could cause material harm to our business.

Effective April 1, 2021, gammaCore Sapphire was included in a new long-term reimbursement policy.

The MTFM policy, supports the use of NICE-approved, clinically effective and cost-saving medical devices, diagnostics and digital technologies that will improve patient outcomes.

The MTFM policy supports the use of NICE-approved, clinically effective and cost-saving medical devices, diagnostics, and digital technologies that will improve patient health.

In December 2019, NICE published a Medical Technology Guidance document recommending the use of gammaCore for CH within the NHS.

In January 2021, gammaCore was recommended for use in treatment of CH in NHS Scotland.

This approval was an adoption of the NICE recommendation.

Recently, we have announced agreements with new distributors to make gammaCore Sapphire available in several countries beyond the U.S.

and United Kingdom.

The cost of compliance with applicable UK laws and regulations could negatively harm us and our business.

Additionally, the government funding arrangements provided by the NHS and NICE could be withdrawn if we do not comply with the terms and conditions of such arrangements, or if the programs are not extended or curtailed.

Any of these contingencies could have an adverse effect on our potential UK revenue.

In 2023, we expect NICE to review the guidance document, and any changes in recommendation or pricing may adversely impact our ability to work with NHS England on the MTFM program , which could have an adverse impact on our business in the United Kingdom.

We rely on third parties to conduct and support clinical trials and investigator - initiated trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

4 unchanged sentences

Our reliance on third parties for clinical development activities reduces our control over these activities but does not relieve us of our responsibilities.

Furthermore, some of the sites for our investigator-initiated trials are outside the United States.

Furthermore, some of the sites for our IIT's are outside the United States.

The performance of these sites may be adversely affected by various issues, including less advanced medical infrastructure, lack of familiarity with conducting clinical trials in accordance with U.S.

6 unchanged sentences

As a result, we cannot predict how successful our IITs will be at enrolling patients.

In particular, enrollment in our IITs for nVNS stimulation in COVID-19 patients in the United States have been slower than expected.

In particular, enrollment in our IITs for nVNS stimulation in COVID-19 patients in the United States has been slower than expected.

We also may rely on other third parties to store and distribute supplies for clinical trials.

16 unchanged sentences

If we are not able to establish or maintain collaborations, we may have to alter some of our future development, regulatory clearance, and commercialization plans.

Our product development programs, regulatory clearance and the potential commercialization of our gammaCore therapy will require substantial additional capital to fund expenses.

For some of our product candidates, we may decide to collaborate with pharmaceutical and medical device companies for the future development, regulatory clearance and potential commercialization of those product candidates.

Our product development programs, regulatory clearance, and potential commercialization of our nVNS platform technology will require substantial additional capital to fund expenses.

For some of our product candidates, we may decide to collaborate with pharmaceutical and medical device or consumer electronics companies for the future development, regulatory clearance, and potential commercialization of those product candidates.

Furthermore, we may find that our programs require the use of proprietary rights held by third parties, and the growth of our business may depend in part on our ability to acquire, in-license, or use these proprietary rights.

3 unchanged sentences

Whether we reach a definitive agreement for a collaboration will depend upon, among other things, our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration, and the proposed collaborator’s evaluation of a number of factors.

Those factors may include the design or results of clinical trials, the likelihood of clearance or approval by the FDA, compliance with the Essential Requirements of the EU Medical Devices Directive and from May 26, 2020, the General Safety and Performance Requirements of the EU Medical Devices Regulation or similar foreign regulations, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally.

The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate.

We may also be restricted under existing license agreements from entering into agreements on certain terms with potential collaborators.

Collaborations are complex and time-consuming to negotiate and document.

In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.

We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all.

Even if we are able to obtain a license to intellectual property of interest, we may not be able to secure exclusive rights, in which case others could use the same rights and compete with us.

If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to curtail the development of such product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.

If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms, or at all.

If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.

We, or third-party manufacturers on whom we rely, may be unable to successfully sustain and to further scale-up manufacturing of our gammaCore therapy or its component parts in sufficient quality and quantity, which would delay or prevent us from developing and commercializing any approved products.

In order to conduct clinical trials of our gammaCore therapy and continue to commercialize approved products, we, or our manufacturers, will need to manufacture products in large quantities.

We, or our manufacturers, may be unable to successfully sustain, or increase manufacturing capacity in a timely or cost-effective manner, or at all.

We, or third-party manufacturers on whom we rely, may be unable to successfully sustain and to further scale-up manufacturing of our nVNS technology platform or its component parts in sufficient quality and quantity, which would delay or prevent us from developing and commercializing any approved products.

In order to commercialize products, we, or our manufacturers, will need to manufacture products in large quantities.

There are technical challenges to increasing manufacturing capacity, including equipment design, automation, validation and installation, contractor issues and delays, licensing and permitting delays or rejections, materials procurement, manufacturing site expansion, problems with production yields, and quality control and assurance.

Continuing to develop or enhance commercial-scale manufacturing facilities could require the investment of substantial additional funds and the hiring and retention of additional management, quality assurance, quality control, and technical personnel who have the necessary manufacturing experience.

The scaling of manufacturing capacity is subject to numerous risks and uncertainties and may lead to variability in product quality or reliability and increased construction timelines and resources required to design, install, and maintain manufacturing equipment, among others, all of which can lead to unexpected delays in manufacturing output.

In addition, any changes to manufacturing processes may trigger the need for submissions or notifications to, and in some cases advance approval from, the FDA or other regulatory authorities because of the potential impact of changes on previously cleared, approved, and/or authorized devices.

Our facilities are subject to inspections by the FDA and corresponding state agencies on an ongoing basis, and thus, we must comply with Good Manufacturing Practices, which generally require us to maintain compliant processes, controls, and record keeping, and to comply with FDA Quality System Regulations (or QSR), and applicable state-law requirements.

We may be unable to adequately maintain, develop, and expand our manufacturing process and operations or maintain compliance with FDA and state agency requirements, and manufacturing issues could impact our cleared and approved products.

If we are unable to manufacture a sufficient supply of our current products or any future products for which we may receive approval or clearance, maintain control over expenses or otherwise adapt to anticipated growth, or if we underestimate growth, we may not have the capability to satisfy market demand, contractual obligations, and our business will suffer.

In light of the above considerations, we, or our manufacturers, may be unable to successfully sustain, or increase manufacturing capacity in a timely or cost-effective manner, or at all.

In addition, quality issues may arise during further scale-up activities.

If we, or any of our manufacturers, are unable to successfully sustain, or further scale-up manufacturing in sufficient quality and quantity, the development, testing, and clinical trials of our gammaCore therapy may be delayed or infeasible, and regulatory clearance, approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

If we, or any of our manufacturers, are unable to successfully sustain, or further scale-up manufacturing in sufficient quality and quantity, the development, testing, and clinical trials, if appropriate, of our nVNS technology platform may be delayed or infeasible, and regulatory clearance, approval, or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

If we are unable to obtain or maintain third-party manufacturing for commercial supply of our product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our gammaCore therapy successfully.

We are required to maintain high levels of inventory with our third-party manufacturers, due to lead times with single-source consumer electronic components vendors, which could consume a significant amount of our resources, reduce our cash flows and lead to inventory impairment charges.

Our gammaCore therapy consists of a substantial number of individual components.

We are required to maintain high levels of inventory due to lead times with single-source consumer electronic components vendors, which could consume a significant amount of our resources, reduce our cash flows, and lead to inventory impairment charges.

Our nVNS technology platform consists of a substantial number of individual components.

In order to market and sell effectively, we often must maintain high levels of inventory of the product and its components.

The manufacturing process requires lengthy lead times during which electronic components of our gammaCore therapy may become obsolete, and we may over- or under-estimate the amount needed of a given component, in which case we may expend extra resources or be constrained in the amount of end product that we can produce.

The manufacturing process requires lengthy lead times during which electronic components of our nVNS technology platform may become obsolete, and we may over- or under-estimate the amount needed of a given component, in which case we may expend extra resources or be constrained in the amount of end product that we can produce.

As compared to direct manufacturers, our dependence on third-party manufacturers exposes us to greater lead times, increasing our risk of adverse financial impact of inventory obsolescence comparatively.

In addition, as of December 31, 2022, we had approximately $4.2 million of inventory.

Our inventory significantly exceeds current demand for the gammaCore therapy, which also could result in an increased risk of adverse financial impact from inventory obsolescence.

Our inventory significantly exceeds current demand for the nVNS technology platform, which also could result in an increased risk of adverse financial impact from inventory obsolescence.

There are, however, risks that growth in our business, including our recently launched non-prescription, human performance and wellness offerings, may result in demand that could outstrip our current inventory, in which case we would be subject to various supply chain, manufacturing, and operational risks.

If not mitigated fully, this could negatively impact our ability to commercialize our products and have a material adverse effect on our brands, revenues, expenses, results of operations, and financial condition.

Risks Related to Intellectual Property

1 unchanged sentence

We may seek to develop new products and technologies, including enhancements of our existing products for nVNS.

Developing new products and improving our existing products to meet the needs of current and future patients and consumers requires significant investment in research and development.

We do not know whether any such product development activities will result in products that meet necessary standards and performance criteria, whether the development will be completed on a timely basis, or if completed will lead to market acceptance and commercial success.

Developing new products and improving our existing products to meet the needs of current and future patients and consumers require significant investment in research and development.

We do not know whether any such product development activities will result in products that meet necessary standards and performance criteria, whether the development will be completed on a timely basis, or, if the development is completed, whether it will lead to market acceptance and commercial success.

We will need to carefully manage our introduction of any new products.

8 unchanged sentences

Our success depends in large part on our ability to secure effective patent protection for our products and processes in the United States and internationally.

We have filed and intend to continue to file patent applications for various aspects of our technology and trademark applications to protect our brand and business, and copyright applications to protect our software.

We have filed, and intend to continue to file, patent applications for various aspects of our technology and trademark applications to protect our brands and business and copyright applications to protect our software.

We seek to obtain and maintain patents and other intellectual property rights to restrict the ability of others to market products or services that misappropriate our technology and work product and/or infringe our intellectual property to compete with our products and services.

65 unchanged sentences

Third parties may challenge any existing patent or future patent we own or license through adversarial proceedings in the issuing offices or in court proceedings, including as a response to any assertion of our patents against them.

In any of these proceedings, a court or agency with jurisdiction may find our patents invalid and/or unenforceable, or even if valid and enforceable, insufficient to provide protection against competing products and services sufficient to achieve our business objectives.

In any of these proceedings, a court or agency with competent jurisdiction may find our patents invalid and/or unenforceable, or even if valid and enforceable, insufficient to provide protection against competing products and services to achieve our business objectives.

We may be subject to a third-party pre-issuance submission of prior art to the USPTO, or reexamination by the USPTO if a third party asserts a substantial question of patentability against any claim of a U.S.

7 unchanged sentences

others may be able to develop products that are similar to, or better than, ours in a way that is not covered by the claims of our patents;

we might not have been the first to conceive or reduce to practice the inventions covered by our patents or pending patent applications;

we might not have been the first to conceive of or reduce to practice the inventions covered by our patents or pending patent applications;

we might not have been the first to file patent applications for our inventions;

28 unchanged sentences

if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe or misappropriate its patent or other intellectual property rights, and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.

These lawsuits and proceedings, regardless of merit, are time-consuming and expensive to initiate, maintain, defend or settle, and could divert the time and attention of managerial and technical personnel, which could materially adversely affect our business.

These lawsuits and proceedings, regardless of merit, are time-consuming and expensive to initiate, maintain, defend, or settle, and could divert the time and attention of managerial and technical personnel, which could materially and adversely affect our business.

Any such claim could also force use to do one or more of the following:

10 unchanged sentences

In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays, or prohibit us from manufacturing, marketing, or otherwise commercializing our products, services, and technology.

Any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operation, financial condition or cash flows.

In addition, we may indemnify our customers and distributors against claims relating to the infringement of intellectual property rights of third parties related to our products.

6 unchanged sentences

If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.

The occurrence of any of these events may have a material adverse effect on our business, results of operation, financial condition or cash flows.

The occurrence of any of these events may have a material adverse effect on our business, results of operations, or financial condition.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed.

12 unchanged sentences

If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us, and our competitive position could be adversely affected.

If our intellectual property is not adequately protected so as to protect our market against competitors’ products and processes, our competitive position could be adversely affected, as could our business.

If our intellectual property is not adequately protected so as to protect our market against competitors’ products and processes, our competitive position and business could be adversely affected.

Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our existing and future products and processes.

As is the case with other pharmaceutical and medical device companies, our success is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents in the pharmaceutical and medical device industries involves both technological and legal complexity, and is therefore costly, time-consuming, and inherently uncertain.

Obtaining and enforcing patents in the pharmaceutical and medical device industries involve both technological and legal complexity and is therefore costly, time-consuming, and inherently uncertain.

In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement, and defense of our patents and pending patent applications.

US Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.

US Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain other situations.

Furthermore, the U.S.

4 unchanged sentences

Those changes may materially affect our patents or patent applications and our ability to obtain additional patent protection in the future.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Obtaining and maintaining patent protection depend on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process.

In addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the patent.

While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents.

20 unchanged sentences

We do not have patent rights in certain foreign countries in which a market for our products may exist.

Moreover, in foreign jurisdictions where we do have patent rights, proceedings to enforce such rights could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, and our patent applications at risk of not issuing.

Moreover, in foreign jurisdictions where we do have patent rights, proceedings to enforce such rights could result in substantial costs and divert our efforts and attention from other aspects of our business, which could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing.

Additionally, such proceedings could provoke third parties to assert claims against us.

51 unchanged sentences

Such a license may not be available on commercially reasonable terms or at all.

Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees and could result in customers seeking other sources for the technology, or in ceasing from doing business with us.

Even if we are successful in defending against such claims, litigation could result in substantial costs, be a distraction to management and other employees, and could result in customers seeking other sources for the technology, or in ceasing from doing business with us.

Our intellectual property agreements with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology.

8 unchanged sentences

We may also be unable to identify products or technology that we believe are an appropriate strategic fit for our company and protect intellectual property relating to, or necessary for, such products and technology.

The in-licensing and acquisition of third-party intellectual property rights for product candidates is a competitive area, and a number of more established companies are also pursuing strategies to in-license or acquire third-party intellectual property rights for products that we may consider attractive or necessary.

The in-licensing and acquisition of third-party intellectual property rights for product candidates are a competitive area, and a number of more established companies are also pursuing strategies to in-license or acquire third-party intellectual property rights for products that we may consider attractive or necessary.

These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities.

8 unchanged sentences

In the event that portions of our platform are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, or to re-engineer all or a portion of our technologies, or otherwise be limited in licensing activities, each of which could reduce or eliminate the value of our technologies.

In addition to risks related to license requirements, the use of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of the software.

In addition to risks related to license requirements, the use of open source software can lead to greater risks than use of third-party commercial software because open source licensors generally do not provide warranties or controls on the origin of the software.

Many of the risks associated with the use of open source software cannot be eliminated and could negatively affect our business.

9 unchanged sentences

Any of these developments could have a material adverse effect on our business, financial condition, and results of operations.

The regulatory environment governing information, cybersecurity, and privacy is increasingly demanding and continues to evolve.

Personal privacy and data security have become significant issues in the U.S., Europe, and many other jurisdictions where we offer our products.

The regulatory framework for privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

and foreign laws, such as the federal Health Insurance Portability and Accountability Act of 1996 (or HIPAA), govern the transmission, security, and privacy of individually identifiable information and sensitive health and other personal information that we may obtain or have access to in connection with the operation of our business, including the conduct of clinical research trials or other research studies that may provide us with access to this information.

We may be required to make costly system modifications to comply with these data privacy and security requirements.

In addition, if we do not properly comply with applicable laws and regulations related to the protection of this information, we could be subject to criminal or civil penalties and sanctions.

The California Consumer Privacy Act of 2018 (or CCPA), which became effective on January 1, 2020, requires us to make new disclosures to consumers about our data collection, use, and sharing practices.

The CCPA also allows consumers to opt out of certain data sales to third parties, affords new consumer rights, and provides a new cause of action for data breaches with the possibility of significant statutory damage awards as well as injunctive or declaratory relief if there has been unauthorized access, theft, or disclosure of specified personal information due to failure to implement reasonable security procedures.

