What changed in this filing

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Item 1A. Risk Factors

2025-03-12 compared with 2024-03-13 · 282 added, 138 removed, 1679 unchanged (20% of the section changed)

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

We will be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all.

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

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

We may be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all.

Our operations have consumed substantial amounts of cash since inception.

We believe that our growth will depend, in part, on our ability to fund our commercial efforts for our nVNS platform technology, including opportunistically pursuing research and development activities for additional indications for our gammaCore therapy, as well as our ability to invest in programs to commercialize our general wellness and human performance products.

If our revenue continues to grow, it is likely we will have increased working capital needs in connection with increased inventory purchases and accounts receivable.

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

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

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

If we seek to and are unable to raise funds on favorable terms, or at all, we may not be able to support our commercialization efforts or increase our research and development activities, and the growth of our business may be negatively impacted.

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

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

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

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

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

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

the outcome, timing of, and costs involved with negotiating, obtaining, maintaining government procurement mechanisms;

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

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

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

On November 29, 2024, we entered into an At The Market Offering Agreement (the "Sales Agreement") with H.C.

Wainwright & Co., LLC ("Wainwright") under which we may offer and sell shares of our common stock from time to time having an aggregate offering price of up to $20,000,000.

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

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

In addition, our auditors report for our 2023 financial statements contains a statement concerning our ability to continue as a “going concern”.

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

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

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

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

Our lack of consistent sufficient

liquidity could make it more difficult for us to secure additional financing

terms acceptable to us, if at all, and may materially and adversely affect the

terms of any financing that we may obtain and our stock price generally.

ability to continue our operations depends upon, among other things, our

ability to increase revenue, reduce operating expenses, and obtain additional

funding through the sale of equity and/or debt securities, debt financing,

strategic transactions, or otherwise.

However, there are significant risks and

uncertainties as to our ability to achieve these goals or to obtain required

funding on commercially reasonable terms or at all, including as a result of

the potential adverse impact on our business from macro-economic

There can be no assurance that we will have sufficient cash flow

and liquidity to fund our planned activities, which could force us to

significantly reduce or curtail our activities and ultimately potentially cease

The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders.

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

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

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

We currently have a cash-pay business channel for our prescription gConcierge and gCDirect programs and direct-to-consumer business channel through our ecommerce websites.

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

We intend to launch our next generation app-enabled consumer wellness product under the brand Truvaga and there can be no assurance that the new product will be well received or adopted, which may impact our financial results.

Our next generation app-enabled consumer wellness product has a new form factor and will be operated by a companion application.

We have limited experience in launching app-enabled devices which is important to our direct-to-consumer initiatives.

We may be unable to gain broader market acceptance for our new next generation app-enabled consumer wellness product in our direct-to-consumer channels in the United States or abroad, for a number of reasons, including:

We recently launched our next generation app-enabled consumer wellness product under the brand Truvaga and there can be no assurance that the new product will continue to be well received or adopted, which may impact our financial results.

In April 2024, we launched our next generation app-enabled consumer wellness product with a new form factor that is operated by a companion application.

We continue to have limited experience with app-enabled devices which is important to our direct-to-consumer initiatives.

Achieving broad market acceptance for app-enabled consumer wellness products in our direct-to-consumer channels in the United States or abroad, for a number of reasons, including:

established competitors with strong relationships with customers, including ecommerce and app-enabled devices, systems, marketing agencies and a critical mass of existing patients;

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We recently launched our TAC-STIM branded products for human performance within the active-duty military channel.

Funding for purchases of TAC-STIM product is subject to governmental budgetary decisions and any spending cuts may negatively impact the timing or amounts of sales to these customers, which could result in lost sales and harm our business and operation results.

Funding for purchases of TAC-STIM product is subject to governmental budgetary decisions and any spending cuts or government policies may negatively impact the timing or amounts of sales to these customers, which could result in lost sales and harm our business and operation results.

Unfavorable global economic conditions and government regulations could adversely affect our business, financial condition or results of operations.

results of operations could be adversely affected by general conditions in the

global economy and in the global financial markets.

Factors such as

geopolitical events (including the ongoing wars in Ukraine and Israel),

inflationary pressures, public health crises, and U.S.

election cycles, and changes in government administration and policies have

caused extreme volatility and disruptions in the capital and credit markets in

recent years.

Uncertainty or unfavorable global economic conditions could

result in a variety of impacts to our business, including weakening demand for

our Inspire system, and adversely impacting our ability to raise additional

capital when needed on acceptable terms, if at all.

A weak or declining economy

has strained in the past and may in the future strain our manufacturers or suppliers,

possibly resulting in supply disruption, or cause our customers to delay making

payments for our services.

Further, the Trump administration has proposed or

enacted tariffs and substantial changes to trade policies, which could

adversely affect our business.

For example, the Trump administration has

imposed tariffs on certain foreign products, including most recently from

Canada, Mexico and China, that in the past have resulted in and may result in

future retaliatory tariffs on U.S.

goods and products.

We cannot predict

whether these policies will continue, or if new policies will be enacted, or

the impact, if any, that any policy changes could have on our business.

the foregoing could harm our business and we cannot anticipate all of the ways

in which the economic climate and financial market conditions could adversely

affect our business.

There is also uncertainty surrounding potential changes to

the healthcare regulatory environment

in the United States, and it is not possible to predict how these changes may

be implemented, and the ultimate effects of such

changes on our business.

In addition, the U.S.

federal government and other

governments may reduce funding for health care or other

programs or make changes that adversely affect the number of persons eligible

for certain programs, the services provided to enrollees

in such programs and premiums we can charge.

The levels of U.S.

government spending are difficult to predict and are

subject to significant risk.

Considerable uncertainty exists regarding how

future budget and program decisions will unfold, including

the spending priorities of the new presidential administration and Congress,

and what challenges budget reductions, if any, will

present for our business and our industry generally.

For example, on January

20, 2025, President Trump established by executive order

DOGE Service Temporary Organization ("DOGE") to reform

federal government processes and reduce expenditures, and

on February 5, 2025, the Centers for Medicare & Medicaid Services, or CMS,

announced that it is collaborating with DOGE to determine

where there may be opportunities for more effective and efficient use of

Further, there are reports that the administration

is exploring and implementing policies which may put limits on, or freeze,

credit card spending by government employees on behalf of government agencies,

which could adversely affect our business with the VA.

Additionally, the Trump administration

took several Executive Actions, including the issuance of a number of Executive

Orders, that imposed significant burdens on, or otherwise materially delayed,

the FDA’s ability to engage in routine oversight activities, such as

implementing statutes through rulemaking, issuance of guidance, and review and

approval of marketing applications.

It is difficult to predict whether or how

these orders will be rescinded and replaced under the current or future administrations.

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

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

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

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

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

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

We recently launched new cash pay initiatives for our Truvaga consumer product and prescription gammaCore therapy, including our ecommerce websites in both the United States and United Kingdom.

We launched new cash pay initiatives for our Truvaga consumer product and prescription gammaCore therapy, including our ecommerce websites in both the United States and United Kingdom.

Online sales are subject to a number of risks.

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

We depend on our technology vendors to manage “up-time” of the front-end ecommerce store, manage regulatory control measures around prescriptions, the intake of our orders, and export orders for fulfillment.

We depend on our technology vendors to manage “up-time” of the front-end ecommerce store, manage regulatory control measur es around prescriptions, the intake of our orders, and export orders for fulfillment.

Any failure on the part of our third-party ecommerce vendors, or in our ability to transition third-party services effectively, could result in lost sales and harm our business.

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

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

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

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

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As of December 31, 2024 , our accumulated deficit was $ 177.1 million.

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

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

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

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

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

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

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

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

Because of the numerous risks and uncertainties associated with our commercialization efforts as well as our research and clinical development activities, uncertainly remains around the timing to achieve or maintain profitability.

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

and UK commercial infrastructure.

and UK commercial infrastructure as we commercialize our nVNS platform technology.

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

As of December 31, 2023, we had cash, cash equivalents and restricted cash of $ 10.6 million.

As of December 31, 2024 , we had cash, cash equivalents, restricted cash and marketable securities of $12.2 million.

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For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the global capital markets.

Similarly, the current Russia-Ukraine war, and other conflicts including military activities in the Red Sea and Persian Gulf as well as those relating to the Gaza Strip and Israel, may exacerbate volatility in the global capital markets or disrupt the global supply chain and energy markets.

Similarly, the current Russia-Ukraine war, and other conflicts including military activities in the Red Sea and Persian Gulf as well as those relating to the Gaza Strip and Israel, and the results of the recent elections in the United States may exacerbate volatility in the global capital markets or disrupt the global supply chain and energy markets.

Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely.

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Any significant increases in inflation and related increase in interest rates could have a material adverse effect on our business, results of operations and financial condition.

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

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

Future acquisitions, including the recently announced acquisition of NURO, strategic investments, or alliances could disrupt our business and harm our business, financial condition, and operating results.

In addition to our pending transaction to potentially acquire NURO, we may in the future explore potential acquisitions of companies and technologies, strategic investments, or alliances to strengthen our business.

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

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anticipated benefits may not materialize;

diversion of management's attention from our core business and disruption of ongoing operations;

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

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Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses or the impairment of goodwill, any of which could harm our business, financial condition, and operating results.

The closing of our acquisition of NURO is subject to customary closing conditions, and there can be no assurance that NURO will meet the closing conditions, and failure to close the transaction may harm our business and cause our stock price to fall.

On December 17, 2024, we entered into a definitive agreement to acquire NURO (the “NURO Agreement).

Consummation of the transaction is subject to customary closing conditions, including approval by holders of at least a majority of the outstanding shares of NURO common stock entitled to vote on the merger, and the filing with the SEC of NURO’s Form 10-K with respect to the fiscal year ended December 31, 2024 .

There can be no assurance that NURO will meet the closing conditions set forth in the NURO Agreement and failure to consummate the transaction may harm the business and cause our stock price to fall.

Unanticipated costs relating to our acquisition of NURO could have an adverse impact on our business, financial condition, and operating results.

We have incurred substantial legal, accounting, financial advisory and other acquisition-related costs, and our management has devoted considerable time and effort in connection with our acquisition of NURO.

If the acquisition of NURO is not completed, we will bear certain fees and expenses associated with the acquisition without realizing the benefits of the acquisition.

If the acquisition of NURO is completed, we expect to incur substantial expenses in connection with integrating the business, operations, network, systems, technologies, policies and procedures of NURO.

The fees and expenses may be significant and could have an adverse impact on our business, financial condition, and operating results.

We may not be able to fully realize the benefits from the NURO Transaction.

The acquisition of NURO may not perform as expected.

If we are unsuccessful at, among other things, integrating NURO into our operations or managing the NURO business, our revenues and margins could be adversely affected, and our business could suffer.

See also “Risk Related to our Financial Position, Operating Results and Need for Additional Capital - Future acquisitions, including the recently announced acquisition of NURO, strategic investments, or alliances could disrupt our business and harm our business, financial condition, and operating results .

Litigation may arise in connection with our acquisition of NURO, which could be costly, prevent consummation of the transaction, divert management’s attention, and otherwise harm our business, financial condition, and results of operations.

Litigation in connection with acquisitions is not unusual and we are aware that purported shareholders of NURO have made written demands, including that NURO’s proxy statement omitted material information with respect to the proposed merger and allegations of breach of fiduciary duties by the directors of NURO.

Although NURO believes that such allegations are immaterial and that no supplemental disclosures are required by applicable law, rule, regulation or statute, there can be no assurance that litigation will not ensue.

Such litigation may be time-consuming and expensive and may distract our management from running the day-to-day operations of our business.

The litigation costs and diversion of management’s attention and resources to address the claims and counterclaims in any litigation related to our acquisition of NURO may adversely affect our business, results of operations, prospects, and financial condition.

If our acquisition of NURO is not consummated for any reason, litigation may be filed in connection with the failure to consummate the transaction.

Any litigation related to the transaction may result in negative publicity or an unfavorable impression of us, which could adversely affect the price of our common stock, impair our ability to recruit or retain employees, damage our relationships with our customers and business partners, or otherwise harm our operations and financial performance.

Additionally, NURO is, and following the closing of the acquisition, the Company may be, subject to the laws and regulations applicable to NURO, including a settlement order between NURO and the FTC entered into on March 4, 2020, which enjoins NURO from engaging in deceptive acts or practices in violation of the FTC Act in the manufacturing, labeling, advertising, marketing, distribution and sale of certain of NURO’s stimulation devices.

Any violation of such laws and regulations, including the settlement, could have an adverse impact on our business, financial condition, and operating results.

C losing down the DPNCheck business may be costly and provide additional regulatory scrutiny.

We do not intend to continue operations of the DPNCheck business.

While NURO has agreed to take steps to close down the DPNCheck business prior to closing, other than the agreement which has already been signed for the DPNCheck rights in Japan, there can be no assurance that NURO will be ab le to close down DPNCheck prior to closing the transaction.

DPNCheck is a medical device with both insurance coverage and active customers.

Shutting down the business may require adherence to certain regulatory conditions which could be costly or create contingent liability to the Company and may harm our business, financial condition, and operating results.

Risks Related to Our Business

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As a result of the demographics of the consumers covered under these programs, and the complexity of the calculations as well as the potential magnitude and timing of settlement for amounts due from insurers and government-sponsored or national health insurance programs, these accounts receivable may be subject to billing and realization risk.

We expect a portion of our 2024 sales will be made pursuant to the distribution agreement with Lovell Government Services (“Lovell”) and their contract vehicles.

A significant portion of our sales will be made to the VA pursuant to our FSS contract of via open market purchases.

federal government and other governments may reduce funding for health care or other programs or make changes that adversely affect the number of persons eligible for certain programs, the services provided to enrollees in such programs and premiums we can charge.

The levels of U.S.

federal government spending are difficult to predict and are subject to significant risk.

Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally.

For example, on January 20, 2025, President Trump established by executive order DOGE to reform federal government processes and reduce expenditures, and on February 5, 2025, the Centers for Medicare & Medicaid Services, or CMS, announced that it is collaborating with DOGE to determine where there may be opportunities for more effective and efficient use of resources.

Further, there are reports that the administration is exploring and implementing policies which may put limits on, or freeze, credit card spending by government employees on behalf of government agencies, which could adversely affect our business with the VA.

Any reduction in government spending or limitations put in place through government processes to reduce expenditures could have an adverse effect on the results of operations and financial condition.

Furthermore, we expect a portion of our 2025 sales will be made pursuant to the distribution agreement with Lovell Government Services (“Lovell”) and their contract vehicles.

As a result of this relationship an increasing portion of gammaCore therapy sales in the government channel will be processed through Lovell and payment made to us by Lovell according to the terms of the Lovell distribution agreement.

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

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

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

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

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however, such clearances do not necessitate adoption by physicians.

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

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

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

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

In order for our prescription gammaCore therapy to gain widespread adoption, we must successfully demonstrate to physicians the medical and economic benefits of our prescription gammaCore therapy compared to competitors’ products, including pharmaceutical and neuromodulation devices that have been marketed for the treatment of different forms of primary headache by competitors with greater financial or other resources.

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

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

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

physician and payor acceptance of our prescription gammaCore therapy;

physician, prosthetics, and payor acceptance of our prescription gammaCore therapy;

patients' acceptance of our nVNS platform technology;

customer acceptance of our general wellness and human performance products;

the timing and amount of TAC-STIM sales;

the timing and amount of TAC-STIM sales and cash disbursements;

payor adoption;

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the timing of customer budget cycles.

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

Our results may also fluctuate on a seasonal basis due to the seasonality of cluster and migraine headache attacks for our medical device products and the holiday seasons for our general wellness products, which could affect the comparability of our results between periods.

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

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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 extended to June 14, 2025.

Although we continue to work with the appropriate government personnel to obtain a follow-on FSS contract, there can be no assurance that the VA/DoD will accept our follow-on application and replace our contract which may limit or eliminate our ability to sell certain gammaCore products into the government channel pursuant to our qualifying FSS contract or individual facilities that utilize our FSS contract number for open market purchases.

Although we continue to work with the appropriate government personnel to obtain a follow-on FSS contract, there can be no assurance that the VA will accept our follow-on application and replace our contract which may limit or eliminate our ability to sell certain gammaCore products into the government channel pursuant to our qualifying FSS contract or individual facilities that utilize our FSS contract number for open market purchases.

The delay in contract replacement or loss of our FSS contract altogether could adversely affect our business, results of operations, and financial condition.

In August 2023, we signed a non-exclusive distribution agreement with Lovell Government Services (Lovell) providing Lovell the right to list and distribute certain gammaCore products into the federal market.

The gammaCore products offered through Lovell provide government customers with similar product configuration options to those currently sold through our existing FSS contract and open market sales made directly to individual VA/DoD facilities.

Between November 2023 and January 2024, certain gammaCore products were added to the FSS, the VA/DoD’s Distribution and Pricing Agreement (DAPA), GSA Advantage, and Defense Logistics Agency’s ECAT system procurement portals through the Lovell contract vehicles, enabling the purchase of gammaCore products within the government channel and throughout the federal markets, including, but not limited to, the VA/DoD.

Between November 2023 and January 2024, certain gammaCore products were added to the FSS, the VA’s Distribution and Pricing Agreement (DAPA), GSA Advantage, and Defense Logistics Agency’s ECAT system procurement portals through the Lovell contract vehicles, enabling the purchase of gammaCore products within the government channel and throughout the federal markets, including, but not limited to, the VA.

We expect a significant portion of our 2025 sales to continue in the government channel broadly pursuant to our FSS contract if extended and / or through our relationship with Lovell and its qualifying FSS, GSA, DAPA, ECAT contracts for which gammaCore has been added.

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Our customer base is concentrated.

During the years ended December 31, 2023 and 2022, revenue from VA/DoD facilities pursuant to the terms and conditions of our qualifying contract under the FSS and open market sales represented 60.1% and 59.3% of our total revenue, respectively.

In 2023, eight specific VA/DoD facilities represented approximately 63.8% of our revenue from this channel, and two of those facilities accounted for more than 10% individually.

During the years ended December 31, 2024 and 2023 , revenue from VA facilities pursuant to the terms and conditions of our qualifying contract under the FSS and open market sales represented 70.6 % and 60.1 % of our total revenue, respectively.

In 2024 , one specific VA facility represented approximately 11.3 % of our revenue from this channel.

If we were to lose one or more of our significant customers, our revenue may be adversely affected.

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

We expect an increasing portion of our 2024 sales will be made pursuant to the distribution agreement with Lovell and its contract vehicles, concentrating our customer base even further as revenue generated from the VA/DoD facilities pursuant to the terms and conditions of our qualifying contract under the FSS and open market sales is partially shifted to sales under our agreement with Lovell.

Any delay in payments by our customers as well as any disagreement, disagreement or change in relationship status with Lovell or other customers could adversely affect our business, results of operations, and financial condition.

We expect an increasing portion of our 2025 sales will be made pursuant to the distribution agreement with Lovell and its contract vehicles, concentrating our customer base even further as revenue generated from the VA facilities pursuant to the terms and conditions of our qualifying contract under the FSS and open market sales is partially shifted to sales under our agreement with Lovell.

Any delay in payments by our customers as well as any disagreement, disagreement or change in relationship status with the FSS procurement office, Lovell or other customers could adversely affect our business, results of operations, and financial condition.

We currently generate a small portion of our revenue through distribution of other manufacturers products through our government sales channel, and any issue arising from these products may impact our relationship with the Veterans Administration resulting in negative impact to our business.

Pursuant to a distribution agreement with Lovell, we currently distribute products manufactured by other companies throughout the VA.

We do not control the production of these products, their regulations, or efficacy.

There can be no assurance that the VA will adopt these products and any issues stemming from the use of these products distributed by or on behalf of the Company may adversely affect our relationship with the VA and negatively impact our business, results of operations, and financial condition.

Additionally, there can be no assurance that we will continue to distribute such products throughout the VA in the future, which could negatively impact our business, results of operations, and financial condition.

We currently distribute products manufactured by other companies.

Any disruption in our supply chain, or our failure to successfully manage our relationships with our suppliers could harm our business.

We distribute products supplied by other companies.

If we fail to manage our relationships with our suppliers effectively, or if our suppliers experience delays, disruptions, capacity constraints, shortage of raw materials or components, or quality control problems in their operations, our ability to ship products may be impaired and our competitive position and reputation could be harmed.

In addition, any adverse change in our suppliers financial or business condition could disrupt our ability to supply quality products to our customers.

Such reliance increases our risks of various supply chain disruptions.

In addition, qualifying a new supplier could be an expensive and lengthy process.

If we experience increased demand that our suppliers are unable to fulfill, or if they are unable to provide us with adequate supplies of high-quality products for any reason, we could experience a delay in our order fulfillment, and it may have a material adverse effect on our business, results of operations, and financial condition.

Furthermore, we expect our suppliers to comply with all legal requirements relating to health and safety, labor relations, the environment, supply chain ethics, and transparency.

If any of our suppliers engage in or are perceived to have engaged in legal or ethics violations, we may be unable to continue our relationship with such suppliers.

If we are required to find alternative sources of supply, qualification of alternative suppliers and the establishment of reliable supplies could result in delays and a possible loss of sales, which may have a material adverse effect on our business, results of operations, and financial condition.

Furthermore, the actions of our suppliers could, in certain instances, result in reputational damage to us.

Even when we effectively manage our suppliers and logistics partners, forces outside our control may still disrupt our supply chain.

Such factors may include catastrophic events such as the COVID-19 pandemic, raw material shortages and price volatility;

and sanctions, war, or other geopolitical conflict.

Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results.

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Our information technology systems, some of which are managed by third parties, and the information technology systems of third parties may be susceptible to damage, disruptions, or shutdowns due to computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, user errors, or catastrophic events.

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

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

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potential loss of key employees of the acquired business;

increased legal and accounting compliance costs.

increased transaction, legal and accounting compliance costs.

We do not know if we will be able to identify acquisitions or strategic relationships we deem suitable, whether we will be able to successfully complete any such transactions on favorable terms or at all, or whether we will be able to successfully integrate any acquired business, product, or technology into our business or retain any key personnel, suppliers, or distributors.

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If the price of our common stock is low or volatile, we may be unable to consummate any acquisitions, investments, or strategic alliances using our stock as consideration.

If serious adverse events or other undesirable side effects are identified during the use of our prescription gammaCore therapy in clinical trials or IITs (collectively and unless the context requires otherwise, “clinical trials”) , it may adversely affect our development of such product candidates.

Undesirable side effects caused by our prescription gammaCore therapy could cause us or regulatory authorities to interrupt, delay, or halt nonclinical studies and future clinical trials or could make it more difficult for us to enroll patients in clinical trials and could, if injuries occur, result in product liability litigation.

If serious adverse events or other undesirable side effects or unexpected characteristics of our prescription gammaCore therapy are observed in investigator-sponsored trials, further clinical development of such product candidate may be delayed or we may not be able to continue development of such product candidate at all, and the occurrence of these events could have a material adverse effect on our business.

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

If serious adverse events or other undesirable side effects are identified during the use of our prescription gammaCore therapy in clinical trials or IITs (collectively and unless the context requires otherwise, “clinical trials”) or general wellness product consumer studies, it may adversely affect our development of such product candidates.

Undesirable side effects caused by our prescription gammaCore therapy or general wellness products could cause us or regulatory authorities to interrupt, delay, or halt nonclinical studies and future clinical trials or could make it more difficult for us to enroll patients in clinical trials and could, if injuries occur, result in product liability litigation.

If serious adverse events or other undesirable side effects or unexpected characteristics of our prescription gammaCore therapy or general wellness products are observed in clinical trials or consumer studies, further clinical development of such product candidate may be delayed or we may not be able to continue development of such product candidate at all, and the occurrence of these events could have a material adverse effect on our business.

Undesirable side effects caused by our prescription gammaCore therapy or general wellness products could also result in an inability to obtain consumer confidence in the efficacy of nVNS, the delay or denial of regulatory clearance or approval by the FDA or other regulatory authorities or in more restrictive labels than we desire.

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

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Any of these occurrences may harm our business, financial condition, and prospects significantly.

Our cost-control efforts might not assure profitability and may affect morale and make it difficult to retain employees or attract new ones.

We have from time to time previously implemented reductions in force affecting a large portion of our workforce, redeployed resources across our organization, and taken other measures to reduce our operating expenses.

Our cost-control efforts might not assure profitability and may affect morale and make it difficult to retain employees, independent contractors, or attract new ones.

We have previously implemented reductions in force affecting a large portion of our workforce, redeployed resources across our organization, and taken other measures to reduce our operating expenses.

These efforts do not assure profitability.

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Reductions in force, strategic redeployment, and other cost-cutting measures could adversely affect morale in our organization and our reputation as an employer, which could lead to the loss of valued employees and could make it more difficult for us to hire new employees in the future, and the reduction of our headcount could adversely affect our operations and make it more difficult for us to pursue new opportunities and initiatives in the future.

We have outsourced certain finance and accounting functions and may outsource other back-office functions, which will make us more dependent upon third parties.

In an effort to be more efficient and generate cost savings, we have outsourced certain finance and accounting functions.

As a result, we rely on third parties to ensure that our needs are sufficiently met.

This reliance subjects us to risks arising from the loss of control over processes, changes in pricing that may affect our operating results, and potentially, termination of these services by our suppliers.

The failure of our service providers to perform services in a satisfactory manner may have a significant adverse effect on our business.

We may outsource other back-office functions in the future, which would increase our reliance on third parties.

If we fail to properly manage our anticipated growth, our business could suffer.

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

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

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

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

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

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

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

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

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If we are unable to manage our growth effectively, it may be difficult for us to execute our business strategy, and our operating results and business could suffer.

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

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

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

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

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

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

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

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

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

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

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

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

administration of President Trump may support potential trade proposals (including import tariffs and other tariffs on China and other U.S.

trading partners), modifications to international trade policy, and other changes that may affect U.S.

trade relations with other countries.

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the imposition of new trade restrictions;

disruptions caused by Brexit.

divergences in UK and EU regulation, increasing the regulatory burden on electroCore .

If we experience any of these risks, our sales in non-U.S.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

While such returns are expected to be nominal and within management’s expectations and the provisions established, future return rates may increase more than anticipated.

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All of our executive officers and other employees are at-will employees and therefore may terminate employment with us at any time with no advance notice.

The replacement of any of our key personnel likely would involve significant time and costs, may significantly delay or prevent the achievement of our business objectives, and may harm our business.

The replacement of any of our key personnel would likely involve significant time and costs, may significantly delay or prevent the achievement of our business objectives, and may harm our business.

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

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

If we are unable to retain the independent consultants in our sales force or attract independent consultants, our sales efforts may be adversely impacted.

The independent consultants in our sales force may terminate their services at any time.

We have experienced and are likely to continue to experience turnover among independent consultants.

The departure for any reason of any of our independent consultants could have a negative impact on our sales and operating results.

While we take steps to help train, motivate, and retain independent consultants, we cannot accurately predict the number or sales productivity of our independent consultants.

Our operating results will be harmed if we and the independent consultants in our sales force do not generate sufficient interest in our products to retain such consultants and attract new consultants.

The number and sales productivity of the consultants could be harmed by several factors, including:

If we are unable to retain or attract the independent contractors in our sales force, our sales efforts may be adversely impacted.

The independent contractors in our sales force may terminate their services at any time.

We have experienced and are likely to continue to experience turnover among independent contractors.

The departure for any reason of any of our independent contractors could have a negative impact on our sales and operating results.

While we take steps to help train, motivate, and retain independent contractors, we cannot accurately predict the number or sales productivity of our independent contractors.

Our operating results will be harmed if we and the independent contractors in our sales force do not generate sufficient interest in our products to retain such contractors and attract new contractors.

The number and sales productivity of the contractors could be harmed by several factors, including:

any adverse publicity regarding us, our products, our distribution channel, or our competitors;

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lack of interest in existing or new products or their failure to achieve desired sales results;

lack of a compelling business opportunity sufficient to generate the interest and commitment of new independent consultants;

any changes we might make to our independent consultant sales compensation plan;

lack of a compelling business opportunity sufficient to generate the interest and commitment of new independent contractors;

any changes we might make to our independent contractors sales compensation plan;

any negative public perception of our company or our products;

any negative public perception of our independent consultants;

any negative public perception of our independent contractors;

our actions to enforce our policies and procedures;

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general economic and business conditions.

We may be held responsible for certain taxes or asses sments and other obligations relating to the activities of our independent consultants, which could harm our financial condition and operating results.

Our independent consultants are subject to taxation, and in some instances, legislation or governmental agencies impose an obligation on us to collect or withhold taxes, such as value added taxes or income taxes, and to maintain appropriate records.

In the event that local laws and regulations or the interpretation of local laws and regulations change to require us to treat our independent consultants as employees, or that our independent consultants are deemed by local regulatory authorities in one or more of the jurisdictions in which we operate to be our employees rather than independent contractors under existing laws and interpretations, or our independent consultants are deemed to be conducting business in countries outside of the country in which they are authorized to do business, we may be held responsible for social security, income, and other related taxes in those jurisdictions, plus any related assessments and penalties, which could harm our financial condition and operating results.

If our independent consultants were deemed to be employees rather than independent contractors, we may be obligated to pay certain employee benefits, such as workers compensation and unemployment insurance.

Further, if our independent consultants are misclassified as employees, we would also face the threat of increased vicarious liability for their actions.

We may be held responsible for certain taxes or asses sments and other obligations relating to the activities of our independent contractors, which could harm our financial condition and operating results.

Our independent contractors are subject to taxation, and in some instances, legislation or governmental agencies impose an obligation on us to collect or withhold taxes, such as value added taxes or income taxes, and to maintain appropriate records.

In the event that local laws and regulations or the interpretation of local laws and regulations change to require us to treat our independent consultants as employees, or that our independent consultants are deemed by local regulatory authorities in one or more of the jurisdictions in which we operate to be our employees rather than independent contractors under existing laws and interpretations, or our independent contractors are deemed to be conducting business in countries outside of the country in which they are authorized to do business, we may be held responsible for social security, income, and other related taxes in those jurisdictions, plus any related assessments and penalties, which could harm our financial condition and operating results.

If our independent contractors were deemed to be employees rather than independent contractors, we may be obligated to pay certain employee benefits, such as workers compensation and unemployment insurance.

Further, if our independent contractors are misclassified as employees, we would also face the threat of increased vicarious liability for their actions.

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

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

Social media, including Instagram, Snapchat, TikTok, Facebook, LinkedIn and X, the social media platform formerly known as and Twitter, are increasingly being used to communicate about our products, clinical development programs, and, at present, the conditions our prescription gammaCore therapy is being developed to treat and potential general wellness improvements.

Social media, including Instagram, Snapchat, TikTok, Facebook, LinkedIn and X, the social media platform formerly known as Twitter, are increasingly being used to communicate about our products, clinical development programs, and, at present, the conditions our prescription gammaCore therapy is being developed to treat and potential general wellness improvements.

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

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We are offering products to government customers through two different contracting vehicles, which may cause confusion for purchasing agents and result in frustration by customers.

Beginning in November 2023, gammaCore products have been available to government customers directly through our existing FSS contract, via open market purchases for individual VA/DoD facilities, and through Lovell.

Offering different products at different price points may cause confusion for purchasing agents, which may result in loss or delay of sales to customers.

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Any change in the status of the relationship or Joerns’ ability to execute orders could negatively impact our business.

Our new app-enabled consumer product relies on third-party vendor for application development and management which puts a significant dependency on the third-party vendor.

We intend to launch our next generation app-enabled consumer product under the Truvaga brand in 2024.

Our new app-enabled consumer product relies on third-party vendors for application development and management which puts a significant dependency on the third-party vendor.

We launched our next generation app-enabled consumer product under the Truvaga brand in 2024.

The customer-facing application was developed by a third-party vendor on their proprietary platform.

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Establishing additional or replacement suppliers for the components or processes used in gammaCore, if required, may not be accomplished quickly.

If we are able to find a replacement supplier, such a replacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay.

If we are able to find a replacement supplier within the safety stock level , such a replacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay.

While we seek to maintain adequate inventory of the single-source or sole-source components and materials used in our products, any interruption or delay in the supply of components or materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to cancel orders.

If our third-party suppliers fail to deliver the required commercial quantities of materials, or the level of services we require, on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement suppliers capable of production at a substantially equivalent cost in substantially equivalent volumes and quality and on a timely basis, the continued commercialization of gammaCore would be impeded, delayed, limited, or prevented, which could harm our business, results of operations, financial condition, and prospects.

We have limited experience with the supply chain of the new product we intend to launch, our next generation app-enabled consumer wellness product under the brand Truvaga, and are dependent on third parties for related software development.

Many of the critical components that will be used in our next generation app-enabled consumer wellness product that we plan to launch under the brand name Truvaga are supplied to us from either a primary, or secondary manufacturer, as well as multiple suppliers of high-demand consumer electronic components, certain of whom are sole-source suppliers.

We have limited experience with the supply chain of our next generation app-enabled consumer general wellness product under the brand Truvaga and are dependent on third parties for related software development.

Many of the critical components that are used in our next generation app-enabled consumer general wellness product that we launched under the brand name Truvaga are supplied to us from either a primary or secondary manufacturer, as well as multiple suppliers of high-demand consumer electronic components, certain of whom are sole-source suppliers.

We also have limited experience in selling an app-enabled consumer wellness product, and therefore we may be unable to reliably forecast the demand and inventory requirements for this type of product, which could directly or indirectly have an adverse effect on our business, results of operations and financial condition.

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If our third-party suppliers fail to deliver the required commercial quantities of materials, or our software developers fail to deliver or the level and quality of services, we require, on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement suppliers or developers capable of production or development at a substantially equivalent cost in substantially equivalent volumes and quality and on a timely basis, the continued commercialization of this product would be impeded, delayed, limited, or prevented, which could have an adverse effect on our business, results of operations, financial condition and prospects.

We have limited experience with the supply chain of our human performance product under the brand TAC-STIM and are dependent on third parties for related software development.

Many of the critical components that we use in our human performance product under the brand name TAC-STIM are supplied to us from either a primary or secondary manufacturer, as well as multiple suppliers of high-demand consumer electronic components, certain of whom are sole-source suppliers.

Orders through government customers are affected by a variety of factors and therefore we may be unable to reliably forecast the demand and inventory requirements for this type of product, which could directly or indirectly have an adverse effect on our business, results of operations and financial condition.

If our third-party suppliers fail to deliver the required commercial quantities of materials on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement suppliers or developers capable of production or development at a substantially equivalent cost in substantially equivalent volumes and quality and on a timely basis, the continued commercialization of this product would be impeded, delayed, limited, or prevented, which could have an adverse effect on our business, results of operations, financial condition and prospects.

Outside the United States, we rely on a single third-party distributor to effectively distribute the majority of our products.

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

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

We depend on this distributor’s efforts;

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

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

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

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

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standards, insufficient training of personnel, communication difficulties or change in local regulations.

We remain responsible for ensuring that clinical trials are conducted in accordance with the general investigational plan and protocols for the study.

We remain responsible for ensuring that clinical trials are conducted in accordance with the general investigation plan and protocols for the study.

Moreover, the FDA requires us to comply with GCP for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of patients in clinical trials are protected.

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

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

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

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If we are unable to obtain or maintain third-party manufacturing for commercial supply of our product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our prescription gammaCore therapy successfully.

We are required to maintain high levels of inventory due to lead times with single-source consumer electronic components vendors, which could consume a significant amount of our resources, reduce our cash flows, and lead to inventory impairment charges.

We are required to maintain adequate levels of inventory due to lead times with single-source consumer electronic components vendors, which could consume a significant amount of our resources, reduce our cash flows, and lead to inventory impairment charges.

Our nVNS technology platform consists of a substantial number of individual components.

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In addition, as of December 31, 2024 , we had approximately $ 1.7 million of inventory.

There are risks that growth in our business, including our recently launched non-prescription, human performance and general wellness offerings, may result in demand that could outstrip our current inventory, in which case we would be subject to various supply chain, manufacturing, and operational risks.

There are risks that growth in our business, including our recently launched non-prescription, human performance and general wellness offerings, may result in demand that could exceed our current inventory, in which case we would be subject to various supply chain, manufacturing, and operational risks.

If not mitigated fully, this could negatively impact our ability to commercialize our products and have a material adverse effect on our brands, revenues, expenses, results of operations, and financial condition.

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We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.

Thus, we may not be able to stop a competitor from marketing and selling in foreign countries products and services that are the same as or similar to our products and services, and our competitive position in the international market would be harmed.

Thus, we may not be able to stop a competitor from marketing and selling products and services in foreign countries that are the same as or similar to our products and services, and our competitive position in the international market would be harmed.

We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.

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The regulatory framework for privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

As a result of a new SEC rule on cybersecurity disclosure, we are required to disclose, pursuant to new Item 1.05 of SEC Form 8-K, any cybersecurity incident that we determine to be material and describe the material aspects of the nature, scope, and timing of the incident, as well as the material impact or reasonably likely material impact of the incident on us, including our financial condition and results of operations.

For example, the recent suspension of offensive cyberoperations against Russia by U.S.

Cyber Command.

As a result of SEC rules on cybersecurity disclosure, we are required to disclose, pursuant to new Item 1.05 of SEC Form 8-K, any cybersecurity incident that we determine to be material and describe the material aspects of the nature, scope, and timing of the incident, as well as the material impact or reasonably likely material impact of the incident on us, including our financial condition and results of operations.

We will also be required to describe, on a periodic basis, our processes, if any, for the assessment, identification, and management of material risks from cybersecurity threats, and describe whether any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition, our board’s oversight of risks from cybersecurity threats and management’s role in assessing and managing material risks from cybersecurity threats .

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cyber or phishing-attacks;

utilization of Artificial Intelligence;

attempts to gain unauthorized access to our data and systems;

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We could experience additional expense in arranging for new facilities, technology, services and support.

In addition, the failure of third-party data centers or any other third-party providers to meet our requirements could result in interruption in the development, availability or functionality of our medical devices and wellness products, including the launch and use of our next generation Truvaga app-enabled consumer product.

The satisfactory performance, reliability, development and availability of our next generation Truvaga app-enabled consumer product is critical to our reputation and our ability to acquire and retain customers, as well as to maintain adequate customer service levels.

The satisfactory performance, reliability, development and availability of our Truvaga app-enabled consumer product is critical to our reputation and our ability to acquire and retain customers, as well as to maintain adequate customer service levels.

If the interface of our next generation app is not considered user friendly by our customers or our app does not function correctly, our customers may become frustrated and not order any existing or new wellness products.

Our future revenue may depend in part on the number of customers using our app in connection with our next generation consumer product in fulfilling their wellness needs.

Unavailability of our app in connection with the use of our next generation consumer product could materially and adversely affect consumer perception of our brand.

The unavailability of our app in connection with the use of our next generation consumer product could materially and adversely affect consumer perception of our brand.

The occurrence of a natural disaster, power loss, telecommunications failure, data loss, computer virus, an act of terrorism, cyberattack, vandalism or sabotage, act of war or any similar event, or a decision to close our third-party data centers on which we normally operate or the facilities of any other third-party provider without adequate notice or other unanticipated problems at these facilities could result in lengthy interruptions and affect the launch and use of our next generation Truvaga app-enabled consumer product.

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gammaCore is also subject to extensive governmental regulation in foreign jurisdictions, such as Europe, and our failure to comply with applicable requirements could cause our business to suffer.

In the EEA, gammaCore must currently comply with the Essential Requirements laid down in (i) Annex I to Directive 93 / 42 /EEC and (ii) EU Medical Device Regulation 2017 / 745 , or MDR, on the approximation of the laws of the member states relating to medical devices or the EU Medical Devices Directive.

In the EEA and UK, gammaCore must currently comply with the Essential Requirements in Annex I to Directive 93/42/EEC, relating to the approximation of the laws of the member states concerning medical devices or the EU Medical Devices Directive (UK law, implemented through the Medical Devices Regulations 2002, continues to be based on these requirements).

Compliance with these requirements is a prerequisite to be able to affix the CE mark to gammaCore, without which they cannot be marketed or sold in the EEA.

To demonstrate compliance with the Essential Requirements and obtain the right to affix the CE Mark medical devices manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification.

Except for low risk medical devices (Class I with no measuring function and which are not sterile), where the manufacturer can issue an EC Declaration of Conformity based on a self-assessment of the conformity of its products with the Essential Requirements, a conformity assessment procedure that requires the intervention of a notified body, which is an organization designated by a competent authority of an EEA country to conduct conformity assessments.

Except for low-risk medical devices (Class I with no measuring function and which are not sterile) where the manufacturer can issue an EC Declaration of Conformity based on a self-assessment of the conformity of its products with the Essential Requirements, a conformity assessment procedure requires the intervention of a notified body, which is an organization designated by a competent authority of an EEA country to conduct conformity assessments.

Depending on the relevant conformity assessment procedure, the notified body would audit and examine the technical documentation and the quality system for the manufacture, design and final inspection of the medical devices.

The notified body issues a CE Certificate of Conformity following successful completion of a conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the Essential Requirements.

This Certificate entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity.

This CE Certificate of Conformity entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity.

Under current guidance, CE marked medical devices may be placed on the UK market up until the sooner of the expiry of the CE Certificate of Conformity or June 30, 2028.

After that date, we will need to obtain UKCA marking (the UK replacement for CE marking) from a UK approved body (the new equivalent of an EU notified body) for commercialization of our gammaCore products in the UK.

See “Item 1 – Business – Regulatory Clearances” for additional information.

As a general rule, demonstration of conformity of medical devices and their manufacturers with the Essential Requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use.

Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use and that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device, such as product labeling and instructions for use, are supported by suitable evidence.

Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use and that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device (e.g., such as product labeling and instructions for use) are supported by suitable evidence.

This assessment must be based on clinical data, which can be obtained from ( 1 ) clinical studies conducted on the devices being assessed, ( 2 ) scientific literature from similar devices whose equivalence with the assessed device can be demonstrated or ( 3 ) both clinical studies and scientific literature.

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The MDR became applicable on May 26, 2021, with the transition period intended to end on May 26, 2024.

While progress has been made on the transition from the MDD to the MDD, a European Commission proposal published on January 6, 2023, stated that the overall number and capacity of conformity assessment (a.k.a., ‘notified’) bodies remains insufficient to carry out the tasks required of them.

While progress has been made on the transition from the MDD to the MDR, a European Commission proposal published on January 6, 2023, stated that the overall number and capacity of conformity assessment or notified bodies remains insufficient to carry out the tasks required of them.

In addition, many manufacturers are not sufficiently prepared to meet the strengthened requirements of the MDR by the end of the transition period.

This is threatening the availability of medical devices on the EU market.

According to an estimation presented by notified bodies to the Medical Device Coordination Group on November 17, 2022, the number of certificates issued by May 2024 may reach around 7,000 if the current rate of certificate issuance remains the same with no changes to current conditions.

Notified bodies estimate that the transition of all Directives’ certificates to MDR certificates could possibly be completed by December 2027.

The European Commission’s “ Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2017/745 and (EU) 2017/746 as regards the transitional provisions for certain medical devices and in vitro diagnostic medical devices, Brussels, 1.6.2023 intends” to extend the transition period from May 26, 2024 until December 31, 2027 for high-risk Class III and Class IIb implantable devices, and until December 31, 2028 for medium and lower risk Class IIb and Class IIa devices.

The gammaCore products (gammaCore Sapphire and gammaCore-S) are EU Class IIa devices.

This was threatening the availability of medical devices on the EU market.

The European Commission extended the transition period from May 26, 2024 until December 31, 2028 for Class IIa devices, which includes t he gammaCore products (gammaCore Sapphire, gammaCore-S).

Once applicable, the new regulations will among other things:

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Our failure to continue to comply with applicable foreign regulatory requirements, including those administered by authorities of the EEA countries, could result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of Conformity by our notified body (the British Standards Institution), which could impair our ability to market products in the EEA in the future.

The United Kingdom’s withdrawal from the EU (or Brexit) could lead to significant business and legal uncertainty and potentially divergent national laws and regulations in the EU and the United Kingdom.

Given the lack of comparable historical precedent, it is unclear what Brexit’s financial, regulatory, and legal implications would be, and how Brexit would ultimately affect us.

However, potentially changing regulatory schemes and tariffs engendered by Brexit may add additional complexity, cost, and delays to the operations of electroCore UK Ltd.

and in marketing or selling our products in the United Kingdom.

On March 29, 2017, the United Kingdom formally notified the EU of its intention to withdraw from the Union pursuant to Article 50 of the Lisbon Treaty, commonly referred to as Brexit, and completed a transitional period on December 31, 2020.

Following Brexit, EU law and the EU Court of Justice no longer have supremacy over British laws or its Supreme Court.

The United Kingdom's European Union (Withdrawal) Act 2018 retains relevant EU law as domestic law, which can be amended or repealed.

For medical devices, the key changes are that:

- UK “notified bodies” have lost this status, and are no longer able to issue CE certificates.

Some, including BSI, have set up an EU entity as a new notified body to issue CE certificates.

- the UK is replacing the EU CE marking system with “UKCA” marking.

The transition period has been extended, and currently CE marked medical devices may be placed on the UK market up until the sooner of the expiry of the Certificate of Conformity or June 30, 2028.

After this date, manufacturers will need UKCA marking to place medical devices on the UK market.

Medical devices sold in the UK and EU will need both CE and UKCA marking.

The United Kingdom’s national laws and regulations for medical devices are currently based on retained EU legislation, but may diverge in future.

Potentially changing regulatory schemes and tariffs engendered by Brexit may add additional complexity, cost and delays to our UK operations, and in marketing or selling our products in both the United Kingdom and the EEA.

Our revenue and profit, supply and demand for our products, and customer retention and acquisition in both the long term and short term could be adversely affected.

Since a significant proportion of the regulatory framework in the United Kingdom was derived from EU directives and regulations, the withdrawal of the United Kingdom from the EU could materially impact the regulatory regime with respect to the CE Certificates of Conformity in the United Kingdom.

Importantly, CE Certificates of Conformity issued by a notified body accredited in the EU may no longer be recognized in the United Kingdom.

Similarly, notified bodies accredited in the United Kingdom will no longer be able to issue CE Certificates of Conformity.

Obtaining new CE Certificates of Conformity or certification for the UK may have a significant impact on our activities.

Lastly, Brexit may also disrupt the way that the United Kingdom interprets obligations under CE Certificates of Conformity.

If we fail to maintain regulatory approvals and clearances, or are unable to obtain, or experience significant delays in obtaining FDA clearances, approvals or CE Certificates of Conformity for our future products or product enhancements, our ability to commercially distribute, market, and sell these products could suffer, and, if our general wellness products no longer fall under the scope of applicable FDA guidance, such products may be subject to additional and more comprehensive regulation and/or greater regulatory uncertainty, affecting our ability to commercially distribute, market, and sell such products in the ordinary course of business.

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Therefore, some of our products, or product features in certain circumstances, may not be subject to the aforesaid Section 510(k) process and/or other regulatory requirements in accordance with specific FDA guidance and policies.

In addition, some of our products, or product features, may not be subject to statutory device prescription requirements pursuant to various provisions of the FDCA.

In addition, some of our products, or product features, may not be subject to statutory device prescription requirements pursuant to various provisions of the FD CA.

Section 3060(a) of the 21 st Century Cures Act amended Section 520 of the FDCA on December 13, 2016, removing certain software functions, including those intended for maintaining or encouraging a healthy lifestyle that are unrelated to the diagnosis, cure, mitigation, prevention, or treatment of a disease or condition, from the definition of device in Section 201(h) of the FDCA.

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Moreover, FDA may disagree with our assessment, potentially subjecting these products to regulation as medical devices.

We and our legal advisors strive to regularly keep abreast of all relevant developments in the statutory, administrative, and decisional laws, on federal and, where applicable, state levels, that which influence or inform our general wellness products-related development, marketing, promotion, distribution, and sale, among other activities.

We and our legal advisors strive to regularly keep abreast of all relevant developments in the statutory, administrative, and decisional laws, on federal and, where applicable, state levels, that influence or inform our general wellness products-related development, marketing, promotion, distribution, and sale, among other activities.

In light of the substantial complexity in such laws as well as their potential actual interactive Ness, or perceived overlap or conflict, with the application of the FDA’s existing regulatory approval or clearance processes for medical device products as a result of either official agency changes to applicable general wellness guidance, our subsequent legal review of such guidance that differs substantially from earlier legal review of such guidance, or the FDA’s disagreement with our determination regarding the regulatory status of our general wellness products, we may experience adverse and possibly material effects on our ability to commercialize our general wellness products, which could impact our financial condition, operating results, and prospects for growth.

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Responding to investigations can be time-consuming and costly and can divert management’s attention from the business.

Additionally, as a result of these investigations, healthcare providers and entities may have to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement, for example.

Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

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On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA.

Supreme Court dismissed a judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

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As described in Item 3 .

Legal Proceedings, we and certain of our present and past directors and officers have been named in putative securities class action lawsuits alleging violations of the Securities Act of 1933 ( “ Securities Act ” ) and the Securities Exchange Act of 1934 ( “ Exchange Act ” ).

We are generally required to indemnify our current and former directors and officers who are named as defendants in these types of lawsuits.

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The above factors could adversely affect the value of our common stock and cause you to lose all or part of your investment.

We have identified a material weakness in our internal control over financial reporting and determined that our disclosure controls were not effective.

If we are unable to remediate this material weakness, or if we experience additional material weaknesses in the future, we may not be able to accurately or timely report our financial condition or results of operations and investors may lose confidence in our financial reports and the market price of our common stock could be adversely affected.

We may identify a material weakness in our internal control over financial reporting and determine that our disclosure controls were not effective.

If we are unable to remediate such a material weakness, or if we experience additional material weaknesses in the future, we may not be able to accurately or timely report our financial condition or results of operations and investors may lose confidence in our financial reports and the market price of our common stock could be adversely affected.

As a public company, we are required to maintain effective disclosure controls and procedures and implement and maintain internal control over financial reporting and to report any material weaknesses in such internal control.

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The Sarbanes-Oxley Act also requires that our management report on internal control over financial reporting be attested to by our independent registered public accounting firm, to the extent we have annual revenues greater than $ 100 million in the most recent fiscal year for which audited financial statements are available.

We do not expect to have our independent registered public accounting firm attest to our management report on internal control over financial reporting for so long as we have annual revenues under $ 100 million and we are not an accelerated filer or large accelerated filer due to surpassing the SEC’s threshold of market capitalization greater than $250 million .

If and when we have to design and implement the internal control over financial reporting required to comply with this obligation, such process will be time consuming, costly, and complicated.

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Management also determined that our disclosure controls were ineffective as of September 30, 2023 due to the existence of this material weakness.

In preparing our audited financial statements for the fiscal year ended December 31, 2023, we determined that the material weakness still exists in the Company’s internal controls over financial reporting and our disclosure controls were ineffective.

Management is committed to the remediation of the material weakness.

Management is actively engaged in the implementation of remediation efforts, as described above, to address the material weakness.

To remediate this material weakness, we have undertaken efforts that include but are not limited to, (a) enhancing 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.

For more details of the corrective actions, please refer to Item 9A Controls and Procedures.

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

We can give no assurance that this implementation will remediate this material weakness in our internal control or that material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future.

If we are unable to remediate this material weakness, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations and investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources to identify, assess and correct any additional material weakness in disclosure or internal control and to otherwise comply with the internal and disclosure controls rules under Section 404 of the Sarbanes-Oxley Act, when applicable.

In 2024, management implemented measures designed to ensure that the control deficiencies that contributed to the material weakness were remediated, such that these controls are designed, implemented, and operating effectively.

Remediation efforts included 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.

As of September 30, 2024, management has completed its testing and evaluation of the implementation of internal controls and revised processes and has concluded that the material weakness has been remediated and will provide reasonable assurance that they will prevent or detect a material error in our financial statements.

If we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations and investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources to identify, assess and correct any additional material weakness in disclosure or internal control and to otherwise comply with the internal and disclosure controls rules under Section 404 of the Sarbanes-Oxley Act, when applicable.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.

Our certificate of incorporation and bylaws provisions that could significantly reduce the value of our shares to a potential acquirer or delay or prevent changes in control or changes in our management without the consent of our board of directors.

Our certificate of incorporation and bylaws , as amended and restated (the “bylaws”), contain provisions that could significantly reduce the value of our shares to a potential acquirer or delay or prevent changes in control or changes in our management without the consent of our board of directors.

The provisions in our charter documents include the following:

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Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence control over matters subject to stockholder approval.

As of December 31, 2023 our executive officers, directors, and holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 24.4% of our outstanding common stock.

As of December 31, 2024 our executive officers, directors, and holders of 5 or more of our capital stock and their respective affiliates owned approximately 24.6% of our outstanding common stock.

As a result, these stockholders will continue to have a significant influence over all matters requiring stockholder approval.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors