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Item 9A. Controls and Procedures

2024-03-13 compared with 2023-03-08 · 981 added, 364 removed, 614 unchanged (69% of the section changed)

4 unchanged sentences

As required by Rule 13 a- 15 (b) of the Exchange Act, an evaluation as of December 31, 2023 , was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13 a- 15 (e) under the Exchange Act).

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2022 , were effective for the purposes stated above.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2023 , were not effective for the reasons stated below.

Management’s Report on Internal Control Over Financial Reporting

7 unchanged sentences

As of December 31, 2023, our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework ( 2013 ).

Based on this evaluation, our management concluded that, as of December 31, 2022 our internal control over financial reporting was effective.

Based on this evaluation, our management concluded that, as of December 31, 2023 our internal control over financial reporting was not effective for the reason stated in the following paragraph.

In October 2023, and as disclosed in our Form 10-Q for the quarterly period ended September 30, 2023, it was determined that our internal controls over vendor management, as designed, would not have timely prevented an unauthorized payment based on incorrect vendor information from occurring.

As such, we concluded that a material weakness exists in our internal controls over financial reporting.

This material weakness did not result in any identified misstatement, and there were no changes to previously reported financial results.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Remediation Plan for the Material Weakness

Management is committed to the remediation of the material weakness described above beginning in the fourth quarter of 2023, management implemented and will continue to implement measures designed to ensure that the control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively.

Remediation efforts include but are not limited to (a) enhance processes and procedures around payment security, (b) verifying changes to vendor information on a timely basis, and (c) using alternate channels to verify changes to vendor payment information.

Management will test and evaluate the implementation of internal controls and revised processes to ascertain whether they are designed and operating effectively to provide reasonable assurance that they will prevent or detect a material error in our financial statements.

The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that controls are operating effectively.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2022 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

Except for our remediation efforts describes above, there was no change in our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the three months ended December 31, 2023 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

Other Information

Annual Meeting Matters

On March 3, 2023, our Board of Directors determined that the date of our 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”) will be Monday, August 4, 2023.

The 2023 Annual Meeting is expected to be a virtual-only meeting conducted via remote communications.

The record date, time, and meeting website information for the 2023 Annual Meeting will be set forth in a proxy statement for the 2023 Annual Meeting, which will be filed prior to the 2023 Annual Meeting with the Securities and Exchange Commission.

Due to the fact that the meeting date for the 2023 Annual Meeting is advanced more than 30 days prior to the anniversary of our 2022 Annual Meeting which was held on December 2, 2022, we are providing the timelines for stockholder proposals and director nominations for the 2023 Annual Meeting.

• For stockholder proposals to be presented for inclusion in the Company’s proxy materials for the 2023 Annual Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the “Exchange Act”), they must be received not later than March 22, 2023;

• For stockholder proposals not for inclusion in the Company’s proxy materials for the 2023 Annual Meeting, they must be received between April 6, 2023 and May 5, 2023;

• For director nominations by stockholders not soliciting proxies, they must be received between April 6, 2023 and May 5, 2023;

• For director nominations by stockholders soliciting proxies, they must be received no later than June 5, 2023.

Any of the foregoing proposals or nominations must be delivered to, or mailed and received by, the Company’s Corporate Secretary at the principal executive offices of the Company at 200 Forge Way, Suite 205, Rockaway, NJ 07866, in writing and in proper form, and must set forth the information required by the Company’s amended and restated bylaws and applicable requirements under the Exchange Act rules.

Elimination of Series A Preferred Stock.

On March 6, 2023 , we filed a certificate of elimination (the “Certificate of Elimination”), with the Secretary of State of the State of Delaware with respect to the Series A Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”), that had been authorized and designated for issuance by our board on December 2, 2022.

At the time of filing of the Certificate of Elimination, no shares of Series A Preferred Stock were outstanding.

All previously issued shares of Series A Preferred Stock were redeemed pursuant to their terms on February 13, 2023.

The Certificate of Elimination eliminated the previous designation of 80,000 shares of Series A Preferred Stock from our certificate of incorporation, and caused such previously designated shares to resume their status as authorized but unissued and non-designated shares of preferred stock.

On March 8, 2024, the Board appointed Charles S.

Theofilos, M.D., to serve as a member of the Compensation Committee and the Nominating and Governance Committee.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated herein by reference to the information that will be contained in our proxy statement related to the 2023 Annual Meeting of Stockholders or an amendment to this Annual Report, which we intend to file with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G( 3 ) of Form 10-K.

Directors, Executive Directors, Executive Officers and Corporate Governance

Since our initial public offering (the “IPO”) in 2018, our Board has been divided into three classes, each elected for a three-year term.

The classification results in staggered elections, with a different class of directors standing for election every year.

Set forth below is the name, age as of December 31, 2023, and certain biographical information with respect to each of our current directors, by class.

Class III Directors (Terms Expiring in 2024)

Peter Cuneo, 79, has served as a member of the Board since April 2020 and been the Chairman of the Board since October 2021.

He currently serves as a managing principal of Cuneo & Company LLC, a private investment and management company that he founded.

He previously served as executive chairman of CIIG Capital Partners II, a special acquisition corporation listed on Nasdaq, from September 2022 until April 2023 following the completion of the business combination with Zapp Electric Vehicles, Inc.

He was the chairman of Arrival Ltd., a global electric vehicle company, from September 2021 until February 2023.

Cuneo’s past experience includes serving as chief executive officer of Marvel Entertainment Inc.

and as vice chairmen until its sale to The Walt Disney Company in 2009, and served on the board of Iconix Brand Group from 2007 through 2021.

Earlier in his career, he successfully led three turnarounds, first as president of Clairol’s Personal Care Division, as president of Black and Decker’s Security Hardware Group, and as chief executive officer of Remington Products.

Previously, he also served as president of Bristol-Meyers Squibb Co.’s pharmaceutical group in Canada.

Cuneo’s board experience includes serving as chairman of Valiant Entertainment from 2012 to 2018 following Cuneo & Company LLC’s investment in the company.

He currently serves as chairman emeritus of the Alfred University Board of Trustees and served on the board of the National Archives Foundation in Washington, D.C.

Cuneo holds an M.B.A.

from Harvard Business School, a B.S.

from Alfred University and was a Lieutenant in the United States Navy, having served two deployments during the Vietnam War.

The Board believes that Mr.

Cuneo’s extensive business and financial background, including his significant consumer-focused expertise, qualify him to serve on the Board.

Gandolfo, 63, has served as a member of the Board since April 2020.

He brings to the Board more than 30 years of financial leadership at both public and private companies across multiple industry sectors, including in expense control and cash flow optimization Since 2018, he has served as chief financial officer of Eyenovia, Inc., a publicly held, late clinical stage biopharmaceutical company focusing on the development of ophthalmic drugs.

Prior to Eyenovia, he served as chief financial officer of Xtant Medical Holdings, Inc., a publicly held orthopedic and spine medical device company with multiple operations throughout the United States from 2010 to 2017.

He has served on the board of Oragenics, Inc, a development-stage company dedicated to fighting infectious diseases including coronaviruses and multidrug-resistant organisms, since September 2023.

His prior healthcare-related experience includes roles as chief financial officer of Progenitor Cell Therapy LLC, Power Medical Interventions and Bioject, Inc., among others.

Gandolfo’s experience also includes serving on the audit committees of the boards of multiple medical technology companies including Odyssey Health, Inc., a medical device company which he has served as a director since 2019.

Gandolfo holds a B.A.

in business administration from Rutgers University.

The Board believes that these experiences, and his ability to serve as a financial expert on our audit committee, qualify him to serve on the Board.

Charles Theofilos , M.D.

Theofilos, M.D., 62, has served as a member of the Board since December 2023.

Theofilos is a retired neurosurgeon who founded The Spine Center in Palm Beach Gardens, Florida in 1996.

He also founded and serves as president of Theo Concepts, LLC and founder of The Theo Group, a family office.

Previously, he served as co-director of the Neuroscience Center, chairman of Neurosurgery, and Chairman of Cranial and Spinal Surgery, at JFK Medical Center in Atlantis, Florida, director of Spine Surgery at Jupiter Medical Center, and chairman of Neurosurgery at Palm Beach Gardens Medical Center.

Theofilos has been a founder, director and/or investor in a number of early-stage medical device and healthcare companies, including K2Medical, SpineCore LLC and electroCore, LLC, our predecessor.

Theofilos received an M.D.

from Emory University School of Medicine, a B.A.

in biology from Emory University, and a GMP (General Management Program) from The Wharton School of The University of Pennsylvania.

The Board believes Dr.

Theofilos is qualified to serve on the Board due to his long tenure as a practicing physician and neuro-surgeon, as well as serving as a co-founder, director and investor in a number of successful early stage medical device and healthcare companies.

Class I Directors (Terms Expiring in 2025)

Goldberger, 65, has served as our Chief Executive Officer and a member of the Board since October 2019.

Goldberger served as a director of Koru Medical Systems, a manufacturer of infusion pump systems, from April 2017 until May 2022 and he served as its executive chairman from August 2017 until September 2019.

From January 2018 to September 2019, Mr.

Goldberger served as the chief executive officer of Synergy Disc Replacement Inc., a private company commercializing a proprietary total disc implant for cervical spine therapy.

From July 2017 to September 2017, Mr.

Goldberger served as chief executive officer of Milestone Medical, Inc.

Prior to this he served as the chief executive officer of Xtant Medical Holdings, Inc.

from August 2013 to January 2017.

He also served on the board and as the chief executive officer of Sound Surgical Technologies LLC from April 2007 to February 2013.

Goldberger has also served on the boards of Xtant Medical Holdings, Inc., Sound Surgical, Xcorporeal.

Theragen, Inc., and Glucon.

Goldberger earned a B.S.

in mechanical engineering from The Massachusetts Institute of Technology, and a M.S.

in mechanical engineering from Stanford University.

The Board believes that Mr.

Goldberger’s extensive senior management experience in the medical device industry, including as our Chief Executive Officer, qualify him for service on the Board.

Goldstein, 65, has served as a member of the Board since March 2022.

Goldstein has more than 30 years of leadership expertise in product, media and entertainment marketing, which spans a career in radio, television, music and theater.

Goldstein’s specific expertise includes operations, sales development, advertising, and project management.

She has also spearheaded many major national and international marketing campaigns.

She was a producer for the Broadway musical First Date from 2013 to 2014.

At music labels JIVE Records, RCA Records, and Virgin Records, she served as vice president of marketing and development.

She also held the position of vice president of marketing and sales at NewsCorp / TV Guide Television Network and began her career in radio marketing.

Her expertise around spending and strategic marketing techniques contributed to RCA’s turnaround.

She received the Billboard Magazine’s Radio Promotion Director of the Year, Bertelsmann Key Management Award, and Virgin Records Promotion Director of the Year.

Goldstein holds a B.A.

in communications and social welfare from California State University at Chico.

The Board believes Ms.

Goldstein’s extensive media and marketing expertise qualifies her to serve on the Board.

Patricia Wilber

Patricia Wilber, 62, has served as a member of the Board since March 2022.

Wilber has been a chief marketing officer, global business strategist, and board member who delivers organizational and cultural transformation for branding.

She is a pioneer in new franchise models and branded partnerships.

Wilber last served as the executive vice president, chief marketing officer, and managing director of partnerships, EMEA, the highest position in the marketing department at The Walt Disney Company from 2015 to 2018, where she drove growth for Disney’s marquee brands by leading marketing and communications for Disney, Pixar, Star Wars, and Marvel.

Additionally, she established and led EMEA’s 40-country integrated marketing, franchise and partnership functions, including a major reorganization of the EMEA channels to boost growth and profitability by significantly reducing expenses.

Wilber has also served as a member of the board of Zapp Electric Vehicles, Group, Ltd., since October 2022.

She also currently serves on the board of the medical nonprofit organizations, Vibrant Emotional Health and Yale New Haven Hospital.

She served on the board of Euro Disney SCA from 2015 to 2018, and Magical Cruise Company, more commonly known as the Disney Cruise Line from 2013 to 2018.

Wilber holds a B.A.

in history from Brown University.

The Board believes Ms.

Wilber’s strategic marketing expertise and public company board experience qualify her to serve on the Board.

Class II Directors (Terms Expiring in 2026)

Errico, M.D., 72, is a founder of our company and has served as a member of the Board since 2005.

Errico has been a board-certified orthopedic surgeon since 1986, and currently serves as a pediatric orthopedic spine surgeon at Nicklaus Children’s Hospital.

He served as the chief, Division of Spine Surgery in Orthopedics, at NYU Langone Health from 1997 until 2018.

He currently serves on the board of Setting Scoliosis Straight, a nonprofit organization focused on advancing medical techniques in the treatment of spinal deformities and is also an adjunct professor of the Department of Orthopaedic Surgery at NYU Grossman School of Medicine.

In addition, Dr.

Errico is a member of the International Society for the Advancement of Spine Surgery, and served as its president from 2010 to 2011.

He is also an original member of the North American Spine Society, and served as its president from 2003 to 2004.

Errico has founded multiple companies in the healthcare industry, including Spinecore, Inc.

in 2001, where he served as a director until it was sold to Stryker, Inc.

Errico was also a founding member of K2M Group Holdings, Inc.

in January 2004.

Errico holds a B.S.

in zoology from Rutgers University and an M.D.

from Rutgers Medical School, formerly the University of Medicine and Dentistry of New Jersey.

The Board believes Dr.

Errico is qualified to serve on the Board due to his long tenure as a practicing spine-surgeon and his leadership role with world-class medical institutions, as well as serving as a co-founder, director and investor in a number of successful early-stage healthcare companies.

Patton, 60, has served as a member of the Board since April 2020.

He is a seasoned healthcare executive and board member with operational, strategic, financial, legal, compliance and transactional experience, from start-ups to growth companies, both public and private.

He currently is an advisor to the private equity firm SV Health Investors and serves on the board of the Connecticut Port Authority and is co-chair of its audit committee.

He was the chief executive officer and member of the board of directors of Ximedica, LLC, a private medical products outsource design and development company from August 2020 to May 2021.

From 2015 to 2021, he also served on the board of Misonix, Inc., a publicly traded ultrasonic surgical tools and wound care company, and chaired that company’s audit committee, from October 2015 to November 2021 and served as president and chief executive officer of CAS Medical Systems, a publicly traded developer and distributor of patient monitoring equipment, from 2010-2019.

His prior experience includes roles as co-founder, president and chief executive officer of QDx, Inc., a developer of unique micro-fluidic diagnostic technology utilizing digital imaging techniques for hematologic analysis, as president and chief operating officer of Novametrix Medical Systems, Inc., and as chief executive officer of Wright Medical Technology, Inc.

Patton has served on more than a dozen boards of directors for both public and private medical products and services companies.

Patton holds a B.A.

in economics from Holy Cross University and J.D.

from Georgetown University Law Center.

The Board believes that Mr.

Patton’s business and financial experience, as well as his medical device industry expertise and ability to serve as an “audit committee financial expert,” qualify him to serve on the Board.

Demographic Background

The Board is committed to having diverse individuals from different backgrounds with varying perspectives, professional experience, education and skills serving as members of the Board.

The Board believes that a diverse membership with a variety of perspectives and experiences is an important feature of a well-functioning board.

Board Diversity

Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).

Board Diversity Matrix

Total Number of Directors

Gender Undisclosed

Number of directors who identify in any of the categories below:

African American or Black

Alaskan Native or American Indian

Hispanic or Latinx

Native Hawaiian or Pacific Islander

Two or more races or ethnicities

Of our eight directors, two (25%) identify as having at least one diversity characteristic (i.e., female, non-binary, LGBTQ+ and/or race or ethnicity other than white).

During 2021 and early 2022, the Nomination and Governance Committee made a concerted effort to recruit new diverse directors to the Board culminating in the appointment of Ms.

Goldstein and Ms.

Wilber in March 2022.

Executive Officers

Set forth below is the name, age as of March 13, 2024, and certain biographical information for our current executive officers other than our Chief Executive Officer, Daniel S.

Goldberger, whose information is set forth above in “Class I Directors (Terms Expiring in 2025).”

Posner, 62, has served as our Chief Financial Officer since April 2019.

He joined us from Cellectar Biosciences, where he served as chief financial officer from April 2018 to March 2019.

Prior to Cellectar, Mr.

Posner was chief financial officer at Alliqua BioMedical from 2013 to 2018, chief financial officer at Ocean Power Technologies from 2010 to 2013 and chief financial officer at Power Medical Interventions in 2009.

Before such time, Mr.

Posner spent nine years at Pharmacopeia from 1999 to 2008, where he served as director of finance before serving as chief financial officer from 2006 to 2008 upon Pharmacopeia’s acquisition by Ligand Pharmaceuticals.

Before his employment with Pharmacopeia, Mr.

Posner was chief financial officer and vice president of operations at Photosynthetic Harvest, a start-up biotechnology company, and regional chief financial officer at Omnicare.

Posner began his career as an audit supervisor at Coopers & Lybrand, which merged with Price Waterhouse to become PricewaterhouseCoopers.

Posner earned an M.B.A.

in managerial accounting from Pace University’s Lubin School of Business and a B.A.

in accounting from Queens College.

Executive officers serve at the pleasure of our Board of Directors.

Corporate Governance

Board Operating and Governance Guidelines

We have adopted Corporate Governance Guidelines to assure that the Board has the necessary authority and practices in place to review and evaluate our business operations as needed and can make decisions that are independent of our management.

The guidelines are also intended to align the interests of directors and management with those of our stockholders.

The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to board composition and selection, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees and compensation.

The Corporate Governance Guidelines, as well as the charters for each committee of the Board, are available on our website at www.electrocore.com.

Board Leadership Structure

The Board has an independent chairman, Mr.

Cuneo, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board.

Accordingly, the Board Chairman has substantial ability to shape the work of the Board.

We believe that separation of the positions of Board Chairman and Chief Executive Officer reinforces the independence of the Board in its oversight of the business and affairs of us.

In addition, we believe that having an independent Board Chairman creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of our company and our stockholders.

As a result, we believe that having an independent Board Chairman enhances the effectiveness of the Board as a whole.

There are no family relationships among any of our directors and executive officers nor have any of our executive officers or key employees been involved in a legal proceeding that would be required to be disclosed pursuant to Item 401(f) of Regulation S-K of the Exchange Act.

Role of the Board In Risk Oversight

One of the key functions of the Board is informed oversight of our risk management process.

The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various standing committees of the Board that address risks inherent in their respective areas of oversight.

In particular, the Board is responsible for monitoring and assessing strategic risk exposure and our audit committee is responsible for considering and discussing our major financial risk exposures and our risk assessment and risk management policies (including those related to data privacy, data security and cybersecurity).

Our audit committee also periodically reviews the general process for the oversight of risk management by the Board.

The nominating and governance committee monitors compliance with legal and regulatory requirements and the effectiveness of tour corporate governance practices, including whether they are successful in preventing illegal or improper liability-creating conduct.

Our nominating and governance committee is responsible for overseeing key aspects of our general risk management efforts, including the allocation of risk management functions among the Board and its committees.

Our compensation committee is responsible for assessing and monitoring whether any of the our compensation policies and programs has the potential to encourage excessive risk-taking.

Meetings of the Board Of Directors

The Board met 11 times during 2023.

Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the committee(s) on which he or she served that were held during the portion of 2023 for which he or she was a director or committee member.

Nasdaq rules require that the non-management directors of the board meet at regularly scheduled executive sessions, without management present, in order to empower the non-management directors to serve as a more effective check on management.

During 2023, our non-management directors met in executive session, without management present, at the end of regularly scheduled board meetings or during scheduled executive session calls.

Cuneo, our Board Chairman, presided over the executive sessions.

Nominating and Governance Committee

Our nominating and governance committee currently consists of four directors, Dr.

Goldstein, Dr.

Theofilos and Ms.

Errico is the chairman of the nominating and governance committee.

In the opinion of the Board, the composition of our nominating and governance committee satisfies the applicable independence requirements under, and the functioning of our nominating and governance committee complies with, the applicable requirements of Nasdaq.

The Board also believes that each member of our nominating and governance committee satisfies the applicable independence requirements of the Nasdaq.

We will continue to evaluate and will comply with all future requirements applicable to our nominating and governance committee.

The nominating and governance committee’s responsibilities include:

annually reviewing the list of director selection criteria contained in our corporate governance guidelines, and making recommendations to the Board regarding necessary or appropriate changes thereto;

identifying, reviewing and evaluating candidates, including candidates submitted by stockholders, for election to the Board and recommending to the Board (i) nominees to fill vacancies or new positions on the Board and (ii) the slate of nominees to stand for election by our stockholders at each annual meeting of stockholders;

annually recommending to the Board (i) the assignment of directors to serve on each committee;

(ii) the chairman of each committee and (iii) the chairman of the Board or lead independent director, as appropriate;

developing, recommending, overseeing the implementation of and monitoring compliance with, our corporate governance guidelines, and periodically reviewing and recommending any necessary or appropriate changes thereto;

reviewing the adequacy of our certificate of incorporation and bylaws and recommending to the Board, as conditions dictate, amendments for consideration by the stockholders;

and such other matters as directed by the Board.

The nominating and governance committee believes that candidates for director should have certain minimum qualifications, which are described in our Corporate Governance Guidelines.

The nominating and governance committee also takes these minimum qualifications into account in identifying and evaluating director nominees, including nominees validly recommended by stockholders.

In identifying director nominees, the nominating and governance committee strives for a diverse mix of backgrounds and expertise that enhances the ability of the directors collectively to understand the issues facing us and to fulfill the responsibilities of the Board and its committees.

For example, during 2021 and early 2022, the Board and the Committee made a concerted effort to recruit diverse directors to the Board culminating in the appointment of Ms.

Goldstein and Ms.

Wilber in March 2022.

Audit Committee

Our audit committee reviews our internal accounting procedures and consults with and reviews the services provided by our independent registered public accountants.

Our audit committee currently consists of three directors, Mr.

Gandolfo, Mr.

Patton and Ms.

Patton is the chairman of the audit committee, and it is the opinion of the Board that Mr.

Gandolfo and Mr.

Patton are each an “audit committee financial expert” as defined by SEC rules and regulations.

The Board has determined that each of the members of our audit committee is independent under Nasdaq listing rules and under Rule 10A-3 under the Exchange Act.

We intend to continue to evaluate and comply with the requirements applicable to the audit committee.

The principal duties and responsibilities of our audit committee include:

appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm;

discussing with our independent registered public accounting firm their independence from management and us;

reviewing with our independent registered public accounting firm the scope and results of their audit;

approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm and related fees;

overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC;

reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements;

establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal control or auditing matters;

reviewing our code of business conduct and ethics and recommending any changes to the Board;

reviewing and approving certain related party transactions;

discussing our major financial risk exposures (including those related to data privacy, cybersecurity data security and network security) and management's program to monitor, assess and control such exposures, including our risk assessment and risk management policies.

Compensation Committee

Our compensation committee reviews and determines the compensation of our executive officers.

Our compensation committee currently consists of four directors, Dr.

Gandolfo, Ms.

Goldstein and Dr.

Theofilos, each of whom is a non-employee member of the Board as defined in Rule 16b-3 under the Exchange Act.

Gandolfo is the chairman of the compensation committee.

The Board is of the opinion that the composition and functioning of our compensation committee satisfies the applicable independence and other applicable requirements of Nasdaq and SEC rules and regulations.

We intend to continue to evaluate and comply with the requirements applicable to our compensation committee.

The principal duties and responsibilities of our compensation committee include:

establishing, approving, and making recommendations to the Board regarding performance goals and objectives relevant to the compensation of our Chief Executive Officer, evaluating the performance of our Chief Executive Officer in light of those goals and objectives and recommending to the full Board for approval, the chief executive officer’s compensation, including incentive-based and equity-based compensation, based on that evaluation;

setting the compensation of our other executive officers, based in part on recommendations of the chief executive officer;

reviewing, approving, and making recommendations to the Board regarding employment agreements, severance arrangements and change of control agreements for the Chief Executive Officer and other executive officers, as appropriate;

exercising administrative authority under our stock plans and employee benefit plans;

establishing policies and making recommendations to the Board regarding director compensation;

review, approve and oversee the policies and procedures in connection with any compensation clawback policy;

reviewing compensation plans, programs and policies;

handling such other matters that are specifically delegated to the compensation committee by the Board from time to time.

The compensation committee meets regularly in executive session without management present.

However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the compensation committee to make presentations, to provide financial or other background information or advice or to otherwise participate in compensation committee meetings.

The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the compensation committee regarding his compensation or individual performance objectives.

The charter of the compensation committee grants the compensation committee the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it will deem appropriate.

In addition, under its charter, the compensation committee has the authority to select, retain and terminate, at our expense, advice and assistance from any consultants, independent legal counsel or other advisors.

The compensation committee also considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the efficacy of our compensation strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at various meetings throughout the year.

For executives other than the Chief Executive Officer, the compensation committee solicits and considers evaluations and recommendations submitted to the compensation committee by the Chief Executive Officer with respect to individual employee performance.

In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the compensation committee with input from other independent Board members, which recommends to the Board any adjustments to his compensation as well as awards to be granted as part of its deliberations, the compensation committee may review and consider, as appropriate, materials such as financial reports and projections, operational data, tax and accounting information, tally sheets that set forth the total compensation that may become payable to executives in various hypothetical scenarios, executive and director share ownership information, stock performance data, analyses of historical executive compensation levels and current Company-wide compensation levels and recommendations of a compensation consultant, including analyses of executive and director compensation paid at other companies identified by the consultant, or otherwise considered by the Committee, to be comparable to us.

During the year ended December 31, 2023 and 2022, the compensation committee in its discretion did not engage a compensation consultant.

Information Regarding Committees of the Board of Directors

The Board has three committees:

an audit committee, a compensation committee and a nominating and governance committee.

The following table provides membership and meeting information for 2023 for each of the Board committees.

Audit Committee

Committee (1)

Nominating and Governance Committee (1)

Peter Cuneo (2)

Julie Goldstein

Patricia Wilber

Number of meetings in 2023

*Committee Chair

(1) Charles S.

Theofilos, M.D., was appointed to the Compensation Committee and the Nominating and Governance Committee on March 8, 2024.

Cuneo, our Chairman of the Board, resigned from the Nominating and Governance Committee effective August 4, 2023.

Moody resigned from the Board and its committees effective August 4, 2023.

Director Nominating Procedures

The Nominating and Governance Committee assists our Board in identifying director nominees consistent with criteria established by our Board.

Although the Nominating and Governance Committee does not currently have a specific policy with regard to consideration of director candidates recommended by stockholders, the Board and the Nominating and Governance Committee believe that the Nominating and Governance Committee generally would provide valid recommendations the same consideration as other candidates.

Any recommendation submitted by a stockholder to the Nominating and Governance Committee should include information relating to each of the qualifications outlined below concerning the potential candidate along with the other information required by the rules of the SEC, our Bylaws for stockholder nominations, and the Corporate Governance Guidelines available on our website.

Generally, nominees for director are identified and suggested to the Nominating and Governance Committee by our current directors or management using their business networks and evaluation criteria they deem important, which may or may not include diversity.

While we do not have a specific policy regarding diversity and has not established minimum experience or diversity qualifications for director candidates, when considering the nomination of directors, the Nominating and Governance Committee does generally consider the diversity of its directors and nominees in terms of knowledge, experience, background, skills, expertise and other demographic factors.

We do not impose formal term limits on its directors.

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our shares of common stock and other equity securities.

Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports furnished to it and written representations that no other reports were required, during the fiscal year ended December 31, 2023, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with except for one inadvertent late filing of a report relating to the purchase of common stock in March 2023 by Dr.

Code Of Business Conduct And Ethics For Employees, Executive Officers And Directors

We have adopted a Code of Business Conduct and Ethics, (the “Code of Conduct”) applicable to all of our employees, executive officers and directors.

The Code of Conduct is available on our website at www.electrocore .com, under the “Corporate Governance” tab of the “Investors” section.

The audit committee of the Board is responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for executive officers and directors.

We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website.

A copy of the Code of Conduct may be provided to any person without charge upon written request to:

electroCore, Inc., Attn:

Corporate Secretary, 200 Forge Way, Suite 205, Rockaway, NJ 07866.

Executive Compensation

Named Executive Officers Summary Compensation Table

The Company is currently subject to the scaled reporting rules of the SEC applicable to smaller reporting companies.

The following section and notes describe, under such scaled reporting rules, information for the fiscal years ended December 31, 2023 and 2022, concerning the compensation awarded to, earned by or paid to:

(i) our principal executive officer during the fiscal year ended December 31, 2023, and (ii) the most highly compensated executive officer, other than the principal executive officer, during the fiscal year ended December 31, 2023 (collectively, the “NEOs”).

Our only executive officers are our Chief Executive Officer (the “CEO”) and our Chief Financial Officer.

Summary Compensation Table

Name and Principal Position

Stock Awards ($)

Option Awards

Non-equity incentive plan compensation

All Other Compensation

Chief Executive Officer

Chief Financial Officer

Bonuses in this column represent discretionary cash bonuses approved by the Board and/or compensation committee of the Board for 2023 or 2022, as applicable.

Includes the value of stock options determined using the grant date fair value computed in accordance with FASB ASC 718.

See Note 11 to the consolidated financial statements of the Company for the fiscal year ended December 31, 2023 in this Form 10-K for additional description of the assumptions used in the valuation.

Amounts in this column do not reflect the actual economic value that may be realized by the applicable NEO.

On April 17, 2023, Mr.

Goldberger voluntarily relinquished the Option Awards granted to him on October 1, 2019, January 25, 2021, and January 17, 2022.

These amounts consist of payments of health care premiums, contributions to health savings accounts, and employer 401(k) contributions.

Executive Compensation Philosophy

We review compensation annually for all employees, including our NEOs.

Our compensation philosophy is centered around two key tenets:

(1) building long-term value for our stockholders, and (2) driving employee engagement.

To that end, our executive compensation program is grounded in the following principles:

Attraction Engagement:

Enable us to attract highly-talented people with exceptional leadership capabilities and engage high-caliber talent.

Competitiveness:

Provide total compensation opportunity levels that are competitive with those being offered to individuals holding comparable positions at other companies with which we compete for business and leadership talent.

Stockholder Alignment

Deliver majority of compensation through pay elements that are designed to create long-term value for our stockholders, as well as foster a culture of ownership.

The Decision-Making Process

In establishing NEO compensation (base salaries, bonuses and annual equity incentive awards), we consider the following:

the relative importance of each NEO’s role and responsibilities;

how the NEO has performed relative to these roles and responsibilities;

overall company performance;

compensation for comparable positions in the market (as defined by a combination of identified industry comparables and industry/size-specific survey data).The compensation committee oversees the executive compensation program for our NEOs.

The committee may work closely with an independent consultant and management to examine the effectiveness of our executive compensation program throughout the year and seeks to ensure that the executive compensation program supports our business goals and aligns with stockholder interests.

Our compensation committee is responsible for the review and approval of compensation for all executive officers other than the CEO.

Our compensation committee typically reviews and discusses management’s proposed compensation with the CEO for all executives other than the CEO.

For the CEO, the compensation committee reviews and recommends to the Board for approval annual compensation elements, including bonus targets and associated performance goals.

Based on those discussions and after receiving recommendations from the compensation committee, the Board, in its discretion and without members of management participating, ultimately sets compensation for the CEO.

Clawback Policy

We recently adopted a written compensation recovery policy in accordance with applicable Nasdaq rules, a copy of which is filed as an exhibit to this Annual Report on Form 10-K.

The policy generally provides that we will seek to recover any incentive-based compensation erroneously awarded to any current or former executive officer due to material noncompliance with any financial reporting requirement under the securities laws during the three completed fiscal years immediately preceding the date we determine that an accounting restatement is required.

Annual Base Salary

For 2022, Mr.

Goldberger received a base salary of $556,000 per annum, which was increased to $601,018 for 2023 and $631,000 for 2024.

For 2022, Mr.

Posner received a base salary of $387,000 per annum, which was increased to $415,000 for 2023 and $435,750 for 2024.

We offer our NEOs the opportunity to earn annual discretionary cash bonuses, as determined by the Board or the compensation committee annually at their discretion.

The CEO makes recommendations to the compensation committee regarding annual bonus payouts for the executive officers including our other NEOs and the CEO’s other direct reports.

With respect to the CEO’s bonus, the compensation committee makes a recommendation to the Board, both of which act without the participation of management including the CEO as to his own salary, bonus, and equity incentive decisions.

For 2023, annual bonuses were based on such factors as the Board and the compensation committee deemed appropriate, including peer group data considered appropriate by the compensation committee and a variety of individual and company priorities, objectives and achievements relating to 2023, as well as the individual NEOs ’ performance as it related to their areas of responsibility.

Long-Term Incentives

Our equity-based incentive awards are designed to align our interests with those of our employees and consultants, including our executive officers.

Our compensation committee is responsible for approving equity grants for executive officers other than the CEO.

As noted above, CEO equity awards are recommended by the compensation committee for approval by the Board.

Our executives generally are awarded an initial new hire grant upon commencement of employment.

Following the IPO, al l employee equity awards have been granted pursuant to the 2018 Omnibus Incentive Compensation Plan.

All options are granted with a per share exercise price equal to no less than the closing price of the common stock on the Nasdaq Stock Market on or immediately prior to the date of grant.

Our equity grants to employees generally vest over a three- or four-year period.

Equity Compensation

We generally have granted equity awards to our employees, including our NEOs, as the long-term incentive component of our compensation program.

On October 1, 2019, Mr.

Goldberger received an initial grant of 50,955 options to purchase shares of common stock, at an exercise price of $27.90 per share.

One-fourth of the options vest on each of the first four anniversaries of the date of grant, subject to Mr.

Goldberger’s continued employment with us through the applicable vesting dates.

On January 25, 2021, Mr.

Goldberger received an incentive award of 18,000 options to purchase shares of common stock, at an exercise price of $39.90 per share.

One-fourth of the options vest on each of the first four anniversaries of the date of grant, subject to Mr.

Goldberger’s continued employment with us through the applicable vesting dates.

On January 17, 2022, Mr.

Goldberger received an incentive award of 16,666 options to purchase shares of common stock, at an exercise price of $11.55 per share.

One-third of the options vest on each of the first three anniversaries of the date of grant, subject to Mr.

Goldberger’s continued employment with us through the applicable vesting dates.

On April 17, 2023, Mr.

Goldberger voluntarily relinquished the foregoing incentive awards granted on October 1, 2019, January 25, 2021 and January 17, 2022.

On August 4, 2023, Mr.

Goldberger received an incentive award of 50,000 restricted stock units.

One-third of the underlying shares of common stock vest on each of the first, second, and third anniversaries of the date of grant, subject to Mr.

Goldberger’s continued employment with us through the applicable vesting dates, and which restricted stock units are also subject to potential acceleration of vesting upon a double-trigger change in control as defined in our Executive Severance Policy.

On January 16, 2024, Mr.

Go ldberger received an incentive award of 75,000 restricted stock units.

One-third of the underlying shares of common stock vest on each of the first, second, and third anniversaries of the date of grant, subject to Mr.

On January 18, 2021, Mr.

Posner received an incentive award of 16,666 options to purchase shares of common stock, at an exercise price of $26.55 per share.

One-fourth of the options vest on each of the first four anniversaries of the grant date, subject to Mr.

Posner’s continued employment with us through the applicable vesting dates, and which options are also subject to potential acceleration of vesting upon a double-trigger change in control as defined in our Executive Severance Policy.

On January 14, 2022, Mr.

Posner received an incentive award of 6,666 options to purchase shares of common stock, at an exercise price of $11.55 per share.

One-third of the option vests on each of the first three anniversaries of the grant date, subject to Mr.

On July 31, 2023, Mr.

Posner received an incentive award of 20,000 options to purchase shares of common stock, at an exercise price of $4.50 per share.

One-third of the option vests on each of the first three anniversaries of the grant date, subject to Mr.

On January 16, 2024, Mr.

Posner received an incentive award of 16,000 restricted stock units.

One-third of the underlying shares of common stock vest on each of the first, second, and third anniversaries of the date of grant, subject to Mr.

Posner’s continued employment with us through the applicable vesting dates, and which restricted stock units are also subject to potential acceleration of vesting upon a double-trigger change in control as defined in our Executive Severance Policy.

Other Compensation and Benefits

Our NEOs are eligible to participate in our employee benefit plans and programs, including medical and dental benefits and flexible spending accounts, to the same extent as our other full-time employees, subject to the terms and eligibility requirements of those plans.

We also sponsor a 401(k) defined contribution plan in which NEOs may participate, subject to limits imposed by the Internal Revenue Code, to the same extent as its other full-time employees.

Retirement Policy

Our voluntary retirement policy provides eligible employees a one-time lump cash payment equal to one week of pay for each year of service to us as well as other benefits including potential acceleration of stock-based compensation.

To be eligible for our retirement policy, an employee must attain a minimum age of 60 years old and eight minimum years of continuous service to our company.

Employment Agreements

Our current executive officers are not party to employment agreements with a fixed term.

They are employed on an at-will basis, subject to the terms of (i) their respective employment offer letters, and (ii) the Executive Severance Policy described below.

Pursuant to his employment offer letter (the “Goldberger Agreement”), Mr.

Goldberger was paid an annual base salary of $601,020 for 2023, which was increased to $631,000 for 2024.

In addition, Mr.

Goldberger is entitled to receive, subject to employment by us on the applicable date of bonus payout, an annual target discretionary bonus, payable at the discretion of the Board.

In January 2024, on the recommendation of the compensation committee, Mr.

Goldberger’s target discretionary bonus opportunity for 2024 was adjusted to be for up to 70% of his base salary.

Pursuant to the Goldberger Agreement, Mr.

Goldberger is also eligible to receive healthcare benefits as may be provided from time to time by us to our employees generally, to participate in our 401(k) plan and to receive paid time off annually in accordance with our policies in effect from time to time.

Pursuant to his employment offer letter (the “Posner Agreement”), Mr.

Posner was paid an annual base salary of $ $415,000 in 2023, which was increased to $435,750 in 2024.

In addition, Mr.

Posner is entitled to receive, subject to employment us on the applicable date of bonus payout, an annual target discretionary bonus of up to 40% of his annual base salary, payable at the discretion of the Board or the compensation committee.

Pursuant to the Posner Agreement, Mr.

Posner is also eligible to receive healthcare benefits as may be provided from time to time by us to our employees generally, to participate in our 401(k) plan and to receive paid time off annually in accordance with our policies in effect from time to time.

Outstanding Equity Awards at the End of 2023

The following table provides information about outstanding options, units and stock awards issued by us that were held by each of our NEOs as of December 31, 2023.

None of our NEOs held any other equity awards from the Company as of December 31, 2023.

Option Awards

Number of Securities Underlying Unexercised Options Exercisable (#)

Number of Securities Underlying Unexercised Options Unexercisable (#)

Option Exercise Price

Option Award Grant Date

Option Expiration Date

Award Grant Date

Number of shares or units of stock that have not vested (#)

Market value of shares or units of stock that have not vested

Goldberger (1)

1 On April 17, 2023, Mr.

Goldberger voluntarily relinquished the option awards granted on October 1, 2019, January 25, 2021, and January 17, 2022.

² Value in this column is based on the closing price of our common stock on Nasdaq on the last business day of fiscal 2023 ($5.95).

Potential Payments upon Termination or Change in Control

Under our Executive Severance Policy, if the we terminate an eligible member of our senior management team without “cause” or if the executive resigns for “good reason” (as those terms are defined below), we will provide the following severance benefits:

(i) severance payment in an amount equal to six months of base salary (or one year of base salary and target bonus in the case of our Chief Executive Officer)payable in equal installments over the six-month or one-year period, as applicable, (ii) the accrued but unpaid annual incentive bonus, if any, for the year ended prior to the executive’s termination of employment payable at the same time such annual bonuses for such year to other members of the senior management team, (iii) an annual incentive bonus, if any, for the year in which the executive’s termination of employment occurred based on actual performance and pro-rated for the period of employment during such year through the executive’s termination of employment;

provided that no such pro-rated bonus shall be payable unless the period of employment during such year exceeds six months and which will be payable at the same time annual incentive bonuses for such year are paid to other members of the senior management team, and (iv) reimbursement of COBRA premiums for group health continuation coverage paid by the terminated executive for the duration of the “severance period” (as defined below).

If the termination without cause or resignation for good reason occurs within two years after a “change in control” we will provide the following severance benefits in lieu of the benefits provided in the previous sentence:

(i) a lump sum severance payment in an amount equal to one year of base salary (or one and one-half (1.5) years of the sum of base salary and target bonus in the case of our Chief Executive Officer), and (ii) reimbursement of COBRA premiums for group health continuation coverage paid by the terminated executive for the duration of the severance period, and (iii) acceleration of vesting for all outstanding equity compensation and an extension of the period of time to exercise outstanding stock options and stock appreciation rights until the earlier of 150 days following the executive’s termination of employment or the original expiration date for such options or stock appreciation rights.

For purposes of the Executive Severance Policy, “cause” means any of the following:

(a) the executive’s willful failure to fulfill, in any material respect, his or her duties and responsibilities to us (other than by reason of death, illness or disability);

(b) the executive’s willful misconduct, gross negligence or willful acts of personal dishonesty in the performance of his or her duties to us that directly, materially and demonstrably impairs or damages our property, goodwill, reputation, business or finances;

(c) the conviction of, or plea of nolo contendere by, the executive to, a felony or a crime involving moral turpitude that materially and demonstrably impairs or damages our property, goodwill, reputation, business or finances;

(d) the executive’s commission of fraud or embezzlement against us;

(e) the executive’s willful or intentional violation of any lawful policy that directly, materially and demonstrably impairs or damages our property, goodwill, reputation, business or finances;

or (f) the executive’s breach of the terms of any confidentiality and assignment agreement, which contains restrictive covenants in favor of us.

For purposes of the Executive Severance Policy “good reason” means any of the following (a) any material reduction in the executives base annual compensation prior to a “change in control”;

provided, however, that a reduction in the executives base annual compensation will not constitute “good reason” if we reduce the annual base compensation of all participants in the Executive Severance Policy on a substantially equivalent basis;

(b) any material reduction in the executive’s base annual compensation during the period commencing on or after a “change in control” and ending on the second anniversary of a “change in control”;

or (d) a transfer of executive’s principal place of employment to a location that is more than 30 miles from the executive’s then current principal place of employment.

For purposes of the Executive Severance Policy, “severance period” means the number of months set forth in the table below based on the executive’s employment position at the time of his involuntary termination of employment that results in the executive’s termination for “good reason”:

Severance Period

Employment Position

Prior to a Change in Control or on or After the Second Anniversary of a Change in Control

Two-Year Period After a Change in Control

All Other Participants:

In connection with the appointment of Mr.

Posner as Chief Financial Officer effective April 2019, we agreed to increase (i) the severance period for Mr.

Posner under the Executive Severance Policy from six months to 12 months, and (ii) the Severance Multiple (as defined in the Executive Severance Policy) payable to Mr.

Posner from 0.5 to 1.0.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table shows information regarding our equity compensation plans as of December 31, 2023.

Plan Category

(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights

(b) Weighted-average exercise price of outstanding options, warrants and rights

(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

In accordance with the terms of the 2018 Plan, effective January 1, 2024, the Board increased the number of shares available for issuance under the 2018 Plan by 331,935 shares of common stock, which was an amount equal to approximately 4% of the shares of common stock outstanding on a fully diluted basis as of December 31, 2023.

Director Compensation

Our Non-Employee Director Compensation Policy is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders.

Annual Director Cash Compensation

We pay each of our non-employee directors a cash retainer for service on the Board.

As of January 1, 2023, the retainers payable to non-employee directors for service on the Board and for service as a chairman of a standing committee of the Board were as follows:

Annual Board Service Retainer

All non-employee directors (other than the Chairman of the Board)

Non-executive Chairman of the Board

Annual Committee Chair Service Retainer

Chair of the Audit Committee

Chair of the Compensation Committee

Chair of the Nominating and Governance Committee

Effective October 1, 2023, the retainers payable to non-employee directors for service on the Board and for service on each standing committee of the Board on which the director is a member became as follows:

Annual Board Service Retainer

All non-employee directors (other than the Chairman of the Board)

Non-executive Chairman of the Board

Annual Committee Chair Service Retainer

Chair of the Audit Committee

Chair of the Compensation Committee

Chair of the Nominating & Governance Committee

Annual Committee Member Retainer (other than Committee Chair)

Audit Committee

Compensation Committee

Nominating and Governance Committee

These retainers are payable in quarterly installments on the 15 th day of the second month of each calendar quarter, provided that no payment will be made to any director who is no longer serving as a non-employee member of the Board on the relevant payment date.

Each member of the Board is entitled to be reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the Board and any committee of the Board on which he or she serves.

Annual Director Equity Compensation

All non-employee director equity compensation set forth below is granted under the 2018 Plan.

All stock options granted under this plan and the Non-Employee Director Compensation Policy are nonstatutory stock options, with an exercise price per share equal to 100% of the Fair Market Value (as defined in the 2018 Plan) of the underlying shares of common stock on the date of grant, and a term of 10 years from the date of grant (subject to earlier termination in connection with a termination of service as provided in the 2018 Plan).

Initial Equity Grant

Under the Non-Employee Director Compensation Policy each new non-employee director receives an inaugural equity grant valued at $150,000.

The inaugural grants vest in equal monthly increments over a three-year period from the grant date (subject to earlier vesting in the case of a change of control as defined in the 2018 Plan).

Theofilos received an initial equity award under the Non-Employee Director Compensation Policy in January 2024.

Annual Equity Grant

On August 4, 2023, the date of our annual meeting of stockholders, the Board approved annual equity awards valued at $140,000 to the Chairman of the Board, and $100,000 to each of the other five continuing non-employee directors.

All such annual awards vest in 12 equal monthly installments on the next annual meeting of stockholders, subject to earlier vesting in the case of a change of control (as defined in the 2018 Plan).

Summary Compensation Table

The following table shows certain information with respect to the compensation of all our non-employee directors for the fiscal year ended December 31, 2023.

Fees Earned or Paid in Cash

Stock Awards ($)(1)(2)

Option Awards ($)(2)(3)

All Other Compensation

Errico , M.D.

Theofilos , M.D.

Patricia Wilber

Represents the grant date fair value of annual equity awards, granted on August 4, 2023, of 21,739 shares to Thomas J.

Errico, M.D., John P.

Gandolfo, Thomas M.

Patton, and Patricia Wilber.

The awards were granted as either restricted stock units (“RSUs”) or deferred stock units (“DSUs”).

Amounts in this column do not reflect the actual economic value that may be realized by the applicable non-employee director.

Annual equity awards vest in 12 equal monthly installments from the grant date, provided that such grants shall become fully vested on (i) the one-year anniversary of the grant date and (ii) the close of business one business day prior to our next annual stockholder meeting following the grant date, whichever is earlier, subject to the grantee’s continued service to us on the applicable vesting date and earlier vesting upon a change of control of our Company.

Represents grant date fair value of annual equity awards granted on August 4, 2023 of 36,383 and 25,989 options with an exercise price of $4.60 per share to F.

Peter Cuneo and Julie A.

Goldstein, respectively.

The grant date fair value was computed in accordance with FASB ASC 718.

See Note 11 to the consolidated financial statements in this Annual Report for a description of the assumptions used in valuing these options.

Amounts in this column do not reflect the actual economic value that may be realized by the applicable nonemployee director.

Represents consulting fees paid for the year ended December 31, 2023.

Errico resigned from the Board effective May 22, 2023.

Moody completed his term of service as of the 2023 Annual Meeting, did not stand for reelection, and resigned from the Board effective August 4, 2023.

Theofilos joined the Board on December 8, 2023, and received an initial equity award under the Director Compensation Policy on January 1, 2024.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 404 of Regulation S-K.

The following table sets forth the beneficial ownership of our shares of common stock as of February 29, 2024 for:

each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of its shares of common stock;

each of our named executive officers;

each of our directors; and

all of our current executive officers and directors as a group.

The percentage ownership information is based upon 6,002,628 of common stock outstanding as of February 29, 2024.

We have determined beneficial ownership in accordance with the rules of the SEC.

These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities.

In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options, restricted and deferred stock units, restricted stock awards or warrants that were outstanding on February 29, 2024, and which are exercisable on or before April 30, 2024, which is 60 days after February 29, 2024.

These shares are deemed to be outstanding and beneficially owned by the person holding those options, restricted and deferred stock units, restricted stock awards or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

Except as otherwise noted below, the address for persons listed in the table is c/o electroCore, Inc., 200 Forge Way, Suite 205, Rockaway, NJ 07866.

Name of Beneficial Owner

Number of Shares Beneficially Owned

Percentage of Shares Beneficially Owned

Principal Stockholders:

AMW Investment Company ,Inc.

Kathryn Theofilos (2 )

Happy Holstein Management LLC ( 3 )

Named Executive Officers and Directors:

Peter Cuneo (4)

Gandolfo (6 )

Goldberger (7 )

Goldstein (8 )

Theofilos, M.D.

Patricia Wilber ( 12 )

Directors and named executive officers as a group ( 9 persons)

*Denotes less than one percent.

Based on a Schedule 13G/A filed with the SEC on February 14, 2024.

Represents 550,364 shares of common stock beneficially owned by AWM Investment Company, Inc., a Delaware corporation (“AWM”), as the investment adviser to Special Situations Cayman Fund, L.P., a Cayman Islands Limited Partnership (“Cayman”), and Special Situations Fund III QP, L.P., a Delaware limited partnership (“SSFQP” and, together with Cayman, SSFQP and the “AWM Funds”).

Greenhouse and Adam C.

Stettner are the principal owners of AWM.

Through their control of AWM, Messrs.

Greenhouse and Stettner share voting and investment control over the portfolio securities of each of the AWM Funds.

Includes 550,364 shares of common stock.

The amounts exclude an additional 896,600 shares of common stock underlying warrants consisting of (i) 396,600 common stock warrants with a 9.99% beneficial ownership limitation and (ii) 500,000 prefunded warrants with a 9.99% beneficial ownership limitation.

The amounts set forth in the table above give effect to such beneficial ownership limitations.

The address for AWM is c/o Special Situations Funds, 527 Madison Avenue, Suite 2600, New York, New York, 10022.

Based on a Schedule 13D filed with the SEC on December 18, 2023.

Represents 637,933 shares of common beneficially owned by Kathryn Theofilos.

Includes (i) 8,556 shares of common stock held directly by Kathyrn Theofilos, (ii) 85,973 shares of common stock held in a joint account with her spouse, Charles Theofilos, MD, (iii) 153,168 shares of common stock held by Happy Holstein, LLLP, a Florida limited liability limited partnership, of which Happy Holstein Management, LLC is the general partner, of which Kathryn Theofilos is the manager, (iv) 790 shares of Common Stock held by MCKT, LLC, a Florida limited liability company of which Kathryn Theofilos is the manager, (v) 6,142 shares held by Kathryn Theofilos’ adult children, over which she shares voting and dispositive power, (vi) 113,114 prefunded warrants with a 9.99% beneficial ownership limitation held by Happy Holstein Management, LLC, and (vii) 270,190 common stock warrants with a 9.99% beneficial ownership limitation held by Happy Holstein Management, LLC.

The amounts set forth in the table above do not effect to such beneficial ownership limitations.

The address for Kathryn Theofilos is 300 Village Square Crossing, Suite 102, Palm Beach Gardens, FL 33410.

Based on a Schedule 13D filed with the SEC on December 18, 2023.

Represents 536,472 shares of common beneficially owned by Happy Holstein Management, LLC.

Includes (i) 153,168 shares of common stock held by Happy Holstein, LLLP, a Florida limited liability limited partnership, of which Happy Holstein Management, LLC is the general partner, (ii) 113,114 shares of prefunded warrants with a 9.99% beneficial ownership limitation held by Happy Holstein Management, LLC, and (iii) 270,190 common stock warrants with a 9.99% beneficial ownership limitation held by Happy Holstein Management, LLC.

The address for Happy Holstein Management, LLC is 300 Village Square Crossing, Suite 102, Palm Beach Gardens, FL 33410.

Represents 5,665 shares of common stock, 60,261 options and 2,832 warrants to purchase shares of common stock.

Represents 150,023 shares of common stock held directly by Dr.

1,296 shares of common stock held directly by a trust for the benefit of Dr.

Errico’s family members;

and 14,016 options to purchase shares of common stock, 14,493 restricted stock units, 14,324 deferred stock units, and 22,803 warrants to purchase shares of common stock held directly by Dr.

Represents 1,266 shares of common stock and 41,192 deferred stock units.

Represents 86,060 shares of common stock and 25,495 warrants to purchase shares of common stock.

Represents 64,675 shares of common stock, 17,326 options to purchase common stock, 6,950 deferred stock units and 16,997 warrants to purchase shares of common stock.

Represents 24,016 shares of common stock, 28,225 deferred stock units, and 5,524 warrants to purchase common stock.

Represents 6,437 shares of common stock and 29,193 options to purchase shares of common stock.

Represents 326,437 shares of common stock and 2,101 deferred stock units held directly by Dr.

Theofilos, and 85,973 shares of common stock held in a joint account with Dr.

Theofilos’ spouse.

The amount excludes an additional 396,599 shares of common stock underlying warrants consisting of (i) 283,285 common stock warrants with a 9.99% beneficial ownership limitation and (ii) 113,314 prefunded warrants with a 9.99% beneficial ownership limitation held or managed by Happy Holstein Management, LLC, a Florida limited liability limited company, of which Dr.

Theofilos’s spouse is the manager.

Theofilos may be deemed to share voting and investment power over the securities held by his spouse and Happy Holstein Management, LLC.

Theofilos disclaims beneficial ownership over the securities held or managed by his spouse and Happy Holstein Management, LLC except to the extent of his pecuniary interest therein.

Represents 3,336 shares of common stock and 18,107 restricted stock units.

Certain Relationships and Related Transactions, and Director Independence

Independence Of The Board Of Directors

The common stock is listed on the Nasdaq Capital Market.

Under Nasdaq rules, independent directors must comprise a majority of our board of directors.

Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

The Board has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his responsibilities.

As a result of this review, the Board has determined that each of our directors other than Daniel S.

Goldberger, our CEO, are “independent directors” as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of Nasdaq.

In making these determinations, the Board has reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and its management, including the beneficial ownership of Company capital stock by each non-employee director, any relevant family relationships, and transactions involving directors, including those described in the section entitled “Certain Related Party Transactions.”

Related-Person Transactions Policy And Procedures

We have adopted a written Related Party Transaction Policy that set forth its procedures for the identification, review, consideration and approval or ratification of related person transactions.

A related person includes directors, executive officers, beneficial owners of 5% or more of any class of our voting securities, immediate family members of any of the foregoing persons, and any entities in which any of the foregoing is an executive officer or is an owner of 5% or more ownership interest.

Under the policy, related person transactions with the scope of the policy must be reviewed and approved by our audit committee.

In considering related person transactions, our audit committee will take into account the relevant available facts and circumstances including, but not limited to:

the related person's interest in the related person transaction;

the approximate dollar value of the amount involved in the related person transaction;

the approximate dollar value of the amount of the related person's interest in the transaction without regard to the amount of any profit or loss;

whether the transaction was undertaken in the ordinary course of business;

whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party;

the purpose of, and the potential benefits to us of, the transaction;

any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.

The Related Party Transaction Policy requires that, in determining whether to approve, ratify or reject a related person transaction, the audit committee must review all relevant information available to it about such transaction, and that it may approve or ratify the related person transaction only if it determines that, under all of the circumstances, the transaction is in, or is not inconsistent with, our best interests.

The review, approval or ratification of a transaction, arrangement or relationship pursuant to the Related Party Transaction Policy does not necessarily imply that such transaction, arrangement or relationship is required to be disclosed under Item 404(a) of Regulation S-K promulgated by the SEC.

Employee, Officer and Director Hedging

We have adopted a written insider trading policy applicable to all directors, officers and employees.

The policy prohibits subject individuals from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of our securities.

Certain Related Party Transactions

Except for the transactions described in this section, there have been no transactions since January 1, 2023 involving an amount in excess of $120,000 to which we have been a participant and in which any of its directors, executive officers or holders of more than 5% of its share capital, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described under “Executive Compensation” and “Director Compensation.”

On May 22, 2023, Joseph P.

Errico, a former director who resigned from the Board on such date, entered into an amendment to his Consulting Agreement with us (the “Consulting Agreement”), pursuant to which Mr.

Errico will serve as Science and Strategic Advisor to us providing certain consulting and advisory services to our CEO for a three-year term.

In consideration for such services, Mr.

Errico receives $10,000 per calendar month for up to 20 hours per a month plus hourly or per diem fees for any additional services.

The Consulting Agreement contains additional customary provisions, and sets forth a framework pursuant to which Mr.

Errico may attend regularly scheduled meetings of the Board in a non-voting, observer capacity through May 22, 2024.

On August 2, 2023, we sold (i) 1,062,600 registered shares of common stock, and (ii) pre-funded warrants to purchase up to 613,314 shares of common stock in a registered direct offering to purchasers including Mr.

Errico and Happy Holstein Management, LLC, of which Kathryn Theofilos, the spouse of Charles S.

Theofilos, a member of our Board since December 8, 2023, is the manager.

The pre-funded warrants were sold at a purchase price of $4.35 minus $0.001 per pre-funded warrant, and are exercisable immediately at an exercise price of $0.001 per share.

In a concurrent private placement, we sold an aggregate of up to 837,955 warrants to purchase shares of common stock.

Each share of common stock in the registered direct offering was sold together with one-half of one warrant at a combined effective offering price of $4.4125 per share and related warrant.

The warrants became exercisable as of February 2, 2024 at a price of $4.35 per share and will expire five years after they first became exercisable.

On August 2, 2023, in a separate concurrent private placement to several of our then directors, we sold (i) 169,968 shares of common stock and (ii) warrants to purchase up to 84,982 shares of common stock.

Each share of common stock in this concurrent private placement was sold together with one-half of one warrant at a combined effective offering price of $4.4125 per share and related warrant.

The common stock was sold at a purchase price of $4.35 per share.

In connection with the registered direct offering, we agreed not to (i) enter into any agreement to issue or announce the issuance or proposed issuance of any common stock or common stock equivalents for a period of 180 days, or (ii) file any registration statement or amendment or supplement thereto for a period of 90 days.

We also agreed not to effect or enter into an agreement to effect any issuance of common stock or common stock equivalents involving a variable rate transaction until August 2, 2024.

We also agreed to indemnify the purchasers against certain liabilities, including liabilities under the Securities Act of 1933 and liabilities arising from breaches of representations and warranties contained in the purchase agreements.

The purchasers listed below participated in either the registered direct offering or concurrent private placements, and may be considered related persons of our company.

The purchase agreement contained customary representations, warranties and covenants including certain registration rights pursuant to which we filed a registration statement on Form S-1 (File No:

333-274199) with the SEC that was declared effective by the SEC on August 31, 2023.

The table below summarizes the issuances of common stock and warrants to the related parties.

Investment Amount

Common Stock Purchased

Pre-Funded Warrants Purchased

Warrants Purchased

Happy Holstein Management, LLC (1)

(1) Kathryn Theofilos, the spouse of Charles S.

Theofilos, a member of our Board since December 8, 2023, is the manager of Happy Holstein Management, LLC.

Indemnification Agreements

Our bylaws contain provisions limiting the liability of directors and providing that we will indemnify each of our directors to the fullest extent permitted under the General Corporation Law of the State of Delaware or any other applicable law.

Our bylaws also provide the Board with discretion to indemnify our officers and employees when determined appropriate by the Board.

In addition, we have entered and expect to continue to enter into agreements to indemnify our non-employee directors as determined by the Board.

With specified exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding.

we believe that these provisions in its governing documents and indemnification agreements are necessary to attract and retain qualified persons as directors.

We also maintain customary directors’ and officers’ liability insurance.

Principal Accountant Fees and Services

The following table represents aggregate fees billed to us for the fiscal years ended December 31, 2023 and December 31, 2022 by Marcum LLP, our principal accountants for these each of these two fiscal years.

Year Ended December 31,

Audit-Related Fees

All fees described above were pre-approved by the audit committee.

Audit Fees include fees billed for the fiscal year shown for professional services for the audit of our annual financial statements, quarterly reviews, and review of our registration statements and other SEC filings.

Exhibits and Financial Statement Schedules

1 unchanged sentence

(1) Financial Statements:

Report of Independent Registered Public Accounting Firm (PCAOB ID # 688) F-2

Consolidated Balance Sheets F-3

Consolidated Statements of Operations F-4

Consolidated Statements of Comprehensive Loss F-5

Consolidated Statements of Equity F-6

Consolidated Statements of Cash Flows F-7

Notes to Consolidated Financial Statements F-8

Report of Independent Registered Public Accounting Firm (PCAOB ID # 688 )

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:

5 unchanged sentences

Not applicable.

Certificate of Incorporation of electroCore, Inc .

Certificate of Incorporation of electroCore, Inc , incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, as filed with the Commission on August 14, 2018.

Amended and Restated Bylaws of electroCore, Inc .

Certificate of Designation of the Series A Preferred Stock of the Company

Certificate of Elimination of the Series A Preferred Stock of the Company, dated March 3, 2023

Certificate of Amendment to the Certificate of Incorporation, filed February 13, 2023

Registration Rights Agreement, dated March 27, 2020, between electroCore, Inc.

and Lincoln Park Capital Fund, LLC

Description of Capital Stock

incorporated by reference to the Company’s Current Report on Form 8-K, as filed with Commission on December 23, 2021.

Certificate of Designation of the Series A Preferred Stock of the Company, incorporated by reference to the Company’s Current Report on Form 8-K, as filed with the Commission on December 27, 2022.

Certificate of Elimination of the Series A Preferred Stock of the Company, dated March 3, 2023, incorporated by reference to the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the Commission on March 8, 2023.

Certificate of Amendment to the Certificate of Incorporation, filed February 13, 2023, incorporated by reference to the Company’s Current Report on Form 8-K, as filed with the Commission on February 14, 2023.

Description of Securities

Form of Pre-Funded Warrant, incorporated by reference to the Company’s Current Report on Form 8-K, as filed with the Commission on July 31, 2023.

Form of Common Warrant, incorporated by reference to the Company’s Current Report on Form 8-K, as filed with the Commission on July 31, 2023.

electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2023 as filed with the Commission on May 3, 2023.

Form of Employee Restricted Stock Unit Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the Commission on March 8, 2023.

Form of Non-qualified Stock Option Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the Commission on March 8, 2023.

Form of Employee Restricted Stock Award Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of Non-Employee Director Inaugural Deferred Stock Unit Award Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of Non-Employee Director Inaugural Non-qualified Stock Option Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of Non-Employee Director Inaugural Restricted Stock Unit Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of Non-Employee Director Annual Deferred Stock Unit Award Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of Non-Employee Director Annual Non-qualified Stock Option Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of Non-Employee Director Annual Restricted Stock Unit Agreement for electroCore, Inc.

2018 Omnibus Equity Incentive Plan

Form of Indemnification Agreement between the Registrant and each of its executive officers and directors

2018 Omnibus Equity Incentive Plan, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of Indemnification Agreement between the Registrant and each of its executive officers and directors, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Form of electroCore, Inc.

Management Severance Plan

Management Severance Plan, incorporated by reference to Amendment No.1 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the Commission on May 1, 2023.

electroCore, Inc.

Non-Employee Director Compensation Policy

Rockaway, NJ Office Lease between Anson Logistics Assets LLC and electroCore, Inc.

Form of Common Unit Warrant

Form of Series A Warrant

Form of Bridge Warrant

Non-Employee Director Compensation Policy, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No.

333-274199, as filed with the Commission on August 24, 2023 .

Form of Series A Warrant, incorporated by reference to the Company's Registration Statement on Form S-1, Registration No.

333-225084, as filed with the Commission on May 21, 2018.

Employment Offer Letter, dated as of September 26, 2019, between electroCore, Inc.

2 unchanged sentences

Amendment to Brian Posner Employment Agreement, dated as of August 8, 2019, incorporated by reference to the Company's Quarterly Report on Form 10-Q, as filed with the Commission on August 14, 2019 .

Securities Purchase Agreement, dated as of July 31, 2023 (Registered Direct), incorporated by reference to the Company's Current Report on Form 8-K, as filed with the Commission on July 31, 2023.

Securities Purchase Agreement, dated as of July 31, 2023 (Private), incorporated by reference to the Company's Current Report on Form 8-K, as filed with the Commission on July 31, 2023.

List of subsidiaries of electroCore, Inc.

6 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy

Inline XBRL Instance Document

5 unchanged sentences

Filed herewith.

Incorporated by reference to the Company’s Registration Statement on Form S ‑ 1, Registration No.

333 ‑ 228863.

Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019 as filed with the Commission on August 14, 2019.

Incorporated by reference to the Company’s Annual Report on Form 10-K for the period ended December 31, 2018 as filed with the Commission on March 28, 2019.

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with Commission on March 27, 2020.

****** Incorporated by reference to the Company's Current Report on Form 8-K as filed with Commission on December 23, 2021

******* Incorporated by reference to the Company's Current Report on Form 8-K as filed with the Commission on December 27, 2022.

******** Incorporated by reference to the Company's Current Report on Form 8-K as filed with the Commission on February 14, 2023.

Indicates management agreement

12 unchanged sentences

March 13, 2024

March 8, 2023

/s/ Daniel S.

March 13, 2024

/s/ Thomas J.

Errico , M.D.

March 13, 2024

Errico , M.D.

/s/ John Gandolfo

1 unchanged sentence

John Gandolfo

/s/ Joseph P.

March 13, 2024

2 unchanged sentences

Thomas Patton

/s/ Thomas J.

/s/ Charles S.

Theofilos, M.D.

March 13, 2024

Theofilos , M.D.

/s/ Patricia Wilber

1 unchanged sentence

Patricia Wilber

/s/ Trevor J.

March 8, 2023

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID # 688 ) F-2

Consolidated Balance Sheets as of December 31, 2022 and 2021 F-3

Report of Independent Registered Public Accounting Firm (PCAOB ID # 688 )

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the Years ended December 31, 2023 and 2022

Consolidated Statements of Comprehensive Loss for the Years ended December 31, 2022 and 2021 F-5

Consolidated Statements of Equity for the Years ended December 31, 2022 and 2021 F-6

Consolidated Statements of Cash Flows for the Years ended December 31, 2022 and 2021 F-7

Notes to Consolidated Financial Statements F-8

Consolidated Statements of Comprehensive Loss for the Years ended December 31, 2023 and 2022

Consolidated Statements of Equity for the Years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the Years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

electroCore, Inc.

the Shareholders and Board of Directors of electroCore, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of electroCore, Inc.

(the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss , equity, and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”)

as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for

each of the two years in the period ended December 31, 2023 and the related notes (collectively referred to as the “financial statements”).

opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2023 and 2022, and the

results of its operations and its cash flows for each of the two years in the

period ended December 31, 2023 in conformity with accounting principles

generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 3, the Company has experienced significant losses and cash used in operations and expects to continue to incur net losses.

These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 3.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The accompanying consolidated financial statements have been prepared assuming that

the Company will continue as a going concern.

As more fully described in Note

3, the Company has experienced significant

losses and cash used in operations and expects to continue to incur net losses.

These conditions raise substantial doubt about the Company's ability to

continue as a going concern.

Management's plans in regard to these matters are

also described in Note 3.

The consolidated

financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

financial statements are the responsibility of the Company's management.

responsibility is to express an opinion on the Company's financial statements

based on our audits.

We are a public

accounting firm registered with the Public Company Accounting Oversight Board

(United States) ("PCAOB") and are required to be independent with

respect to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance

with the standards of the PCAOB.

standards require that we plan and perform the audits to obtain reasonable

assurance about whether the financial statements are free of material

misstatement, whether due to error or fraud.

The Company is not required to

have, nor were we engaged to perform, an audit of its internal control over

financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial

reporting but not for the purpose of expressing an opinion on the effectiveness

of the Company's internal control over financial reporting.

Accordingly, we

express no such opinion.

audits included performing

procedures to assess the risks of material misstatement of the financial

statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the financial statements.

audits also included evaluating the

accounting principles used and significant estimates made by management, as

well as evaluating the overall presentation of the financial statements.

believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

audit matters are matters arising from the current period audit of the

financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are

material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

We determined that there are no

critical audit matters.

/s/ Marcum llp

We have served as the Company’s auditor since 2020.

New York , NY

We have served as the

Company’s auditor since 2020.

March 13, 2024

27 unchanged sentences

10,000,000 shares authorized as of December 31, 2023 and December 31, 2022 ;

71,173 shares issued and outstanding at December 31, 2022 ($ 0.001 per share liquidation value) and 0 shares issued and outstanding at December 31, 2021

0 shares issued and outstanding at December 31, 2023 and 71,173 shares issued and outstanding at December 31, 2022

Stockholders' equity:

4 unchanged sentences

Accumulated deficit

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Total liabilities and equity

12 unchanged sentences

Other (income) expense:

Gain on extinguishment of debt

Gain on termination of joint venture

Interest and other income

15 unchanged sentences

Foreign currency translation adjustment

Foreign currency translation adjustment - deconsolidation

Unrealized gain on marketable securities, net of taxes as applicable

Other comprehensive (loss) income

Other comprehensive income (loss)

Preferred dividend

8 unchanged sentences

Accumulated other

Total electroCore

Preferred Stock

comprehensive

Noncontrolling

income (loss)

Balances as of January 1, 2022

Other comprehensive income

Issuance of stock (see Note 8 )

Issuance of stock to satisfy certain obligations (see Note 8)

Other comprehensive loss

Issuance of common stock in connection with employee stock plans, net of forfeitures

Settlement of accrued bonus

Dividend preferred

Share based compensation

Reverse stock split

Termination of joint venture

Balances as of January 1, 2023

Other comprehensive loss

Other comprehensive income

Sale of common stock and warrants

Financing fees

Issuance of common stock in connection with employee stock plans, net of forfeitures

Dividend preferred (see Note 8)

Preferred stock redemption

Share based compensation

Balances as of December 31, 2023

$ ( 146,370 )

See accompan ying notes to the c onsolidated financial statements.

8 unchanged sentences

Depreciation and amortization

Amortization of marketable securities premium

Gain on extinguishment of debt

Gain on termination of joint venture

Gain on lease settlement

Increase in allowance for doubtful accounts

(Gain) loss on legal fee obligation settled with stock

Noncash lease expense

Decrease in allowance for credit losses

Amortization of right of use assets

Inventory reserve charge

4 unchanged sentences

Accrued expense and other current liabilities

Right of use operating lease assets

Operating lease liabilities

1 unchanged sentence

Cash flows from investing activities:

Purchase of marketable securities

Proceeds from maturities of marketable securities

Net cash provided by investing activities

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from shares issued, net of related expenses

Proceeds from shares issue

Financing costs

Net cash provided by financing activities

Effect of changes in exchange rates on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents – beginning of year

Net decrease in cash and cash equivalents

Cash and cash equivalents, and restricted cash – beginning of year

Cash and cash equivalents, and restricted cash – end of year

1 unchanged sentence

Proceeds from sale of state net operating losses

Income taxes paid

Interest paid

1 unchanged sentence

Insurance premium financing

Settlement of certain obligations through issuance of common stock

2020 bonus paid in stock

See accompanying notes to consolidated financial statements.

4 unchanged sentences

and its subsidiaries (“ electroCore ” or the “Company”) is a commercial stage bioelectronic medicine and wellness company dedicated to improving health through its non-invasive vagus nerve stimulation (“ nVNS ”) technology platform.

The Company’s focus is the commercialization of medical devices for the management and treatment of certain medical conditions and consumer product offerings utilizing nVNS to promote general wellbeing and human performance in the United States and select overseas markets.

The Company’s focus is the commercialization of medical devices for the management and treatment of certain medical conditions and consumer product offerings utilizing nVNS to promote general wellness and human performance in the United States and select overseas markets.

electroCore, headquartered in Rockaway, NJ, has two wholly owned subsidiaries:

1 unchanged sentence

The Company has paused operations in Germany, with sales into the country and the rest of Europe being managed by electroCore UK Ltd.

On November 2, 2021, the Company formally terminated its agreement with electroCore ( Aust ) Pty Limited (“ electroCore Australia”).

Prior to this termination, electroCoreAustralia was subject to electroCore’s control on a basis other than voting interests and was a variable interest entity (“VIE”), for which electroCore was the primary beneficiary.

As of May 2017, the VIE had ceased operations.

(see Note 10)

Summary of Significant Accounting Policies

7 unchanged sentences

The accompanying consolidated financial statements include the accounts of electroCore and its wholly owned subsidiaries.

electroCore Australia was consolidated with the non-controlled equity presented as non-controlling interest in the Company's consolidated financial statements for the year ended December 31, 2020.

As described in Note 1, the Company terminated its affiliation with electroCore Australia on November 2, 2021 and, as such, this dormant entity was not included in the Company's subsequent consolidated financial statements.

All intercompany balances and transactions have been eliminated in consolidation.

2 unchanged sentences

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Significant items subject to such estimates and assumptions include allowances for doubtful accounts, trade credits, rebates, co-payment assistance and sales returns, valuation of inventory , estimated useful life of licensed product and cloud computing arrangements, stock compensation, incremental borrowing rate and contingencies.

Actual results could differ from t hose estimates.

Significant items subject to such estimates and assumptions include trade credits, rebates, co-payment assistance and sales returns, valuation of inventory , estimated useful life of licensed products , income taxes, stock compensation, and contingencies.

ELECTROCORE, INC.

21 unchanged sentences

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased.

The following table provides a reconciliation of cash, cash equivalents and restricted cash to the balance reflected on the Consolidated Statement of Cash Flow for the year ended December 31, 2022:

(in thousands) Year Ended

The following table provides a reconciliation of cash, cash equivalents and restricted cash to the balance reflected on the Consolidated Statement of Cash Flow at December 31, 2023 :

(in thousands)

December 31, 2023

2 unchanged sentences

Total cash, cash equivalents and restricted cash

(f) Restricted Cash

The Company's restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its corporate credit card arrangement with Citibank.

As of December 31, 2023 , cash equivalents represented funds held in a money market account and amounted to $ 4.2 million.

The Company's restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its corporate credit card arrangement with Citibank, N.A and established in April 2022.

ELECTROCORE, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements — Continued

(g) Concentration of Credit Risk

(f) Concentration of Credit Risk

Cash equivalents are financial instruments that potentially subject the Company to concentration of credit risk.

As of December 31, 2022, the Company's cash equivalents securities were largely comprised of money market funds.

As of December 31, 2023 , the Company's cash equivalent securities were largely comprised of money market funds.

The Company has established guidelines relative to diversification and maturities that are designed to help ensure safety and liquidity.

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As of December 31, 2023 , 95 % of the Company’s cas h and cash equivalents were denominated in U.S.

Dollars, the balance is subject to foreign exchange risk.

The Company’s accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 per financial institution in the United States, and up to £ 85,000 by the Financial Services Compensation Scheme (“FSCS”) per financial institution in the United Kingdom.

(h) Accounts Receivable

The balance of the Company's cash is denominated in British pound sterling and is subject to foreign exchange risk.

The Company’s cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 per financial institution in the United States, and up to £ 85,000 by the Financial Services Compensation Scheme (“FSCS”) per financial institution in the United Kingdom.

The Company's cash equivalent securities are insured by the Securities Investor Protection Corp.

("SIPC') up to $ 500,000 per account, with a limit of $ 250,000 in cash.

(g) Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest.

The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio.

The Company maintains an allowance for credit losses for estimated losses inherent in its accounts receivable portfolio.

Management considers an account receivable to be past due when it is not settled under its stated terms.

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Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

During the years ended December 31, 2022 and 2021, the Company's allowance for doubtful accounts was immaterial.

During the years ended December 31, 2023 and 2022 , the Company's allowance for credit losses was immaterial.

The Company does not have any off balance sheet credit exposure related to its customers.

(i) Inventories

(h) Inventories

Inventory, which consists of raw materials, work-in-process and finished product, is stated at the lower of cost or net realizable value.

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If certain units of product no longer meet quality specification or become obsolete, the Company records a charge to cost of goods sold to write down such unmarketable inventory to zero .

(j) Property and Equipment

(i) Property and Equipment

Property and equipment are stated at historical cost.

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Rent expense for the operating lease is recognized on a straight-line basis over the lease term.

(l) Cloud Computing Arrangement

(k) Cloud Computing Arrangement

Implementation costs for the Company’s cloud computing arrangement (“CCA”) are capitalized and amortized using the straight-line method over the life of the arrangement.

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The capitalized costs are included as a component of other assets.

The accompanying Consolidated balance sheet as of December 31, 2022 includes a total of $ 1.2 million of such capitalized costs and the corresponding net amortized asset totaled $ 235,000 .

(m) Licensed Products

The accompanying Consolidated balance sheet as of December 31, 2023 includes a total of $ 1.2 million of such capitalized costs which were fully amortized as of December 31, 2023.

For the years ended December 31, 2023 and 2022 , t he Company recorded CCA amortization expense of $ 235,000 and $ 282,000 , respectively.

(l) Licensed Products

The Company licenses a portion of its devices through its cash pay channels.

The cost of these licensed devices is capitalized and included in Other Assets in the accompanying Consolidated Balance Sheets at December 31, 2022 and 2021, and is being recognized as cost of goods sold on the straight-line method over the estimated 12 - 36 month useful life of the devices.

I f certain licensed devices are returned and no longer meet quality specifications or the carrying amount of certain licensed devices are no longer deemed to be recoverable, the Company records a charge to cost of goods sold to write down such licensed devices t o zero .

During the year ended December 31, 2022, the Company recorded a charge to costs of goods sold of $ 239,000 related to such assets.

The accompanying Consolidated balance sheet as of December 31, 2022 includes a total of $ 931,000 of capitalized licensed device costs and the corresponding net amortized assets totaled $ 538,000 .

Cash flows from licensed devices are included in Inventory in the accompanying Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021.

(n) Impairment of Long-Lived Assets

The cost of these licensed devices is capitalized and included in Other Assets in the accompanying Consolidated Balance Sheets at December 31, 2023 and December 31, 2022, and is being recognized as cost of goods sold on the straight-line method over the estimated 12 - 36 month useful life of the devices.

If certain licensed devices are returned and no longer meet quality specifications or the carrying amount of certain licensed devices are no longer deemed to be recoverable, the Company records a charge to cost of goods sold to write down such licensed devices to zero .

The net book value of these licensed devices at December 31, 2023 and December 31, 2022 was $ 494,000 and $ 538,000 , respectively.

Changes in the value of these licensed devices in Other Assets is captured on the Statement of Cash Flows with inventories.

(m) Impairment of Long-Lived Assets

Long lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

(o) Stock-based Compensation

(n) Stock-based Compensation

The Company accounts for stock-based compensation in accordance with the ASC Topic 718 , Compensation – Stock Compensation .

The Company estimates the fair value of stock option awards using the Black-Scholes option pricing model on the date of the grant.

Restricted stock unit awards and restricted stock awards without a market condition are valued based on the closing price of the Company’s common stock on the date of the grant.

Restricted stock unit a wards and restricted stock awards with ou t a market condition are valued based on the closing price of the Company’s common stock on the date of the grant.

Compensation expense reflects actual forfeitures and is primarily recognized on a straight-line basis over the requisite service period of the individual grants, which typically equals the vesting period.

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Notes to Consolidated Financial Statements — Continued

(p) Income Taxes

(o) Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740 , "Income Taxes." Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.

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The Company is currently not aware of any issues under review that could result in significant payments, accruals or deviation from its position during the next twelve months.

(q) Research and Development

(p) Research and Development

Research and development costs are expensed as incurred.

These costs include, but are not limited to, costs related to clinical trials, and compensation and related overhead for employees and consultants involved in research and development activities.

(r) Foreign Currency Translation and Transactions

(q) Foreign Currency Translation and Transactions

The functional currency of the Company’s international operations has been determined to be the respective local currency.

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Foreign currency transaction gains and losses related to assets and liabilities that are denominated in a currency other than the functional currency are reported in the Consolidated Statements of Operations in the period they occur.

(s) Segment Information

(r) Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company views its operations and manages its business as one operating segment.

(t) Prior year presentation

Prior year presentation has been conformed to current year presentation.

(u) Recently Adopted Accounting Standards

There are no recent accounting pronouncements that are expected to have a material impact on the Company’s consolidated financial statements or related disclosures.

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Significant Risks and Uncertainties

(s) Recently Adopted Accounting Standards

In November 2023, the FASB issued Accounting Standards Update (ASU) No.

2023 - 07 , Segment Reporting (Topic 280 ), Improvements to Reportable Segment Disclosures which will require companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker ("CODM").

The pronouncement is effective for annual filings for the year ended December 31, 2024.

The Company is still assessing the impact of the adoption of this standard but does not expect it to have a material impact on its results of operations, financial position or cash flows.

In December 2023, the FASB issued Accounting Standards Update (ASU) No.

2023 - 09 , Income Taxes (Topic 740 ) , Improvements to Income Tax Disclosures which will require companies to make additional income tax disclosures.

The pronouncement is effective for annual filings for the year ended December 31, 2025.

The Company is still assessing the impact of the adoption of this standard but does not expect it to have a material impact on its results of operations, financial position or cash flows.

Going Concern, Significant Risks and Uncertainties

Going Concern

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The Company has never been profitable and has incurred net losses and cash used in operations in each year since its inception.

The United States Department of Veteran Affairs comprised 60.8 % of the Company's revenue during the year ended December 31, 2022.

The Company expects that a majority of our 2023 sales will be made pursuant to its qualifying contract under the Federal Supply Schedule, or FSS, which was secured by the Company in December 2018, as well as open market sales to individual facilities within the government channels.

The FSS is scheduled to expire on January 15, 2024.

The Company intends to request an extension of the FSS from the United States Department of Veteran Affairs, but there is no assurance the FSS will be renewed, and if at all renewed at terms favorable to the Company.

The Company's sales function in this channel is comprised of employees and independent contractors.

The Company’s expected cash requirements for the next 12 months and beyond are largely based on the commercial success of its products.

Sales to the United States Department of Veteran Affairs comprised 60.1 % of the Company's revenue during the year ended December 31, 2023.

The majority of the Company's 2023 sales were made pursuant to our qualifying contract under the Federal Supply Schedule or FSS, which was secured by us in December 2018, as well as open market sales to individual facilities within the government channels.

The initial term of our FSS contract was scheduled to expire on January 15, 2024 .

On January 5, 2024, we obtained a modification to the initial contract, temporarily extending the term from January 15, 2024, to March 14, 2024, and subsequently extending the term to June 14,

2024, while the U.S.

Department of Veteran Affairs VA Federal Supply Schedule

Service reviews our follow-on offer application for a replacement FSS contract.

The Company has historically funded its operations from the sale of its common stock.

On July 31, 2023, the Company entered into a registered direct offering with certain institutional and accredited investors, and concurrent private placements with such investors and certain of the Company’s officers and directors, resulting in net proceeds to the Company of approximately $ 7.5 million after deducting the placement agent fees and expenses, and other offering expenses payable by the Company.

See Note 8, Shareholders' Equity , Securities Purchase Agreements .

The Company’s expected cash requirements for the next 12 months from the date these financial statements are issued and beyond are largely based on the commercial success of its products.

The Company believes its cash and cash equivalents and anticipated revenue will enable it to fund its operating expenses, working capital, and capital expenditure requirements, as currently planned, through 12 months from the date of the accompanying financial statements.

There are significant risks and uncertainties as to its ability to achieve these operating results.

Due to the risks and uncertainties, the Company may need to reduce its activities significantly more than its current operating plan and cash flow projections assume in order to fund its operations beyond one year of the date the accompanying financial statements are issued.

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

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

There is no assurance that the Company will generate sufficient funds through its operating results or financing activity raising substantial doubt about the Company’s ability to continue as a going concern within one year of the date of the accompanying financial statements are issued.

Due to the risks and uncertainties, there can be no assurance that the Company will have sufficient cash flow and liquidity to fund its planned activities, which could force it to significantly reduce or curtail its activities and potentially cease operations.

These conditions raise substantial doubt about the Company's ability to continue as a going concern within one year of the date of these accompanying financial statements are issued.

The accompanying financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Concentration of Revenue Risks

The Company earns a significant amount of its revenue (i) in the United States from the Department of Veterans Affairs and Department of Defense ("VA/ DoD ") pursuant to its qualifying contract under the Federal Supply Schedule and open market sales to individual Department of Veterans Affairs facilities, and (ii) in the United Kingdom from the National Health Service.

The VA/ DoD and National Health Service were the Company’s sole customers accounting for 10 % or more of total net sales during the years ended December 31, 2022 and 2021.

The Company earns a significant amount of its revenue (i) in the United States from the Department of Veterans Affairs and Department of Defense ("VA/ DoD ") pursuant to its qualifying contract under the Federal Supply Schedule and open market sales to individual Department of Veterans Affairs facilities, (ii) in the United States from sales of its TAC-STIM products to several units of the DoD, and (iii) in the United Kingdom from the National Health Service.

The following table reflects the respective concentration as a percentage of the Company's net sales:

2 unchanged sentences

National Health Service

During the years ended December 30, 2022 and 2021, one and two facilities accounted for more than 10 % of total VA/DOD net sales, respectively.

During the years ended December 31, 2023 and 2022 , two and one facilities accounted for more than 10 % of total VA/DOD net sales, respectively.

During the years ended December 31, 2023 and 2022 , one facilit y accounted for more than 10 % of net sales from the National Health Service.

2 unchanged sentences

The Company is exposed to currency risk from the potential changes in functional currency values of its assets, liabilities, and cash flows denominated in foreign currencies .

COVID- 19 Risks and Uncertainties

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

The Company continues to monitor the impact of the ongoing coronavirus pandemic on all aspects of its business and geographies, including how it will impact business partners, customers, and the global supply chain.

While the Company experienced disruptions during the years ended December 31, 2022 and 2021 from the coronavirus pandemic, it is unable to predict the full impact that the coronavirus pandemic may have on its financial condition, results of operations and cash flows due to numerous uncertainties.

These uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the ongoing pandemic and containment measures, the emergence of new viral strains that are not responsive to the vaccines, among others.

The coronavirus pandemic has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets.

Depending upon the duration and severity of the pandemic, the continuing effect on the Company's results and outlook over the long term remains uncertain.

Revenue Recognition

Product Net Sales

(in thousands)

Years ended December 31,

Rx gammaCore - Department of Veteran Affairs and Department of Defense

Rx gammaCore - U.S.

Outside the United States

Geographical Net Sales

The following table presents net sales disaggregated by geographic area:

Years ended December 31,

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Total Net Sales

Contract Balances

The Company generally invoices the customer and recognizes revenue once its performance obligations are satisfied, at which point payment is unconditional.

In March 2022, the Company entered into an agreement with Teijin Limited (Teijin), to license certain exclusive rights to its nVNS technology for commercialization in Japan for a range of primary headache disorders.

Under the agreement, the Company received a non-refundable, upfront payment for the licenses and rights granted to Teijin.

The Company began to recognize revenue for this upfront payment ratably over a period of one year commencing in the second quarter of 2022.

As of December 31, 2022, the Company's Consolidated balance sheet included a contract liability related to the Teijin agreement in the amount of $ 152,000 which is included in Accrued expenses and other current liabilities.

No further contracts with customers gave rise to contract assets or liabilities during the year ended December 31, 2022 and 2021 .

See Note 7 Accrued Expenses and other current liabilities.

Agreed upon payment terms with customers are within 30 days of shipment.

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Total current inventory

As of December 31, 2022 and 2021, the Company reserved $ 668,000 and $ 821,000 respectively, for obsolete inventory .

During the year ended December 31, 2022, the Company disposed of $ 110,000 of inventory which was previously reserved against.

The reserve for obsolete inventory was $ 0.7 million as of December 31, 2023 and 2022 , respectively.

The Company records charges for obsolete inventory in Cost of goods sold.

These charges to Cost of goods sold totaled $ 0.7 million and $ 0.2 million for the years ended December 31, 2023 and 2022 , respectively.

As of December 31, 2023 and 2022 , noncurrent inventory was comprise d of approximately $ 0.5 million and $ 0.1 million of raw materials, respectively, and $ 0.1 million and $ 2.1 million of work in process, respectively.

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Notes to Consolidated Financial Statements — Continued

The Company accounts for leases in accordance with FASB ASU 2016-02, Leases (Topic 842), and its operating leases consist of manufacturing/warehouse space and office equipment.

The Company accounts for leases in accordance with ASU 842 , and its operating leases consist of manufacturing/warehouse space in Rockaway, New Jersey and office equipment.

The Company elected not to recognize right of use assets and lease liabilities for short term leases, i.e., leases with a noncancelable period of 12 months or less.

The Company recognized the option to renew its manufacturing/warehouse space (" Rockaway space") as part of the right of use asset and the lease liability as the Company deemed that the renewal option was reasonably certain to be exercised.

In connection with its cost reduction strategies, the Compan y vacated its New Jersey corporate headquarters ("Basking Ridge office space") and r elocated its corporate headquarters to the Rockaway space effective December 31, 2021.

Although the Basking Ridge lease agreement provided for sublease, the Company did not elect this option in light of the economic downturn in commercial real estate due to the pandemic and other factors.

In December 2020, the Company informed the Basking Ridge landlord of its intention to vacate the Basking Ridge office space on December 31, 2021.

On September 27, 2021, the Company entered into the Termination and Settlement Agreement ("Agreement") with the lessor of the Basking Ridge office space.

The Agreement provided for the immediate termination of the Basking Ridge lease in its entirety.

In consideration for the lease termination, the Company agreed to pay the lessor a total of $ 500,000 in cash and issue to the lessor 13,333 shares of its common stock.

As of December 31, 2021, such payments were satisfied by the Company.

The Company recorded a gain of $ 57,000 connection with the termination of the Agreement which is included in the accompanying Consolidated Statement of Operations for the year ended December 31, 2021 under the caption Operating expenses - Selling, general and administrative.

For the years ended December 31, 2022 and 2021 , the Company recognized lease expense of $ 153,000 and $ 146,000 , respectively.

For the years ended December 31, 2023 and 2022 , the Company recognized lease expense of $ 153,000 , respectively.

This expense does not include non-lease components associated with the lease agreements as the Company elected not to include such charges as part of the lease expense.

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Amounts representing interest

On February 6, 2024, the Company entered into The First Amendment to Lease Agreement ("the Agreement") to extend the Rockaway, New Jersey lease for an additional 10 years and includes the expansion of leased property.

The Amendment is effective May 1, 2024 , and expires on July 31, 2034 , with a tenant option to renew for an additional five years .

The Amendment includes the expansion of leased property from 13,643 square feet to 22,557 square feet.

The initial base rent under the Amendment is $ 15.00 per square foot and increases by 4 % per annum on each anniversary of the effective date.

The first three months of rent is abated for the additional 8,914 square feet leased under the Amendment.

ELECTROCORE, INC.

6 unchanged sentences

Accrued bonuses and incentive compensation

Accrued litigation legal fees expense

Accrued legal fees

Accrued insurance expense

Accrued research and development expenses

Accrued vacation and other employee related expenses

Accrued valued-added tax

Accrued tax expenses

Deferred revenue

1 unchanged sentence

On July 5, 2023, the Company entered into a Commercial Insurance Premium Finance and Security Agreement (the " 2023 Agreement").

The 2022 Agreement provides for a single borrowing by the Company of approximately $ 783,000 with a nine -month term and an annual interest rate of 2.49 %.

The 2023 Agreement provides for a single borrowing by the Company of approximately $ 618,000 with a ten -month term and an annual interest rate of 6.03 %.

The proceeds from this transaction were used to partially fund the premiums due under certain of the Company's insurance policies.

The amounts payable are secured by the Company’s rights under such policies.

The Company began to pay monthly installments of approximately $ 87,900 beginning in July 2022.

As of December 31, 2022 , the remaining balance un der the Agreement was $ 264,000 and during the year ended December 31, 2022, the Company recognized $ 4,000 in interest expense.

The amounts payable are secured by the Company's right under such policies.

The Company began paying monthly installments of approximately $ 61,800 in July 2023.

As of December 31, 2023 the remaining balance under the Agreement was approximately $ 247,000 .

On July 5, 2022, the Company entered into a Commercial Insurance Premium Finance and Security Agreement (“the 2022 Agreement”).

The 2021 Agreement provides for a single borrowing by the Company of $ 1.2 million, with a ten -month term and an annual interest rate of 1.55 %.

The proceeds from this transaction were used to partially fund the premiums due under some of the Company’s insurance policies.

The amounts payable are secured by the Company’s rights under such policies.

The 2022 Agreement provided for a single borrowing by the Company of approximately $ 783,000 with a nine -month term and an annual interest rate of 2.49 %.

The proceeds from this transaction were used to partially fund the premiums due under certain of the Company’s insurance policies.

The Company began to pay monthly installments of approximately $ 87,900 beginning in July 2022.

As of December 31, 2021 , the remaining balance un der the Agreement was $ 499,000 and during the year ended December 31, 2021, the Company recognized $ 5,000 in interest expense.

Paycheck Protection Program

On May 4, 2020, the Company received proceeds of $ 1.4 million in connection with a promissory note (the “Note”) entered into with Citibank, N.A.

(the “Lender”) evidencing an unsecured loan (the “Loan”) under the Paycheck Protection Program ("PPP").

The PPP is a program of the SBA established under the CARES Act.

Under the PPP, the proceeds of the Loan may be used for payroll and certain covered interest payments, lease payments and utility payments (“Qualifying Expenses”).

The Company used the entire Loan amount for Qualifying Expenses under the PPP.

On May 18, 2021, the Company received notification from the Lender of SBA's approval of the Company's application for loan forgiveness.

Accordingly, the Company was not required to repay the loan.

The Company recorded the loan forgiveness as a gain in the accompanying Consolidated Statements of Operations for the year ended December 31, 2021 under the caption Gain on extinguishment of debt.

All borrowings under the 2022 Agreement were repaid as of December 31, 2023 .

During the years ended December 31, 2023 and 2022 , the Company recognized $ 12,200 and $ 4,300 in aggregate interest expense related to the 2023 Agreement and 2022 Agreement, respectively.

ELECTROCORE, INC.

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Notes to Consolidated Financial Statements — Continued

Stockholders’ Equity

All common stock share and per share data reflects the reverse stock split effective February 15, 2023, as described in Note 14.

Subsequent Events, Reverse stock split .

Shareholders’ Equity

Securities Purchase Agreements

On July 31, 2023, the Company entered into a securities purchase agreement (“First SPA”) in connection with a registered direct offering and concurrent private placement with certain institutional and accredited investors pursuant to which the Company issued and sold an aggregate of 1,062,600 shares of common stock, 613,314 pre-funded common stock purchase warrants that are exercisable upon issuance, and warrants to purchase up to an aggregate of 837,955 shares of common stock.

On July 31, 2023, the Company also entered into a securities purchase agreement (“Second SPA”) in connection with a concurrent private placement with six of the Company’s officers and directors pursuant to which the Company issued and sold 169,968 shares of common stock and warrants to purchase up to an aggregate of 84,982 shares of common stock.

The combined effective offering price of the securities sold pursuant to the First SPA and the Second SPA was $ 4.4125 per share of common stock and related common stock purchase warrant.

The common stock purchase warrants will be exercisable commencing six months after the date of issuance at a price of $ 4.35 per share and will expire five years after they first become exercisable.

The net proceeds to the Company resulting from the First SPA and Second SPA was approximately $ 7.5 million, after deducting the placement agent fees and expenses, and other offering expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the common stock purchase warrants sold in the concurrent private placements.

In accordance with ASC 480 and ASC 815-40, the Company assessed the warrants associated with its First SPA and Second SPA and determined that the warrants qualify for equity classification.

Reverse Stock Split

On February 13, 2023 , the Company held a special meeting (the “ Special Meeting ”) of stockholders of the Company .

At the Special Meeting, the Company’s shareholders voted to approve an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of the Company’s common stock (the “Reverse Stock Split”) at a ratio between 1-for-5 and 1-for-50 .

Following the Special Meeting, the board of directors of the Company approved a 1-for-15 Reverse Stock Split.

The Reverse Stock Split became effective on February 15, 2023 .

Upon the effectiveness of the Reverse Stock Split, every 15 shares of common stock were automatically combined and converted into one share of common stock.

Appropriate adjustments were also made to all outstanding derivative securities of the Company, including all outstanding equity awards and warrants.

No fractional shares were issued in connection with the Reverse Stock Split.

Instead, all fractional shares received a cash payment based on the closing sales price on the Nasdaq Capital Market of the Company’s common stock on February 14, 2023 .

Redemption and Elimination of Series A Preferred Stock

All shares of Series A Preferred Stock that were not present in person or by proxy as of immediately prior to the opening of the polls at the Special Meeting were automatically redeemed by the Company (the “Initial Redemption”).

Any outstanding shares of Series A Preferred Stock that had not been so redeemed were redeemed automatically upon the approval at the Special Meeting of the Reverse Stock Split (the “Subsequent Redemption”).

Each share of Series A Preferred Stock redeemed was entitled to receive an amount equal to $ 0.01 in cash for each 10 whole shares of Series A Preferred Stock owned immediately prior to the Redemption.

O n March 6, 2023 , the Company filed a certificate of elimination (the “Certificate of Elimination”), with the Secretary of State of the State of Delaware with respect to the Series A Preferred Stock.

The Certificate of Elimination (i) eliminated the previous designation of 80,000 shares of Series A Preferred Stock from the Company’s Certificate of Incorporation, none of which were outstanding at the time of the filing of the Certificate of Elimination, and (ii) caused such shares of Series A Preferred Stock to resume their status as authorized but unissued and non-designated shares of preferred stock.

Dividend Preferred

On December 2, 2022, the Company’s board of directors declared a dividend of one one-thousandth of a share of Series A Preferred Stock, par value $ 0.001 per share (“Series A Preferred Stock”), for each outstanding share of the Company’s common stock, to stockholders of record on December 19, 2022.

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Each share of Series A Preferred Stock entitled the holder thereof to 1,000,000 votes per share, and each fraction of a share of Series A Preferred Stock had a ratable number of votes.

4 unchanged sentences

The shares of Series A Preferred Stock were measured at redemption value.

The value of the shares of Series A Preferred Stock as of December 31, 2022 was $ 71 .

Subsequent Events, Redemption and Elimination of Series A Preferred Stock.

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Public Offering of Common Stock

On July 2, 2021, the Company completed a public offering of 1,380,000 shares of its common stock at a purchase price of $ 15.00 per share.

The net proceeds of the offering to the Company were approximately $ 18.8 million, after deducting the underwriting discounts, commissions, and other offering expenses.

Other 2021 Securities Purchase Agreements

On August 30, 2021, the Company entered into a Securities Purchase Agreement with its legal counsel pursuant to which the Company issued 63,492 shares of common stock, at a purchase price of $ 15.75 per share.

Upon issuance of the shares, certain of the Company's outstanding financial obligations to its legal counsel were deemed paid and satisfied in full.

Settlement of Lease Liability

During 2021, the Company agreed to issue 13,333 shares of its common stock in connection with the lease termination related to its former headquarters located in Basking Ridge, NJ.

Settlement of Accrued Bonus

In January 2021, the Company issued 11,028 shares of its common stock as payment for certain executive incentive bonuses accrued in 2020.

The value of the shares of Series A Preferred Stock as of December 31, 2023 and 2022 was $ 0 and $ 71 , respectively.

Stock Purchase Warrants

4 unchanged sentences

Aggregate Intrinsic Value

(in thousands)

Outstanding, January 1, 2023

Stock Purchase Warrants ( a )

Outstanding, December 31, 2023

Exercisable, December 31, 2023

(a) 613 pre-funded warrants were excluded from the aforementioned table.

Such pre-funded warrants became exercisable on August 2, 2023.

Net Loss Per Share

All common stock share data reflects the reverse stock split effective February 15, 2023, as described in Note 14.

Subsequent Events, Reverse stock split .

All common stock share data reflects the reverse stock split effective February 15, 2023.

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period.

Diluted loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding adjusted to give effect to potentially dilutive securities.

Restricted stock and unit awards, and stock options have not been included in the diluted loss per share calculation as their inclusion would have had an anti-dilutive effect.

Due to their nominal exercise price of $ 0.001 per share, 613,314 pre-funded warrants are considered common stock equivalents and are included in weighted average shares outstanding in the accompanying consolidated statement of operations as of the closing date of the Company's July 2023 Securities Purchase Agreements.

Restricted stock and unit awards, stock options, and warrants (other than the pre-funded warrants) have not been included in the diluted loss per share calculation as their inclusion would have had an anti-dilutive effect.

The potential common stock equivalents that have been excluded from the computation of diluted loss per share consist of the following:

1 unchanged sentence

Outstanding stock options

Nonvested restricted stock and unit awards

Restricted and deferred stock units

Stock purchase warrants

2 unchanged sentences

Notes to Consolidated Financial Statements — Continued

Variable Interest Entity

As discussed in Note 1 , electroCore was the primary beneficiary of electroCore (Aust) Pty Limited (" electroCore Australia") .

electroCore has contributed certain intellectual property rights, all rights to distribute, market and sell specified products in Australia and New Zealand, and other rights outlined in the shareholders’ deed of electroCore (Aust) Pty Limited in return for 50 % of the shares of such entity.

In addition, electroCore had the right to appoint two of the four directors and exercise significant influence.

This along with the fact that electroCore was electroCore Australia ’s only supplier caused electroCore, for accounting purposes, to be the primary beneficiary of electroCoreAustralia.

The activities related to electroCoreAustralia were not material to the Company's consolidated financial statements.

Effective May 2017, the VIE had ceased operations.

On November 2, 2021, the Company terminated its interest in electroCoreAustralia and recorded the related a gain of $ 0.5 million in the accompanying Consolidated Statement of Operations for the year ended December 31, 2021 under the caption Gain on termination of joint venture.

The benefit for income taxes for the years ended December 31, 2023 and 2022 consisted of foreign taxes, state minimum tax and a benefit from the sale of state net operating losses.

Domestic and foreign components of the loss before provision for income taxes is as follows:

(in thousands) December 31, 2022

(in thousands)

December 31, 2023

December 31, 2022

The income tax (benefit)/expense from continuing operations contains the following components:

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December 31, 2022

Total current (benefit)/expense

Total current benefit

Total deferred

Total income tax (benefit)/expense

Total income tax benefit

ELECTROCORE, INC.

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Charitable contributions

Deferred FICA Tax

Lease liabilities

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Deferred tax assets, net

A reconciliation of the income tax expense (benefit) computed at the U.S.

federal statutory income tax rate of 21 % and the reported income tax expense (benefit) for the years ended December 31, 2022 and 2021 is as follows:

A reconciliation of the income tax benefit computed at the U.S.

federal statutory income tax rate of 21 % and the reported income tax benefit for the years ended December 31, 2023 and 2022 is as follows:

Year ended December 31,

Statutory rate

State tax expected (recovery), net of federal benefit

State tax recovery, net of federal benefit

State tax rate change

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Nondeductible expenses

PPP loan forgiveness

Unrealized gain from termination of joint venture — %

Change in valuation allowance for deferred tax assets

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federal losses can be carried forward indefinitely, and state losses expire in various amounts beginning in 2026 .

The Company also had accumulated losses totaling $ 3.4 million and $ 3.6 million for the years ended December 31, 2022 and 2021, respectively, in Germany which can be carried forward indefinitely.

The Company also had accumulated losses totaling $ 3.4 million for each of the years ended December 31, 2023 and 2022 , respectively, in Germany which can be carried forward indefinitely.

However, the NOL carryforwards may be, or become subject to, an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three year period in excess of 50 %, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986 , as amended, as well as similar state tax provisions.

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The New Jersey R&D credits can be carried forward seven years and will begin to expire in 2025 .

August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of

2022 (the Inflation Reduction Act) into law.

The Inflation Reduction Act

includes a new corporate alternative minimum tax (the Corporate AMT) of 15 % on

the adjusted financial statement income (AFSI) of corporations with an average

AFSI exceeding $ 1.0 billion over a three-year period.

The Corporate AMT was

effective for the Company beginning in 2023.

Given the AFSI threshold, the

Corporate AMT was not applicable to the Company in 2023, but the Corporate AMT

may have potential impacts on our future U.S.

tax expense, cash taxes and

effective tax rate.

Additionally, the Inflation Reduction Act imposes a 1 %

excise tax on the fair market value of net stock repurchases made after December

The impact of this provision was not material in 2023 and future

impacts will be dependent on the extent of share repurchases made in future

Uncertain Tax Positions

15 unchanged sentences

Stock Based Compensation

All common stock share and per share data reflects the reverse stock split effective February 15, 2023, as described in Note 14.

Subsequent Events, Reverse stock split .

All common stock share and per share data reflects the reverse stock split effective February 15, 2023.

On June 21, 2018, the Company adopted the 2018 Omnibus Equity Incentive Plan (“Plan”).

This plan reserved 0.4 million shares with an increase to be added annually beginning in 2019 through 2028 up to 4 % of the total number of shares of common stock issued and outstanding on a fully diluted basis as of the end of the immediately preceding fiscal year, providing that the aggregate number of additional shares shall not exceed a total of 3.0 million shares, and a maximum of 2.7 million shares pursuant to the exercise of stock options.

This plan reserved 0.4 million shares with an increase to be added annually beginning in 2019 through 2028 up to 4 % of the total number of shares of common stock issued and outstanding on a fully diluted basis as of the end of the immediately preceding fiscal year, provided that the aggregate number of additional shares shall not exceed a total of 3.0 million shares, and a maximum of 2.7 million shares pursuant to the exercise of stock options.

Effective January 1, 2024 , the number of shares reserved under the Plan was increased by 0.3 million to approximately 1.3 million.

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Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value

Aggregate Intrinsic Value (in thousands)

Outstanding, January 1, 2023

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Exercisable, December 31, 2023

The intrinsic value is calculated as the difference between the fair market value at December 31, 2022 and the exercise price per share of the stock options.

Options awards granted to employees generally vest over a four -year period.

The intrinsic value is calculated as the difference between the fair market value at December 31, 2023 and the exercise price per share of the stock option.

The options granted to employees generally vest over a three year period.

The following table provides additional information about stock options that are outstanding and exercisable at December 31, 2023 :

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Nonvested, December 31, 2023

In general, Units granted to employees vest over two to four years .

In general, Units granted to employees vest over two to four-year periods.

Immediately following the Company’s annual meeting of stockholders, the Company generally grants each non-employee director an equity award that vests over a 12 -month period.

Upon a non-employee director’s initial appointment or election to the board of directors, the Company grants such non-employee director an equity award subject to vesting as determined by the board of directors.

Upon a non-employee director’s initial appointment or election to the board of directors, the Company grants such non-employee director an equity award subject to vesting over a 36 -month period.

Valuation Information for Stock-Based Compensation

The fair value of each stock option award granted was estimated on the date of grant using the Black-Scholes model.

Expected volatility was based on historical common stock volatility of the Company’s peers.

Beginning in December 2022, the Company began incorporating its historical common stock volatility at a weighting of 50 % of the total composite volatility rate.

During 2023, the Company will continue to evaluate the volatility rate used to value stock options.

The fair value of each stock option award during the years ended December 31, 2023 and 2022 was estimated on the date of grant using the Black-Scholes model.

Effective July 1, 2023, expected volatility was based 100 % on the Company's historical common stock volatility.

For the 2022 period presented below, and prior to July 1, 2023, expected volatility was based on a composite comprising of (i) 50 % of the Company's historical common stock volatility and (ii) the remaining 50 % was based on historical volatility of its peers.

The risk-free interest rate was based on the average U.S.

Treasury rate that most closely resembles the expected life of the related award.

Treasury rate that most closely resembled the expected life of the related award.

The expected term of the award was calculated using the simplified method.

No dividend was assumed as the Company does not pay regular dividends on its common stock and does not anticipate paying any dividends in the foreseeable future.

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the periods presented were:

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the years ended December 31, 2023 and 2022 are summarized in the table below.

Fair value at grant date

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Dividend yield

The fair value of Units is the market close price of the Company’s common stock on the trading day immediately preceding the date of grant.

The fair value of the Units is the market close price of the Company’s common stock on the trading day immediately preceding the date of grant.

ELECTROCORE, INC.

3 unchanged sentences

Stockholders Litigation

On July 8, 2019, and August 1, 2019, purported stockholders of the Company served putative class action lawsuits in the Superior Court of New Jersey for Somerset County, captioned Paul Kuehl vs.

electroCore, Inc., et al.

SOM-L 000876-19 and Shirley Stone vs.

electroCore, Inc., et al.

SOM-L 001007-19, respectively.

In addition to the Company, the defendants include present and past directors and officers, Evercore Group L.L.C., Cantor Fitzgerald & Co., JMP Securities LLC and BTIG, LLC, the underwriters for its IPO;

and two of the Company’s stockholders.

On August 15, 2019, the Superior Court entered an order consolidating the Kuehl and Stone actions, which proceeded under Docket No.

SOM-L 000876-19.

Each plaintiff was appointed a co-lead plaintiff.

The plaintiffs filed a consolidated amended complaint, which sought certification of a class of stockholders who purchased common stock in the IPO or whose purchases are traceable to that offering.

The consolidated amended complaint alleged that the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act with respect to the registration statement and related prospectus for the IPO.

The complaint sought unspecified compensatory damages, interest, costs and attorneys’ fees.

On October 31, 2019, the Company and the other defendants filed a motion to dismiss the complaint or in the alternative to stay the action in favor of the pending federal action (discussed below).

On February 21, 2020, the court granted the defendants’ motion to dismiss the consolidated amended complaint with prejudice.

On March 2, 2020, the court entered an amended order dismissing the consolidated amended complaint with prejudice.

On March 27, 2020, the plaintiffs filed a notice of appeal with the N.J.

Superior Court – Appellate Division.

The appeal was argued on September 27, 2021.

On October 8, 2021, the Appellate Division issued an order reversing the decision of the Superior Court.

The case has been remanded to the Superior Court for oral argument on the motion to dismiss.

On November 11, 2021, the defendants filed a supplemental motion to dismiss based on the forum selection clause in our certificate of incorporation's.

On December 10, 2021, the Superior Court heard argument of the original motion to dismiss and the supplemental motion to dismiss based on the federal forum selection clause.

On December 14, 2021, the Superior Court granted the supplemental motion to dismiss based on the federal forum selection clause with prejudice and granted the original motion to dismiss without prejudice.

On January 27, 2022, the plaintiffs filed a notice of appeal to the Appellate Division.

On April 15, 2022, the plantiffs filed their appeal brief.

The brief of defendant-appellees was filed on May 16, 2022.

The appeal is fully briefed.

Oral argument is scheduled for April 19, 2023.

On September 26, 2019, and October 31, 2019, purported stockholders of the Company served putative class action lawsuits in the United States District Court for the District of New Jersey captioned Allyn Turnofsky vs.

electroCore, Inc., et al.

, Case 3:19-cv-18400, and Priewe vs.

electroCore, Inc., et al.

, Case 1:19-cv-19653, respectively.

In addition to the Company, the defendants include present and past directors and officers, and Evercore Group L.L.C., Cantor Fitzgerald & Co., JMP Securities LLC and BTIG, LLC, the underwriters for the IPO.

The plaintiffs each seek to represent a class of stockholders who (i) purchased the Company’s common stock in the IPO or whose purchases are traceable to the IPO, or (ii) who purchased common stock between the IPO and September 25, 2019.

The complaints each alleged that the defendants violated Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act, with respect to (i) the registration statement and related prospectus for the IPO, and (ii) certain post-IPO disclosures filed with the SEC.

The complaints sought unspecified compensatory damages, interest, costs and attorneys’ fees.

The Priewe case was voluntarily dismissed on February 19, 2020.

In the Turnofsky case, on November 25, 2019, several plaintiffs and their counsel moved to be selected as lead plaintiff and lead plaintiff’s counsel.

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On October 4, 2021, the plaintiffs filed a second amended complaint in the Turnofsky case.

The defendants have moved to dismiss.

Briefing on the motion was complete on January 7, 2022.

On July 5, 2022, the case was reassigned to Judge Zahid N.

Quraishi, who has ordered that he will consider the pending motion to dismiss in due course.

The defendants moved to dismiss, and briefing on the motion was completed on January 7, 2022.

On July 13, 2023, the court dismissed the second amended complaint with leave to re-plead.

The plaintiffs did not file a third amended complaint.

On August 23, 2023, the plaintiffs provided the court with an order of dismissal, and the court entered the order on August 24, 2023.

On September 8, 2023, plaintiff Carole Tibbs filed a notice of appeal to the United States Court of Appeals for the Third Circuit.

The appeal has been docketed as number 23-2655.

The principal brief of appellant and appendix were filed on January 5, 2024.

The appellees’ brief is due on or before February 15, 2024, and appellant’s reply brief is due on or before March 15, 2024.

Argument of the motion has not yet been scheduled.

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

On March 4, 2021, purported stockholder Richard Maltz brought a purported stockholder derivative action in the United States District Court for the District of New Jersey.

22 unchanged sentences

A stipulation to that effect was filed by the plaintiffs on April 14, 2021, and ordered by the court on April 30, 2021.

These cases also have been re-assigned to Judge Quraishi.

On June 9, 2023, the cases were administratively dismissed without prejudice.

The Company intends to continue to vigorously defend itself in these matters.

4 unchanged sentences

The Company expenses associated legal fees including those relating to the stockholder litigation described in this Note 12 in the period they are incurred.

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Purchase Commitments

4 unchanged sentences

The Company has no material purchase obligations as of December 31, 2023 .

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Subsequent events

Reverse stock split

On February 13, 2023, the Company held a special meeting (the “ Special Meeting ”) of stockholders of the Company .

Following the Special Meeting, the board of directors of the Company approved a 1-for-15 Reverse Stock Split.

The Reverse Stock Split became effective on February 15, 2023.

Upon the effectiveness of the Reverse Stock Split, every 15 shares of common stock were automatically combined and converted into one share of common stock.

Appropriate adjustments were also made to all outstanding derivative securities of the Company, including all outstanding equity awards and warrants.

No fractional shares were issued in connection with the Reverse Stock Split.

Instead, all fractional shares received a cash payment based on the closing sales price on the Nasdaq Capital Market of the Company’s common stock on February 14, 2023.

Redemption and Elimination of Series A Preferred Stock

Sales of net operating losses

The Company may be eligible, from time to time, to receive cash from the sale of its net operating losses under New Jersey's Department of the Treasury - Division of Taxation NOL Transfer Program.

On January 10, 2023, the Company received a net cash amount of approximately $ 211,000 from the sale of its New Jersey state net operating losses.

Severance and Other Related Charges

During the year ended December 31, 2023 , the Company entered into separation agreements with former employees of which agreements required aggregate payments totaling $ 464,000 .

The charge for these payments is included in Selling, general and administrative expense in the accompanying Statement of Operations for the year ended December 31, 2023 .

As of December 31, 2023 , the Company has an outstanding payable of $ 21,000 in connection with these charges.

This outstanding payable is included in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheet as of December 31, 2023 .

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 9A. Controls and Procedures