The California Privacy Rights Act (or CPRA), which went into effect on January 1, 2023, with a 12-month look-back period for enforcement purposes, will effectively replace the CCPA.

Among other changes, the CPRA expands consumers’ rights and has enhanced enforcement mechanisms, such as the creation of a new California privacy agency that will investigate and enforce the CPRA and its promulgating regulations.

In addition to the CCPA and the CPRA, all 50 U.S.

states have data breach notification laws that, if violated, could result in penalties, fines, and litigation.

In addition, many states have implemented or are in the process of implementing related legislation, including state-specific biometric privacy laws that have resulted in class-action lawsuits against businesses.

The full impact of these laws on our business is yet to be determined, but it could result in increased operating expenses and additional exposure to the risk of litigation by or on behalf of consumers.

Internationally, the General Data Protection Regulation ( or GDPR) took effect in May 2018 within the European Economic Area (EEA), and many EEA jurisdictions have also adopted their own data privacy and protection laws in addition to the GDPR.

Furthermore, other international jurisdictions, including Singapore, South Korea, China, Brazil, Mexico, and Australia, have also implemented laws relating to data privacy and protection.

Although we believe that we are complying with the GDPR and similar laws, these laws are still relatively new.

Therefore, as international data privacy and protection laws continue to evolve, and as new regulations, interpretive guidance, and enforcement information become available, we may incur incremental costs to modify our business practices to comply with these requirements.

In addition, our internal control policies and procedures may not always protect us from reckless, intentional and/or criminal acts committed by our employees or agents.

Risks Related to Regulation of our Industry

Our business is subject to extensive governmental regulation that makes it expensive and time consuming for us to bring our gammaCore therapy to market in the United States and to expand the use of our gammaCore therapy to additional therapeutic indications.

Our business is subject to extensive governmental regulation that makes it expensive and time consuming for us to bring our gammaCore therapy and our general wellness products, Truvaga and TAC-STIM to market in the United States and to expand the use of our gammaCore therapy to additional therapeutic indications, and to expand the reach of our wellness initiatives.

Our gammaCore therapy must comply with regulatory requirements imposed by the FDA in the United States and by similar agencies in foreign jurisdictions.

3 unchanged sentences

Some of the most important requirements we must comply with include:

the Federal Food, Drug, and Cosmetic Act and the FDA’s implementing regulations (Title 21 CFR);

the Federal Food, Drug, and Cosmetic Act (FDCA) and the FDA’s implementing regulations (Title 21 CFR);

CE mark requirements of the European Union (or EU) and UKCA mark requirements of the United Kingdom;

1 unchanged sentence

Occupational Safety and Health Administration requirements;

Federal Trade Commission;

health information privacy and security, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and comparable state laws;

New Jersey Department of Health Services requirements.

Government regulation may impede our ability to conduct clinical trials and to manufacture and sell our existing therapy and any future products.

• Federal Trade Commission requirements;

• health information privacy and security laws, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and comparable state laws;

State of New Jersey Department of Health Services legal requirements.

Government regulation may impede our ability to conduct clinical trials and manufacture and sell our existing therapy and any future products.

Government regulation also could delay our marketing of new products for a considerable period of time and impose costly procedures on our activities.

The FDA and other regulatory agencies may not clear or approve our gammaCore therapy in additional therapeutic areas that we may pursue, on a timely basis, if at all.

For instance, the FDA and other regulatory agencies may not clear or approve our gammaCore therapy in additional therapeutic areas that we may pursue, on a timely basis, if at all.

We have recently reduced resources in research and development which may delay our receipt of regulatory approvals for additional indications.

Any delay in obtaining, or failure to obtain, such clearances or approvals could negatively impact our marketing of our gammaCore therapy and impede our ability to bring future products to market.

While 510(k) clearance from the FDA has been received to expand the label for gammaCore therapy for several indications our gammaCore therapy will remain subject to strict regulatory controls on manufacturing, marketing and use.

Moreover, any reclassification, redesignation, or new regulatory treatment of our existing general wellness products in light of applicable law, nonbinding recommendations or other inferences resulting from complex legal analysis and interpretation of the existing regulatory framework governing wellness products and their relational position in the larger FDA scheme of enforcement may negatively impact our marketing and other activities in respect to our wellness and human performance products, Truvaga and TAC-STIM, respectively, and other future marketing and other activities in respect to future wellness business ventures.

Even though 510 (k) clearance from the FDA has been received to expand the label for gammaCore therapy for several indications, our gammaCore therapy will remain subject to strict regulatory controls on manufacturing, marketing, and use.

We may be forced to modify or recall a product after release in response to regulatory action or unanticipated difficulties encountered in general use.

Any such action could have a material effect on the reputation of our gammaCore therapy and on our business and financial position.

The advertising, marketing and labeling of medical devices is highly regulated by the FDA and Federal Trade Commission ("FTC").

Our efforts to promote our gammaCore therapy, including via direct-to-consumer marketing or social media initiatives, could subject us to additional scrutiny of our communication of risk information, benefits or claims, by the FDA, FTC, or both.

Further, regulations may change, and any additional regulation could limit or restrict our ability to use any of our technologies, which could harm our business.

Any such action could have a material effect on the reputation of our gammaCore therapy and on our competitive and financial position.

The advertising, marketing, and labeling of medical devices are highly regulated by the FDA and FTC.

Our general wellness product activity is also subject to similar marketing and promotion risk.

In 2009, the FTC promulgated nonbinding Guides Concerning the Use of Endorsements and Testimonials in Advertising (or Endorsement Guides), which explained what endorsement practices the FTC views as being unfair or deceptive acts or practices.

In 2020, the FTC sought public comments in connection with informal, notice and comment rulemaking on whether the Endorsement Guides should be amended in various ways.

The last time the FTC sought similar public comments led to a major revision of the Endorsement Guides.

Consequently, the FTC could bring an enforcement action based on practices that are possibly inconsistent with the current Endorsement Guides as the FTC considers any revisions.

Under the current Endorsement Guides, advertisements that feature a consumer and convey his or her atypical experience with a product or service are required to clearly disclose the typical results that consumers can generally expect.

We cannot be sure that the FTC will not challenge our advertising or other operations in the future, which could have a material adverse impact on our business.

Furthermore, as a general matter, regulations may change, and any additional regulation could limit or restrict our ability to use any of our technologies, which could harm our business and prospects for growth.

We could also be subject to new international, federal, state, or local regulations that could affect our research and development programs and harm our business in unforeseen ways.

If this happens, we may have to incur significant costs to comply with such laws and regulations, which will harm our results of operations.

Our future success depends on our ability to develop, receive regulatory clearance or approval for, and introduce new products or product enhancements that will be accepted by the market in a timely manner.

If this happens, we may have to incur significant costs to comply with such laws and regulations, which will harm our results of operations for an unknown period of time.

Compliance obligations under the various domestic and foreign regulations are oftentimes complex and onerous, which contributes to a risk that we could be found to be not compliant with particular requirements.

The risk of being found in violation of applicable domestic and foreign regulations, as a consequence of public law-based adjudicatory or other processes (such as administrative law hearings), is further increased by the fact that many of them have not been comprehensively interpreted by regulatory agencies or judicial authorities, particularly with respect to new and emerging technologies, and regulatory provisions are typically open to various interpretations and possible juridical doctrines in certain jurisdictions that imbue greater authority to interpret the law to regulatory authorities under certain conditions or standards.

Any significant developments in the FDA or foreign regulatory approval standards and processes, including both legal and policy changes, could also delay, or preclude, the clearance or approval of our products submitted for review.

For example, in the United States, as part of the 21 st Century Cures Act passed in 2016, Congress enacted several reforms that affect medical device regulation both pre- and post-approval, and FDA implementation and development of guidance in many areas are ongoing.

In August 2017, Congress enacted the FDA Reauthorization Act of 2017 (or FDARA), which reauthorized the FDA to collect device user fees, including a new user fee for de novo classification requests, and contained substantive amendments to the device provisions of the FDCA.

Among other changes, FDARA mandated that the FDA update and revise its processes for scheduling inspections of device establishments, communicating about those inspections with manufacturers, and providing feedback on the manufacturer’s responses to Form 483s.

The statute also mandated that the FDA study the impact of device servicing, including third-party services, and created a new process for device sponsors to request classification of accessory devices as part of the PMA application for the parent device or to request a separate classification of accessory devices.

In addition, the FDA is reportedly in the process of reviewing the 510(k) approval process and criteria and has announced initiatives to improve the current pre- and post-market regulatory processes and requirements associated with infusion pumps and other home-use medical devices, for instance, and, as part of such review efforts, the FDA is evaluating adverse event reporting and recall processes for insulin pumps.

Generally, any change in the laws or regulations that govern the clearance and approval processes relating to our current and future products could make it more difficult and costly to obtain clearance or approval for new products, or to produce, market, and distribute existing products.

The data contained in our submissions, including data drawn from our clinical trials, may not be sufficient to support clearance or approval of our products or additional or expanded indications.

Medical device company stock prices have declined significantly in certain circumstances where companies have failed to meet expectations in regard to the timing of regulatory approval.

If the FDA’s response causes product approval delays, or is not favorable for any of our products, our stock price could decline substantially.

It is uncertain how potential changes to FDA regulatory approval standards and processes may impact our ability to gain clearance or approval from FDA for our products in the future.

We depend hea vily on revenue from the Department of Defense and the Department of Veterans Affairs for a substantial portion of our business.

Changes in the U.S.

Government's priorities, or delays or reductions in spending could have a material adverse effect on our business.

Approximately 60.8% of our revenues from operations in fiscal 2022 were from sales directly or indirectly to the programs with the U.S.

Department of Defense, primarily the Department of Veterans Af fairs , and to a lesser extent the U.S.

Cost cutting including through consolidation and elimination of duplicative organizations and insurance has become a major initiative for Department of Defense.

The funding of our programs may be subject to the overall U.S.

government budget and appropriation decisions and processes which are driven by numerous factors, including geo-political events and macroeconomic conditions.

Spending levels by government authorities we do business with can be increasingly difficult to predict and are expected to be affected by numerous factors.

Such factors include priorities of the Biden administration and the Congress, and the overall health of the U.S.

and world economies and the state of governmental finances.

We expect that budgetary constraints and concerns related to spending and the national debt will continue to place pressure government spending levels, which could adversely impact funding for purchase of certain of our products, our operations, financial results and growth p rospects.

Our future success in part depends on our ability to develop, receive regulatory clearance or approval for, and introduce new products or product enhancements that will be accepted by the market in a timely manner.

It is important to our business that we build a pipeline of product offerings for treatment of our target indications.

As such, our success will depend in part on our ability to develop and introduce new products.

However, we may not be able to successfully develop and obtain regulatory clearance or approval for product enhancements, or new products, or these products may not be accepted by physicians or the payers who financially support many of the procedures performed with our products.

However, we may not be able to successfully develop and obtain regulatory clearance or approval for product enhancements, or new products, or these products may not be accepted by physicians or the payors who financially support many of the procedures performed with our products.

The success of any new product offering or enhancement to an existing product will depend on a number of factors, including our ability to:

10 unchanged sentences

The medical device industry is regulated extensively by governmental authorities, principally the FDA and corresponding state and foreign regulatory agencies and authorities, such as the European Commission and the EEA member states, competent authorities, and notified bodies.

The FDA, FTC and other US, EEA and foreign governmental agencies and authorities regulate and oversee, among other things, with respect to medical devices:

The FDA, FTC, and other U.S., EEA, and foreign governmental agencies and authorities regulate and oversee, among other things, with respect to medical devices:

design, development, and manufacturing;

8 unchanged sentences

advertising and promotion;

recalls and other field safety corrective actions;

recalls and other field safety corrective actions, and in the case of the FDA, for example, if the FDA subsequently determines that a report was required for such recall or other field correction action that was not submitted, any subsequent related enforcement actions;

post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury;

22 unchanged sentences

This process can be expensive and time-consuming.

Moreover, in May 2017 the new MDR, entered into force.

Following its entry into application in May 2021, the regulation introduced substantial changes to the obligations with which medical device manufacturers must comply in the EU.

High risk medical devices will be subject to additional scrutiny during the conformity assessment procedure.

Specifically, the MDR repeals and replaces the EU Medical Devices Directive.

Moreover, in May 2017, the EU Medical Devices Regulation 2017 / 745 , or MDR was adopted.

The MDR repeals and replaces the EU Medical Devices Directive.

Unlike directives, which must be implemented into the national laws of the EEA member states, the regulations would be directly applicable, i.e., without the need for adoption of EEA Member State laws implementing them, in all EEA member states and are intended to eliminate current differences in the regulation of medical devices among EEA member states.

The MDR, among other things, is intended to establish a uniform, transparent, predictable, and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation.

Once applicable, the Medical Devices Regulation will among other things:

The MDR became applicable on May 26, 2021, with the transition period intended to end on May 26, 2024.

While progress has been made on the transition from the MDD to the MDD, a European Commission proposal published on January 6, 2023, stated that the overall number and capacity of conformity assessment (a.k.a., ‘notified’) bodies remains insufficient to carry out the tasks required of them.

In addition, many manufacturers are not sufficiently prepared to meet the strengthened requirements of the MDR by the end of the transition period.

This is threatening the availability of medical devices on the EU market.

According to an estimation presented by notified bodies to the Medical Device Coordination Group on November 17, 2022, the number of certificates issued by May 2024 may reach around 7,000 if the current rate of certificate issuance remains the same with no changes to current conditions.

Notified bodies estimate that the transition of all Directives’ certificates to MDR certificates could possibly be completed by December 2027.

The European Commission’s “ Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2017/745 and (EU) 2017/746 as regards the transitional provisions for certain medical devices and in vitro diagnostic medical devices, Brussels, 1.6.2023 intends” to extend the transition period from May 26, 2024 until December 31, 2027 for high-risk Class III and Class IIb implantable devices, and until December 31, 2028 for medium and lower risk Class IIb and Class IIa devices.

The gammaCore products (gammaCore Sapphire and gammaCore-S) are EU Class IIa devices.

Once applicable, the new regulations will among other things:

strengthen the rules on placing devices on the market and reinforce surveillance once they are available;

8 unchanged sentences

Our failure to continue to comply with applicable foreign regulatory requirements, including those administered by authorities of the EEA countries, could result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of Conformity by our notified body (the British Standards Institution), which could impair our ability to market products in the EEA in the future.

The United Kingdom’s withdrawal from the EU, or Brexit could lead to legal uncertainty and potentially divergent national laws and regulations in the EU and the United Kingdom.

Given the lack of comparable precedent, it is unclear what Brexit’s financial, regulatory, and legal implications would be and how it would affect us.

However, potentially changing regulatory schemes and tariffs engendered by Brexit may add additional complexity, cost and delays to the operations of electroCore UK Ltd., and in marketing or selling our products in the United Kingdom.

The United Kingdom’s withdrawal from the EU (or Brexit) could lead to significant business and legal uncertainty and potentially divergent national laws and regulations in the EU and the United Kingdom.

Given the lack of comparable historical precedent, it is unclear what Brexit’s financial, regulatory, and legal implications would be, and how Brexit would ultimately affect us.

However, potentially changing regulatory schemes and tariffs engendered by Brexit may add additional complexity, cost, and delays to the operations of electroCore UK Ltd.

and in marketing or selling our products in the United Kingdom.

Our revenue and profit, supply, and demand for our products and customer retention and acquisition in both the long term and short term could be adversely affected.

Since a significant proportion of the regulatory framework in the United Kingdom was derived from EU directives and regulations, the withdrawal of the United Kingdom from the EU could materially impact the regulatory regime with respect to the CE Certificates of Conformity in the United Kingdom.

CE Certificates of Conformity issued by a notified body accredited in the EU may no longer be recognized in the United Kingdom.

Importantly, CE Certificates of Conformity issued by a notified body accredited in the EU may no longer be recognized in the United Kingdom.

Similarly, notified bodies accredited in the United Kingdom will no longer be able to issue CE Certificates of Conformity.

Obtaining new CE Certificates of Conformity or certification for the UK may have a significant impact on our activities.

Finally, Brexit may also disrupt the way that the United Kingdom interprets obligations under CE Certificates of Conformity.

Our products are subject to rigorous regulation by the FDA, notified bodies, and numerous other federal, state and foreign governmental authorities.

Lastly, Brexit may also disrupt the way that the United Kingdom interprets obligations under CE Certificates of Conformity.

If we fail to maintain regulatory approvals and clearances, or are unable to obtain, or experience significant delays in obtaining FDA clearances, approvals or CE Certificates of Conformity for our future products or product enhancements, our ability to commercially distribute, market, and sell these products could suffer, and, if our general wellness products no longer fall under the scope of applicable FDA guidance, such products may be subject to additional and more comprehensive regulation and/or greater regulatory uncertainty, affecting our ability to commercially distribute, market, and sell such products in the ordinary course of business.

Any of our medical device products are subject to rigorous regulation by the FDA, notified bodies, and numerous other federal, state, and foreign governmental authorities.

The process of obtaining regulatory clearances, approvals, or CE Certificates of Conformity to market a medical device can be costly and time consuming, and we may not be able to obtain these clearances or approvals on a timely basis, if at all.

In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug and Cosmetic Act, or is the subject of an approved PMA unless the device is specifically exempt from those requirements.

In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510 (k) of the FDCA, or is the subject of an approved PMA unless the device is specifically exempt from those requirements.

The FDA will clear marketing of a lower risk medical device through the 510 (k) process if the manufacturer demonstrates that the new product is substantially equivalent to a legally marketed “predicate” device.

6 unchanged sentences

In the future, we may need to submit a PMA or continue to utilize the “de novo” process to expand our labeling claims to include certain indications, which likely will be more costly, time consuming and uncertain than the traditional 510(k) process.

Our general wellness products, Truvaga and TAC-STIM, which in the future may or may not be low risk general wellness products in light of applicability of, and potential, revisions to FDA guidance for such products, and which are not intended for medical use, and which we believe appropriately fall under the scope of current FDA guidance applicable to such products, are not normally subject to the rigorous regulatory processes described in the aforementioned paragraphs.

Therefore, some of our products, or product features in certain circumstances, may not be subject to the aforesaid Section 510(k) process and/or other regulatory requirements in accordance with specific FDA guidance and policies.

In addition, some of our products, or product features, may not be subject to statutory device prescription requirements pursuant to various provisions of the FDCA.

Section 3060(a) of the 21 st Century Cures Act amended Section 520 of the FDCA on December 13, 2016, removing certain software functions, including those intended for maintaining or encouraging a healthy lifestyle that are unrelated to the diagnosis, cure, mitigation, prevention, or treatment of a disease or condition, from the definition of device in Section 201(h) of the FDCA.

Section 520(o)(1)(B) of the FDCA states that software that is intended “for maintaining or encouraging a healthy lifestyle and is unrelated to the diagnosis, cure, mitigation, prevention, or treatment of a disease or condition” is not a device under section 201(h) of such enactment.

In connection with the aforesaid legislative developments, the FDA has issued the aforementioned general wellness guidance in July 2016 and the reissued guidance in 2019, clarifying at each time the FDA’s interpretation of this provision and its application to general wellness products (as defined by the Center for Devices and Radiological Health, which for the purposes of the current guidance mean products that are intended for only general wellness use, as defined in the current general wellness guidance, and that present a low risk to the safety of users and other persons).

We recognize that the FDA's guidance documents, including the current general wellness guidance on low risk, general wellness products, do not create legal obligations.

Instead, guidance documents describe the FDA’s contemporary thinking on a topic, which is subject to change, and should be viewed only as legally nonbinding recommendations, unless particular regulatory or statutory requirements are cited to the make the contrary inference.

In light of this information, we also recognize that the current guidance does not change or otherwise rescind any legally enforceable requirements of the FDCA or any applicable regulations.

Moreover, we acknowledge that the FDA’s general wellness guidance in this respect does not prohibit the FDA from consulting with the Consumer Product Safety Commission (or CPSC) as to whether or not a general wellness product is a consumer product under the CPSC’s authority or a device.

The FDA may coordinate with other agencies and authorities, such as the CPSC, in ascertaining appropriate jurisdiction over products.

If a product is a device under Section 201(h) of the FDCA, it is generally excluded from CPSC’s authority over “consumer products” as contemplated under the Consumer Product Safety Act, particularly under Section 2052(a)(5)(ii)(H).

However, CPSC and the FDA may both assert jurisdiction over certain medical devices under other statutory authorities the CPSC is charged with implementing.

Subject to continuing analysis and review of considerations included in the FDA, general wellness guidance and any revisions to such guidance and other guidance, we have applied or otherwise made use of the guidance questions in Section 4 of the published FDA low risk, general wellness products guidance document, which assist in determining whether general wellness products are within the scope of such guidance, among other legal review.

We acknowledge that such questions should be read in the context of the full written text of the guidance and represent, but do not constitute in and of themselves, the framework described in such guidance.

Main considerations, including whether a product has an intended use that relates to maintaining or encouraging a general state of health or healthy activity, whether a product has an intended use that relates the role of healthy lifestyle with helping to reduce the risk or impact of certain chronic diseases or conditions, whether the product is low risk in that it is not invasive, and not implanted, and does not involve a technology that may pose a risk to the safety or users or other persons if specific regulatory controls are not applied, among other considerations, are particularly relevant to our business involving general wellness products.

Descriptions of general wellness products in the aforementioned FDA guidance within Section 3 of the published document are also particularly relevant to our business involving general wellness products.

We further acknowledge that the Center for Devices and Radiological Health’s general wellness policy applies only to general wellness products that are deemed to be low risk.

In considering whether a product of ours is low risk for purposes of the aforementioned FDA guidance, the FDA recommends the due consideration of whether the Center for Devices and Radiological Health actively regulates products of the same type as the product in question, and this consideration is important to our current and future wellness market engagement.

Our business activities involving general wellness products, Truvaga and TAC-STIM may be subject to significant and possibly material and adverse consequences if revisions to FDA guidance or other guidance modify our reasoned beliefs and opinions regarding classification, other legal questions, and compliance with all applicable rules and regulations that apply to our business activities in various ways.

Moreover, FDA may disagree with our assessment, potentially subjecting these products to regulation as medical devices.

We and our legal advisors strive to regularly keep abreast of all relevant developments in the statutory, administrative, and decisional laws, on federal and, where applicable, state levels, that which influence or inform our general wellness products-related development, marketing, promotion, distribution, and sale, among other activities.

In light of the substantial complexity in such laws as well as their potential actual interactive Ness, or perceived overlap or conflict, with the application of the FDA’s existing regulatory approval or clearance processes for medical device products as a result of either official agency changes to applicable wellness guidance, our subsequent legal review of such guidance that differs substantially from earlier legal review of such guidance, or the FDA’s disagreement with our determination regarding the regulatory status of our general wellness products, we may experience adverse and possibly material effects on our ability to commercialize our general wellness products, which could impact our financial condition, operating results, and prospects for growth.

Separate and apart from our legal and compliance functions and external advisors, we maintain internal controls and policies and procedures that militate against compliance risk in our wellness line of business and train and educate our sales agents and other personnel on subject matter pertinent to compliance with relevant law in various jurisdictions.

Our failure to comply with U.S.

16 unchanged sentences

Obtaining clearances and approvals can be a time-consuming process, and delays in obtaining required future clearances or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our future growth.

There is no guarantee that the FDA will grant 510 (k) clearance or PMA approval of our future products and failure to obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business.

There is no guarantee that the FDA will grant 510 (k) clearance or PMA approval of our future products, and failure to obtain necessary clearances or approvals for any such future products would adversely affect our overall ability to grow our business.

Some of our new products or expanded indications for use will require FDA clearance of a 510(k) or may require FDA approval of a PMA.

7 unchanged sentences

The failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions:

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

untitled letters, warning letters, fines, injunctions, consent decrees, including FDA orders to repair, replace, or refund the cost of devices, and civil penalties;

unanticipated expenditures to address or defend such actions;

1 unchanged sentence

recall, detention or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

operating restrictions or partial suspension or total shutdown of production, or interruption of the supply of components from our key component suppliers;

refusing or delaying our requests for 510(k) clearance or PMA approval of new products or modified products;

7 unchanged sentences

If the FDA determines that our promotional materials, labeling, training, or other marketing or educational activities constitute promotion of an unapproved use, it could request that we cease or modify our training or promotional materials or subject us to regulatory enforcement actions.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our training or other promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

It is also possible that other U.S.

federal, state, or foreign enforcement authorities might take action if they consider our training or other promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

In addition, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products, and we must comply with medical device reporting requirements, including the reporting of adverse events and malfunctions related to our products.

We may also decide to recall a product voluntarily if we find a material deficiency, including unacceptable risks to health, manufacturing defects, design errors, component failures, labeling defects, or other issues.

Recalls of our products could divert the attention of our management and have an adverse effect on our reputation, financial condition, and operating results.

Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements, such as QSR, may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension of regulatory clearances or approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.

With regard to QSR administration, the FDA may enforce this regulation through announced (through prior notification) or unannounced inspections that pertain to several facets of our methods and documentation processes of the design, testing, production, control, selection, and oversight of suppliers or contractors;

quality assurance;

complaint handling;

and servicing of our products.

The misuse or off-label use of our gammaCore therapy may harm our image in the marketplace, result in injuries that lead to product liability suits, which could be costly to our business, or result in costly investigations and sanctions from the FDA and other regulatory bodies if we are deemed to have engaged in off-label promotion.

gammaCore has been CE Marked in the EEA and cleared by the FDA for the acute treatment of eCH, CH prevention and the preventive and acute treatment of migraine headache in the United States;

and gammaCore Sapphire CV has received an EUA from the FDA for the acute treatment of asthma exacerbations in known or suspected COVID-19 patients.

We may only promote or market our gammaCore or gammaCore CV therapy for its specifically approved or authorized indications as described on the approved or authorized label.

gammaCore has been CE Marked in the EEA and cleared by the FDA for the acute treatment of eCH in adults, CH prevention, the preventive and acute treatment of migraine headache in the United States in adults and adolescents, and the treatment of Paroxysmal Hemicrania, or HC, in adults.

We may only promote or market our gammaCore for its specifically approved or authorized indications as described on the approved or authorized label.

We train our marketing and sales force against promoting our products for uses outside of the approved or authorized indications for use, known as “off-label uses.” We cannot, however, prevent a physician from prescribing our product off-label, when in the physician’s independent professional medical judgment, he or she deems appropriate.

4 unchanged sentences

Product liability claims could divert management’s attention from our core business, be expensive to defend, and result in sizable damage awards against us that may not be covered by insurance.

In addition, if our products are approved for sale in the United States and the FDA determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties.

In addition, if our products are approved for sale in the United States, and the FDA determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or our educational, promotional, and marketing practices in various ways or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs, and the curtailment of our operations.

1 unchanged sentence

Any of these events could significantly harm our business and results of operations and cause our stock price to decline.

Further, the advertising and promotion of our products is subject to EEA member states’ national laws implementing Directive 93/42/EEC on the approximation of the laws of the member states relating to medical devices, or the Medical Devices Directive and applying the Medical Devices Regulation, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other EEA member state legislation governing the advertising and promotion of medical devices.

While certain U.S.

courts have held that truthful, non-misleading, off-label information is protected under the First Amendment under certain circumstances, the FDA continues to take the position that off-label promotion is subject to possible enforcement action.

It is also conceivable that other federal, state, or foreign enforcement authorities may take action if they consider our communications, including promotional or training materials, to constitute promotion of an uncleared or unapproved use.

If not successfully defended, enforcement actions related to off-label promotion could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

In any such event, our reputation could be damaged, adoption of our products could be impaired and we could be subject to extensive fines and penalties.

Additionally, we must have adequate substantiation for the claims we make for our products.

If any of our claims are determined to be false, misleading or deceptive, our products could be considered misbranded under the FDCA or in violation of the Federal Trade Commission Act.

We could also face lawsuits from our competitors under the Lanham Act alleging that our marketing materials are false or misleading.

In some instances in our advertising and promotion, we may make claims regarding our products relative to competing products, which may subject us to heightened regulatory scrutiny, enforcement risk, and litigation risks.

For instance, the FDA applies an elevated level of review to comparative claims when applying its statutory standards for advertising and promotion, particularly with regard to the requirement that promotional labeling be truthful and not misleading.

Differing interpretations as to whether certain communications are consistent with a product’s FDA-required labeling may be more likely in some cases than others, and so, the FDA customarily evaluates communications on a fact-specific basis.

In addition, making comparative claims may draw concerns from our competitors.

Where a company makes a claim in advertising or promotion that its product is superior to the product of a competitor, or that the competitor’s product is inferior, this creates legal risk in that the competitor has possible legal remedies under federal and state false advertising or unfair and deceptive trade practices law (and possibly also state libel law).

Such litigation ordinarily implicates relief in equity, such as injunctive relief against further advertising, a court order directing corrective advertising, and compensatory and punitive damages where permitted by applicable law.

The advertising and promotion of our products is also subject to EEA member states’ national laws implementing Directive 93 / 42 /EEC on the approximation of the laws of the member states relating to medical devices, or the Medical Devices Directive and applying the Medical Devices Regulation, Directive 2006 / 114 /EC concerning misleading and comparative advertising, and Directive 2005 / 29 /EC on unfair commercial practices, as well as other EEA member state legislation governing the advertising and promotion of medical devices.

EEA member state legislation may also restrict or impose limitations on our ability to advertise our products directly to the general public.

In addition, voluntary EU and national codes of conduct provide guidelines on the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare professionals.

Notwithstanding the risk of legal liability in connection with claims or actions alleging misleading or comparative advertising and promotion, in foreign jurisdictions, we can market a product only if we receive a marketing authorization in the first place and, in some cases, pricing approval, from the appropriate regulatory authorities.

The marketing authorization procedures vary among countries and can involve additional testing, and the time required to obtain any required authorization or approval may differ from that required to obtain FDA marketing authorization(s).

Foreign regulatory authorization or approval processes may include all of the risks associated with obtaining FDA marketing authorization(s) in addition to other risks.

We may not obtain foreign regulatory authorizations or approvals on a timely basis, if at all.

Obtaining a marketing authorization from the FDA does not ensure authorization or approval by regulatory authorities in other countries will follow, and authorization or approval by one foreign regulatory authority does not ensure authorization or approval by regulatory authorities in other foreign countries or by the FDA.

In addition, in order to obtain the authorization to market our products in certain foreign jurisdictions, we may need to obtain a Certificate to Foreign Government from the FDA.

The FDA may refuse to issue a Certificate to Foreign Government in certain instances, including without limitation, during the pendency of any outstanding warning letter.

As a result, we may not be able to file for regulatory approvals or marketing authorizations and may not receive necessary approvals or authorizations to commercialize our products in any market outside the United States on a timely basis, or at all.

gammaCore may in the future be subject to notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results.

The FDA, EEA authorities and similar foreign governmental authorities have the authority to request or require the recall of commercialized products in the event of regulatory noncompliance or material deficiencies or defects in design or manufacture that could affect patient safety.

The FDA, EEA authorities and similar foreign governmental authorities have the authority to request or require the recall of commercialized products in the event of regulatory non-compliance or material deficiencies or defects in design or manufacture that could affect patient safety.

In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is a reasonable probability that the device would cause serious injury or death.

18 unchanged sentences

Any corrective action, whether voluntary or involuntary, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.

Product recalls may materially and adversely affect consumer confidence in our brand and lead to decreased customer demand for our products.

Product recalls, withdrawals, or seizures also may lead to increased scrutiny of our operations by federal, state, or international regulatory agencies and increased litigation.

Both outcomes could have material adverse effects on our business, results of operations, and financial condition.

Legislative or regulatory reforms may make it more difficult and costly for us to obtain regulatory clearance of our product candidates and to manufacture, market, and distribute our products after clearance is obtained.

3 unchanged sentences

It is impossible to predict whether legislative changes will be enacted, or FDA regulations, guidance, or interpretations changed, and what the impact of such changes, if any, may be.

Political change as a result of elections, including the recent presidential and congressional elections, could result in significant legislative and regulatory reforms impacting the FDA’s regulation of our products.

Political change as a result of elections, including presidential and congressional elections, could result in significant legislative and regulatory reforms impacting the FDA’s regulation of our products.

Any change in the laws or regulations that govern the clearance and approval processes relating to our current and future products could make it more difficult and costly to obtain clearance or approval for new products, or to produce, market, and distribute existing products.

1 unchanged sentence

In the EU, on May 25, 2017, the new MDR was adopted, and it entered into application on May 26, 2020.

The MDR has introduce substantial changes to the obligations with which medical device manufacturers must comply in the EU.

The MDR has introduced substantial changes to the obligations with which medical device manufacturers must comply within the EU.

High risk medical devices will be subject to additional scrutiny during the conformity assessment procedure.

8 unchanged sentences

Violations can also result in criminal penalties, including criminal fines and imprisonment, and exclusion from participation in government healthcare programs, including Medicare and Medicaid;

the Stark Law, in the event that third-party payers require us to be a durable medical equipment, or DME, supplier or we sell our products directly to providers who are DME suppliers that submit claims to such payers.

the Stark Law, in the event that third-party payors require us to be a durable medical equipment, or DME, supplier or we sell our products directly to providers who are DME suppliers that submit claims to such payors.

The Stark Law prohibits a physician from making a referral for certain designated health services covered by the Medicare program or Medicaid program, including DME, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services, and prohibits that entity from billing or presenting a claim for the designated health services furnished pursuant to the prohibited referral, unless an exception applies.

5 unchanged sentences

the federal civil False Claims Act, which prohibits, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment of federal funds, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government.

The federal civil False Claims Act can apply to manufacturers who provide information on coverage, coding, and reimbursement of their products to persons who bill third-party payers.

The federal civil False Claims Act can apply to manufacturers who provide information on coverage, coding, and reimbursement of their products to persons who bill third-party payors.

Private individuals can bring False Claims Act “qui tam” actions, on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in amounts paid by the entity to the government in fines or settlement.

1 unchanged sentence

There are also federal criminal false claims and federal civil monetary penalty laws that carry significant monetary and other penalties for submissions of false or fraudulent claims and statements;

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created federal criminal laws that prohibit, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.

HIPAA, as amended, which created federal criminal laws that prohibit, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.

A person or entity does not need to have actual knowledge of these statutes or specific intent to violate them;

5 unchanged sentences

The government may impose significant civil monetary penalties for all payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission;

state and foreign law equivalents of each of the above federal laws, such as state anti- kickback and false claims laws that may apply to items or services reimbursed by any third-party payer, including commercial insurers;

• FCPA and similar worldwide anti-bribery laws in non-U.S.

jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S.

officials for the purpose of obtaining or retaining business;

state and foreign law equivalents of each of the above federal laws, such as state anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers;

state laws that require device and drug companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

6 unchanged sentences

Due to the breadth of these laws, the narrowness of statutory exceptions, and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.

The scope and enforcement of each of these laws are uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.

Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions, and settlements in the healthcare industry.

Responding to investigations can be time-and resource-consuming and can divert management’s attention from the business.

Additionally, as a result of these investigations, healthcare providers and entities may have to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement.

Responding to investigations can be time-consuming and costly and can divert management’s attention from the business.

Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

If our operations are challenged or found to be in violation of any of the laws described above or any other governmental regulations that apply to us now or in the future, we may be subject to penalties, including civil and criminal penalties, damages, fines, disgorgement, exclusion from governmental health care programs, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.

We have implemented policies and procedures designed to ensure compliance with applicable global laws and regulations, but there can be no assurance that we will be in continuous compliance with all relevant domestic and global regulations, given their multitude, complexity, and changeable nature.

disgorgement;

exclusion from governmental health care programs;

and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.

Breakthrough Designation from the FDA may not actually lead to a faster development or regulatory review or approval process and does not assure FDA approval of our devices.

The FDA’s Breakthrough Devices Program is a voluntary program for certain medical devices and device-led combination products that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions.

The goal of the Breakthrough Devices Program is to provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and De Novo marketing authorization.

The Breakthrough Devices Program offers manufacturers an opportunity to interact with the FDA's experts through several different program options to efficiently address topics as they arise during the premarket review phase, which can help manufacturers receive feedback from the FDA and identify areas of agreement in a timely way.

Manufacturers can also expect prioritized review of their submission.

While our gammaCore nVNS device has received Breakthrough Designation from the FDA for the treatment of posttraumatic stress disorder, or PTSD, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

In addition, the FDA may withdraw Breakthrough Device designation if it believes that the Designation is no longer supported by data from our clinical development program.

Healthcare legislative reform measures may have a material adverse effect on us.

7 unchanged sentences

It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal, or replace the ACA will impact the ACA or our business.

Any new limitations on, changes to, or uncertainty with respect to the ability of individuals to enroll in governmental reimbursement programs or other third-party payor insurance plans could impact demand for our product.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

1 unchanged sentence

In addition, on January 2, 2013, the American Taxpayer Relief Act of 2012, was signed into law which, among other things, further reduced Medicare payments to certain providers, including hospitals.

The Medicare Access and CHIP Reauthorization Act of 2015, enacted on April 16, 2015 (MACRA), repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that began in 2019 that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations.

The Medicare Access and CHIP Reauthorization Act of 2015, enacted on April 16, 2015, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that began in 2019 that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressures.

ESG matters, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition, and operating results and may damage our reputation.

Companies across all industries are facing increasing scrutiny regarding their environmental, social, and governance practices.

In particular, we expect many customers will continue to indicate preferences for buying products that are sustainably and responsibly grown and/or made.

Changing and unpredictable preferences in this manner may result in increased interest in the sourcing or origin of our components, the recyclability of our products, and the environmental impact of our supply chain, among other areas of interest.

Such preferences could require additional transparency, due diligence, and public reporting and could cause us to incur additional costs or to make changes to our business operations.

We may also determine that certain changes are required in anticipation of further evolution of consumer preferences and demands.

Increased focus on ESG matters may also result in investors reconsidering their investment decisions as a result of their particular assessments of a company’s ESG practices.

Moreover, concern over climate change and other environmental sustainability matters has resulted and may in the future result in new or elevated legal and regulatory requirements to reduce or militate against certain impacts to the environment, including greenhouse gas emissions regulations, alternative energy policies, and sustainability initiatives, such as single use plastics.

Increased regulatory requirements may be more complex and detailed relative to any sustainability measures we may be currently undertaking or may consider implementing in the future and may cause disruptions in the supply and manufacture of our products or an increase in operating costs.

If we fail to achieve any goals, targets, or objectives we may set with respect to ESG matters, if we do not comply with new regulations and laws or meet evolving consumer, investor, industry, or other stakeholder expectations and standards, including those related to potential reporting, or if we are perceived to have not responded appropriately to a growing concern for ESG matters, we may face public or private legal or regulatory actions;

the imposition of fines, penalties, or other sanctions;

adverse publicity;

and decreased total demand from certain customers who may cease buying our products, and the price of our stock could decline.

Any of these possible results could adversely and materially harm our reputation or have a materially significant effect on our business, financial condition, or operating results.

Risks Related to Our Common Stock

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common stock and our ability to access the capital markets.

On December 20, 2021, we received a letter from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we did not meet the minimum bid price of $1.00 per share required for continued listing on The Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1).

Pursuant to the initial Nasdaq notice and Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, we have 180 calendar days from the date of the notice, or until June 20, 2022, to regain compliance with the minimum bid price requirement in Rule 5450(a)(1) by achieving a closing bid price for our common stock of at least $1.00 per share over a minimum of 10 consecutive business days.

Such a delisting would have a negative effect on the price of our common stock, impair the ability to sell or purchase our common stock when persons wish to do so, and any delisting could materially adversely affect our ability to raise capital or pursue strategic , financing or other transactions on acceptable terms, or at all.

Delisting from the Nasdaq Global Select Market could also have other negative results, including the potential loss of institutional investor interest .

On February 13, 2023, we held a special meeting of stockholders at which the stockholders approved an amendment to the Company’s certificate of incorporation to implement a reverse split of our common stock (the “Reverse Stock Split”) which became effective February 15, 2023.

The purpose of the Reverse Stock Split was to seek to increase the price of the common stock and thereby to regain compliance with the minimum closing bid price of $1.00 per share for 10 consecutive trading days as required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5450 (a)( 1 ) (the “ Bid Price Rule”).

On March 6, 2023, we received a letter from Nasdaq confirming that our common stock had regained compliance with the Bid Price Rule, and as a result, our common stock will continue to be listed on the Nasdaq Capital Market.

Any Nasdaq action relating to a delisting could have a negative effect on the price of our common stock, impair the ability to sell or purchase our common stock when persons wish to do so, and any such delisting action may materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all.

Delisting from the Nasdaq Capital Market could also have other negative results, including the potential loss of institutional investor interest and fewer business development opportunities.

In the event of any delisting or potential delisting, we may attempt to take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to remain listed or be re-listed, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Bid Price Rule or prevent future non-compliance with Nasdaq’s listing requirements.

We are currently subject to securities class action lawsuits against us, which could result in adverse outcomes.

As described in Item 3.

Legal Proceedings, we and certain of our present and past directors and officers have been named in putative securities class action lawsuits alleging violations of the Securities Act of 1933, or Securities Act, and the Exchange Act.

We are generally required to indemnify our current and former directors and officers who are named as defendants in these types of lawsuits.

7 unchanged sentences

An active, liquid and orderly market for our common stock may not continue to be sustained, and our stockholders may not be able to resell their shares at a desired market price and could lose all or part of their investment.

Although our common stock is listed on the Nasdaq Global Select Market, or Nasdaq, we cannot assure you that an active, liquid trading market for our shares will continue to be sustained.

Although our common stock is listed on the Nasdaq, we cannot assure you that an active, liquid trading market for our shares will continue to be sustained.

A public trading market having the desired characteristics of depth, liquidity, and orderliness depends upon the presence in the marketplace and independent decisions of willing buyers and sellers of our common stock, over which we have no control.

7 unchanged sentences

We are an “emerging growth company, ” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 ( “ Sarbanes-Oxley Act ” ), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions.

23 unchanged sentences

In addition, these provisions would apply even if we were to receive an offer that some stockholders may consider beneficial.

We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law.

We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law (or the DGCL).

Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years, or, among other exceptions, the board of directors has approved the transaction.

1 unchanged sentence

Our certificate of incorporation and bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the Delaware General Corporation Law, or the DGCL, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that:

In addition, as permitted by Section 145 of the DGCL, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that:

we will indemnify our directors and officers for serving us in those capacities, or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.

3 unchanged sentences

we will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification;

the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons;

we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees, and agents.

4 unchanged sentences

Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in the market value of our common stock.

There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.

There is no guarantee that our common stock will appreciate or maintain the price at which our holders have purchased it.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware, or Chancery Court, and the federal district courts of the United States will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

2 unchanged sentences

any action asserting a breach of fiduciary duty;

any action asserting a claim against us arising under the Delaware General Corporation Law, our certificate of incorporation, or our bylaws;

any action asserting a claim against us arising under the DGCL, our certificate of incorporation, or our bylaws;

• any action asserting a claim against us that is governed by the internal-affairs doctrine, in each case provided that the Chancery Court has subject matter jurisdiction.

1 unchanged sentence

This exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

Our certificate of incorporation further provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, although stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by such act or the rules and regulations promulgated thereunder.

The enforceability of similar choice of forum provisions in some other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any action, a court could find the choice of forum provisions contained in our certificate of incorporation to be inapplicable or unenforceable.

1 unchanged sentence

As a publicly traded company, we have incurred, and will continue to incur, significant legal, accounting, and other expenses that we did not incur as a private company.

In addition, the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), as well as rules subsequently implemented by the SEC and Nasdaq, have imposed various requirements on public companies.

In addition, the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act ” ), as well as rules subsequently implemented by the SEC and Nasdaq, have imposed various requirements on public companies.

Shareholder activism, the current political environment, and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

7 unchanged sentences

The trading price of our common stock could be highly volatile and could be subject to wide fluctuations in response to various factors, including factors which are beyond our control.

These factors include those discussed in the other “Risk Factors” section of this Report on Form 10-K and others such as:

These factors include those discussed in the other “Risk Factors” section of this Annual Report and others, such as:

our operating results and financial position;

2 unchanged sentences

announcements of new products by us or our competitors;

adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities;

adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain, or sales and marketing activities for our products;

changes or developments in laws or regulations applicable to our products;

2 unchanged sentences

any intellectual property infringement actions in which we may become involved;

announcements concerning our competitors or the medical device industry in general;

announcements concerning our competitors or the medical device and wellness industries in general;

achievement of expected product sales and profitability;

3 unchanged sentences

FDA or other U.S.

or foreign regulatory actions affecting us or our industry or other healthcare reform measures in the United States;

or foreign regulatory actions affecting us or our industry, or other healthcare reform measures in the U.S.;

changes in financial estimates or recommendations by securities analysts;

11 unchanged sentences

The trading market for our common stock is influenced by the research and reports that industry or securities analysts may publish about us or our business.

If any of the analysts who cover us were to cease publishing research or reports about our business or were to issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our operating results fail to meet the expectations of analysts, our stock price would likely decline.

If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

If any of the analysts who cover us were to cease publishing research reports about our business or were to issue an adverse or misleading opinion regarding us, our business model, our intellectual property, or our stock performance, or our stock price, if our operating results fail to meet the expectations of analysts, would likely decline.

If one or more of these analysts cease coverage of us or fail to publish research reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.

Certain of our former unit holders, including entities affiliated with certain of our directors and former directors, purchased common stock in our IPO at the IPO price per share.

Shares which are held by our directors, executive officers and other affiliates may be subject to restrictions under Rule 144 of the Securities Act, among other restrictions that make such shares not freely tradable.

Shares that are held by our directors, executive officers, and other affiliates may be subject to restrictions under Rule 144 of the Securities Act, among other restrictions that make such shares not freely tradable in the United States.

If these additional shares of common stock are sold pursuant to the applicable exemptions from such restrictions, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

1 unchanged sentence

federal income tax reform could adversely affect us.

New legislation or regulation which could affect our tax burden could be enacted by a governmental authority.

We cannot predict the timing or extent of such tax-related developments which could have a negative impact on our financial results.

New legislation or regulation that could affect our tax burden could be enacted by a governmental authority.

We cannot predict the timing or extent of such tax-related developments that could have a negative impact on our financial results.

federal legislation affecting the tax laws was enacted in December 2017, in the Tax Cuts and Jobs Act;

2 unchanged sentences

and in March 2021 in the American Rescue Plan Act of 2021.

The TCJA, among other things, includes changes to U.S.

The Tax Cuts and Jobs Act, among other things, includes changes to U.S.

federal tax rates, imposes significant additional limitations on the deductibility of interest, allows for the expensing of capital expenditures, and puts into effect the migration from a “worldwide” system of taxation to a modified territorial system.

There can be no assurance that the TCJA will not negatively impact our operating results, financial condition, or our future business operations.

This Report on Form 10-K does not discuss any such tax legislation or the manner in which it might affect purchasers of our common stock.

There can be no assurance that the Tax Cuts and Jobs Act will not negatively impact our operating results, financial condition, or our future business operations.

This Annual Report does not discuss any such tax legislation or the manner in which it might affect purchasers of our common stock.

We urge our stockholders to consult with their legal and tax advisors with respect to such legislation and the potential tax consequences of investing in our common stock.

New legislation or regulation which could affect our tax burden could be enacted by any governmental authority.

We cannot predict the timing or extent of such tax-related developments which could have a negative impact on our financial results.

Additionally, we use our best judgment in attempting to quantify and reserve for these tax obligations.

3 unchanged sentences

Activist campaigns that contest or conflict with our strategic direction or seek changes in the composition of our board of directors could have an adverse effect on our operating results and financial condition.

A proxy contest would require us to incur significant legal and advisory fees, proxy solicitation expenses and administrative and associated costs and require significant time and attention by our board of directors and management, diverting their attention from the pursuit of our business strategy.

A proxy contest would require us to incur significant legal and advisory fees, proxy solicitation expense and administrative and associated costs and require significant time and attention by our board of directors and management, diverting their attention from the pursuit of our business strategy.

Any perceived uncertainties as to our future direction and control, our ability to execute on our strategy, or changes to the composition of our board of directors or senior management team arising from a proxy contest could lead to the perception of a change in the direction of our business or instability, which may result in the loss of potential business opportunities, make it more difficult to pursue our strategic initiatives, or limit our ability to attract and retain qualified personnel and business partners, any of which could adversely affect our business and operating results.

1 unchanged sentence

We may choose to initiate, or may become subject to, litigation as a result of the proxy contest or matters arising from the proxy contest, which would serve as a further distraction to our board of directors and management and would require us to incur significant additional costs.

In addition, actions such as those described above could cause significant negative or other fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

In addition, actions such as those described above could cause significant fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors