What changed in this filing

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Item 9A. Controls and Procedures

2025-03-12 compared with 2024-03-13 · 838 added, 436 removed, 1159 unchanged (52% of the section changed)

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As required by Rule 13 a- 15 (b) of the Exchange Act, an evaluation as of December 31, 2024 , was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13 a- 15 (e) under the Exchange Act).

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

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2024 , were effective.

Management’s Report on Internal Control Over Financial Reporting

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As of December 31, 2024 , our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework ( 2013 ).

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

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

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

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

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

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

Remediation Plan for the Material Weakness

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

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

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

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

Based on this evaluation, our management concluded that, as of December 31, 2024 our internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

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

There was no change in our internal control over financial reporting as such term is defined in Rules 13 a- 15 (f) and 15 d- 15 (f) under the Exchange Act, that occurred during the three months ended December 31, 2024 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

Other Information

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

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

Director and Officer Trading Plans and Arrangements

During the three months ended December 31, 2024, n o n e of our directors or officers adopted , made certain modifications or terminated a “ Rule 10b5-1 trading arrangement ” or “ non-Rule 10b5-1 trading arrangement ,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Directors, Executive Officers and Corporate Governance

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

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

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

Class III Directors (Terms Expiring in 2024)

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

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

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

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

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

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

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

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

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

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

Cuneo holds an M.B.A.

from Harvard Business School, a B.S.

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

The Board believes that Mr.

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

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

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

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

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

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

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

Gandolfo holds a B.A.

in business administration from Rutgers University.

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

Charles Theofilos , M.D.

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

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

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

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

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

Theofilos received an M.D.

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

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

The Board believes Dr.

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

Our Board is divided into three classes, and currently

has seven members, who are generally elected for a three-year term.

classification results in staggered elections, with a different class of

directors standing for election every year.

Vacancies on the Board may be filled

only by person(s) elected by a majority of the remaining directors.

elected by the Board to fill a vacancy in a class, including a vacancy created

by an increase in the number of directors, will have serve the remainder of the

term of that class until the director’s successor is duly elected and

Set forth below is the name, age as of March

12, 2025, and certain biographical information with respect to each of

our current directors, by class.

Peter Cuneo resigned as a Class III director

with a term expiring at the 2024 Annual Meeting of Stockholders, and was immediately reappointed to the Board as a Class I director

with a term expiring at the 2025 Annual Meeting of Stockholders.

The resignation and reappointment of Mr.

Cuneo was not due to any

disagreement with the Company, the Board or the management of the Company.

For all other purposes, including equity award vesting

and other compensation matters, Mr.

Cuneo’s service on the Board is deemed to have continued uninterrupted.

Cuneo is expected

to continue to serve as the Chairman of the Board until the 2025 Annual Meeting, at which he will not stand for reelection.

Class I Directors (Terms Expiring in 2025)

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Patricia Wilber

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

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

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

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

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

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

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

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

Patricia Wilber, 63, has served as a member of the Board since

Wilber has been a chief marketing officer, global business

strategist, and board member who delivers organizational and cultural

transformation for branding.

She is a pioneer in new franchise models and

branded partnerships.

Wilber last served as the executive vice president,

chief marketing officer, and managing director of partnerships, EMEA, the

highest position in the marketing department at The Walt Disney Company from 2015

to 2018, where she drove growth for Disney’s marquee brands by leading

marketing and communications for Disney, Pixar, Star Wars, and Marvel.

Additionally, she established and led EMEA’s 40-country integrated marketing,

franchise and partnership functions, including a major reorganization of the

EMEA channels to boost growth and profitability by significantly reducing

She also currently serves on the board of Zapp Electric Vehicles Group

Limited and Yale New Haven Hospital, a medical nonprofit organization.

served on the boards of Euro Disney SCA from 2015 to 2018, Magical Cruise

Company, more commonly known as the Disney Cruise Line, from 2013 to 2018, and

Vibrant Emotional Health from 2022 to 2023.

Wilber holds a B.A.

in history from Brown University.

from Brown University.

The Board believes Ms.

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

Wilber’s strategic marketing

expertise and public company board experience qualify her to serve on the

Class II Directors (Terms Expiring in 2026)

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

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

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

He also is an associate Professor of Orthopedic Surgery at the University of Miami School of Medicine.

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

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

In addition, Dr.

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

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

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

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

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

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

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

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

Patton, 61, has served as a member of the Board since

He is a seasoned healthcare executive and board member with

operational, strategic, financial, legal, compliance and transactional

experience, from start-ups to growth companies, both public and private.

currently is an advisor to the private equity firm SV Health Investors, is the

executive chairman of the board of directors of Spineology, Inc., a privately held,

therapeutic devices corporation, and serves on the board of the Connecticut

Port Authority and is co-chair of its audit committee.

He also serves on the

private company boards' of directors of each of Packing Compliance Labs,

Robling Medical, LLC and Miach Orthopedics, Inc.

He was the chief

executive officer and member of the board of directors of Ximedica, LLC, a

private medical products outsource design and development company from August

2020 to May 2021.

From 2015 to 2021, he also served on the board of Misonix,

Inc., a publicly traded ultrasonic surgical tools and wound care company, and

chaired that company’s audit committee, from October 2015 to November 2021 and

served as president and chief executive officer of CAS Medical Systems, a

publicly traded developer and distributor of patient monitoring equipment, from

His prior experience includes roles as co-founder, president and

chief executive officer of QDx, Inc., a developer of unique micro-fluidic

diagnostic technology utilizing digital imaging techniques for hematologic analysis,

as president and chief operating officer of Novametrix Medical Systems, Inc.,

and as chief executive officer of Wright Medical Technology, Inc.

has served on more than a dozen boards of directors for both public and private

medical products and services companies.

Patton holds a B.A.

in economics from Holy Cross University and J.D.

from Holy Cross University and J.D.

from Georgetown University Law Center.

Board believes that Mr.

Patton’s business and financial experience, as well as

his medical device industry expertise and ability to serve as an “audit

committee financial expert,” qualify him to serve on the Board.

Class III Directors (Terms Expiring in 2027)

Peter Cuneo, 80, has served as a member of the Board since April 2020 and been the Chairman of the Board since October 2021.

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

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

experience includes serving as chief executive officer of Marvel Entertainment Inc.

and as vice chairmen until its sale to The Walt

Disney Company in 2009 and served on the board of Iconix Brand Group from 2007 through 2021.

Earlier in his career, he

successfully led three turnarounds, first as president of Clairol’s Personal Care Division, as president of Black and Decker’s Security

Hardware Group, and as chief executive officer of Remington Products.

Previously, he also served as president of Bristol-Meyers

Squibb Co.’s pharmaceutical group in Canada.

Cuneo’s board experience includes serving as chairman of Valiant Entertainment

from 2012 to 2018 following Cuneo & Company LLC’s investment in the company.

He currently serves as chairman emeritus of the

Alfred University Board of Trustees and served on the board of the National Archives Foundation in Washington, D.C.

Cuneo holds an M.B.A.

from Harvard Business School, a B.S.

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

The Board believes that Mr.

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

Cuneo’s extensive business and financial

background, including his significant consumer-focused expertise, qualify him to serve on the Board.

Gandolfo, 64, has served as a member of the Board since April 2020.

He brings to the Board more than 30 years of financial

leadership at both public and private companies across multiple industry sectors, including in expense control and cash flow

optimization having retired in 2024 as chief financial officer of Eyenovia, Inc., a publicly held, late clinical stage biopharmaceutical

company focusing on the development of ophthalmic drugs.

Prior to Eyenovia, he served as chief financial officer of Xtant Medical

Holdings, Inc., a publicly held orthopedic and spine medical device company with multiple operations throughout the United States

from 2010 to 2017.

He has served on the board of Oragenics, Inc, a development-stage company dedicated to fighting infectious

diseases including coronaviruses and multidrug-resistant organisms, since September 2023.

His prior healthcare-related experience

includes roles as chief financial officer of Progenitor Cell Therapy LLC, Power Medical Interventions and Bioject, Inc., among others.

Gandolfo’s experience also includes serving on the audit committees of the boards of multiple medical technology companies

including Odyssey Health, Inc., a medical device company which he has served as a director since 2019.

Gandolfo holds a B.A.

business administration from Rutgers University.

The Board believes that these experiences, and his ability to serve as a financial

expert on our audit committee, qualify him to serve on the Board.

Demographic Background

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

Board Diversity

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

Board Diversity Matrix

Total Number of Directors

Gender Undisclosed

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

African American or Black

Alaskan Native or American Indian

Hispanic or Latinx

Native Hawaiian or Pacific Islander

Two or more races or ethnicities

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

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

Goldstein and Ms.

Wilber in March 2022.

Executive Officers

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

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

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

Prior to Cellectar, Mr.

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

Before such time, Mr.

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

Before his employment with Pharmacopeia, Mr.

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

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

Posner earned an M.B.A.

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

in accounting from Queens College.

Lev, 40, has served as our Chief Financial Officer since October 2024.

Lev, has served as the Chief Strategy Officer of the Company since January 2022, previously having served as Vice President of Business Development, Strategy and Financial Planning since February 2020.

Prior to joining the Company, Mr.

Lev had over 15 years of experience in the financial services industry as an investment banker and investor focusing on emerging growth companies.

From 2011 to February 2020, Mr.

Lev served as Director of Business Development at Wellfleet Partners, Inc.

focusing on capital raising, M&A, strategic transactions and institutional client relations.

From March 2014 through February 2020, he was also a co-founder of Aracle Capital, LLC, an investment firm with a focus on early-stage and emerging-growth companies.

Lev received an M.B.A.

from the University of North Carolina’s Kenan-Flagler Business School and a B.S.

in Business & Management from the Sy Syms School of Business at Yeshiva University.

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

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

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

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

Meetings of the Board Of Directors

The Board met 11 times during 2023.

The Board met seven times during 2024.

Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the committee(s) on which he or she served that were held during the portion of 2024 for which he or she was a director or committee member.

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Nominating and Governance Committee

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

Goldstein, Dr.

Theofilos and Ms.

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

Goldstein, and Ms.

Errico is the chairman of the nominating and governance committee.

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

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

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

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

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

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

The nominating and governance committee also takes these minimum qualifications into account in identifying and evaluating director nominees, including nominees validly recommended by stockholders in accordance with applicable law and the provisions of our bylaws.

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

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Wilber in March 2022.

Compensation Committee

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

Our compensation committee

currently consists of three directors, Dr.

Gandolfo and Ms.

Goldstein, each of whom is a non-employee

member of the Board as defined in Rule 16b-3 under the Exchange Act.

Gandolfo is the chairman of the compensation committee.

The Board is of the opinion that the composition and functioning of our compensation committee satisfies the applicable independence

and other applicable requirements of Nasdaq and SEC rules and regulations.

We intend to continue to evaluate and comply with the

requirements applicable to our compensation committee.

The principal duties and responsibilities of our compensation committee

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

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

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

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

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

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

reviewing compensation plans, programs and policies;

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

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

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

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

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

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

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

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

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

During the year ended December 31, 2024 and 2023 , the compensation committee in its discretion did not engage a compensation consultant.

Audit Committee

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

Compensation Committee

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

Our compensation committee currently consists of four directors, Dr.

Gandolfo, Ms.

Goldstein and Dr.

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

Gandolfo is the chairman of the compensation committee.

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

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

The principal duties and responsibilities of our compensation committee include:

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

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

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

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

reviewing compensation plans, programs and policies;

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

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

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

Information Regarding Committees of the Board of Directors

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Audit Committee

Committee (1)

Nominating and Governance Committee

Peter Cuneo (2)

Julie Goldstein

Theofilos, M.D.

Patricia Wilber

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*Committee Chair

(1) Charles S.

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

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

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

Theofilos resigned from the Board on February 24, 2025.

Director Nominating Procedures

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

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

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

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

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

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

We do not impose formal term limits on its directors.

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

We do not impose any term limits on our directors.

as of November 13, 2024, the Board approved and adopted our second amended and

restated bylaws, which amend certain of

the provisions of Article III, Sections 5(B)(1), (B)(4), (B)(5), (F), and (G).

Among other things, the amendments (i) address provisions

of the universal proxy rules adopted by the SEC, by clarifying that to comply

with such rules, stockholders who intend to solicit

proxies in support of a director nominee other than the Board’s nominees must

provide a notice to us that sets forth the information

required by Rule 14a-19 under the Exchange Act, including with respect to

applicable notice and solicitation requirements,

and that we shall disregard any proxies or votes solicited for such

stockholder’s nominee(s) by any such stockholder who

fails to comply with Rule 14a-19;

(ii) specify the process and disclosure

requirements for a stockholder submitting notice of a director

nomination with respect to, among other things, (x) the dates of first contact

between the proposed director and the stockholder

(y) known financial supporters of the proposed director;

form of questionnaire and form of nominee's representation

and agreement that must be delivered to us and requiring that such items,

completed by the nominee, be delivered to us along

with such notice of a director nomination;

and (iii) require that a stockholder

directly or indirectly soliciting proxies from other stockholders

use a proxy card color other than white.

foregoing summary is qualified in its entirety by reference to the text of the

second amended and restated bylaws filed as Exhibit 3.1

to our Quarterly Report on Form 10-Q for the period ended September 30, 2024,

as filed with the SEC on November 13, 2024.

Section 16(A) Beneficial Ownership Reporting Compliance

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

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

To our knowledge, based solely on a review of the copies of such reports furnished to it and written representations that no other reports were required, during the fiscal year ended December 31, 2024 , all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with.

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

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Chief Executive Officer

Former Chief Strategy Officer Current Chief Financial Officer

Chief Financial Officer

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

On August 9, 2024, Mr.

Lev voluntarily relinquished the Option Awards granted to him on February 3, 2020.

On August 14, 2024, Mr.

Posner voluntarily relinquished the Option Awards granted to him on March 11, 2019, June 12, 2020, and January 18, 2021.

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

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overall company performance;

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

compensation for comparable positions in the market (as defined by a combination of identified industry comparables and industry/size-specific survey data).

The compensation committee oversees the executive compensation program for our NEOs.

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

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For 2024, Mr.

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

Lev received a base salary of $408,165.

Effective as of October 4, 2024, Mr.

Lev receives a base salary of $415,000 per annum.

For 2023, Mr.

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

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

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On January 18, 2025, Mr.

Goldberger received an incentive award of 40,000 restricted stock units.

One-third of the underlying shares

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

Goldberger’s continued

employment with us through the applicable vesting dates, and which restricted stock units are also subject to potential acceleration of

vesting upon a double-trigger change in control as defined in our Executive Severance Policy

On January 18, 2021, Mr.

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

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

On August 14, 2024, Mr.

Posner voluntarily relinquished the Option Awards granted to him on March 11, 2019, June 12, 2020, and January 18, 2021.

On January 16, 2024, Mr.

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

On January 12, 2024, Mr.

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

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

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

On August 9, 2024, Mr.

Lev voluntarily relinquished the Option Awards granted to him on February 3, 2020.

On January 15, 2025, Mr.

Lev received an incentive award of 10,000 restricted stock units.

One-third of the underlying shares of

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

Lev’s continued

employment with us through the applicable vesting dates, and which restricted stock units are also subject to potential acceleration of

vesting upon a double-trigger change in control as defined in our Executive Severance Policy.

Other Compensation and Benefits

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In January 2025, on the recommendation of the compensation committee, Mr.

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

Goldberger’s target discretionary bonus opportunity for 2024 was adjusted to be up to 70% target of his base salary with an additional 5% increase to be based upon the corporation achieving cash flow breakeven in the second half of 2025.

Pursuant to the Goldberger Agreement, Mr.

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

On October 4, 2024, Mr.

Posner entered into an agreement with the Company pursuant to which Mr.

Posner will provide financial and

accounting consulting services to the Company on an hourly basis for 12 months after the effective date of his retirement, subject to

potential extension upon mutual agreement.

Pursuant to his amended employment offer letter (the “Lev Agreement”), effective October 4, 2024, Mr.

Lev will be paid an annual

base salary of $ $415,000.

In addition, Mr.

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

Pursuant to the Lev Agreement, Mr.

Lev is also eligible to receive healthcare benefits as may be provided from time to

time by us to our employees generally, to participate in our 401(k) plan and to receive paid time off annually in accordance with our

policies in effect from time to time

Outstanding Equity Awards at the End of 2024

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

Goldberger (1)

1 On April 17, 2023, Mr.

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

(1) Value in this column is based on the closing price of our common stock on Nasdaq on the last business day of fiscal 2024 ($16.21).

Posner resigned as Chief Financial Officer of the Company, effective October 4, 2024.

Effective October 4, 2024, Mr.

Lev replaced Mr.

Posner as the Company's Chief Financial Officer.

Compensation Policy

we do not have a formal written policy in place with regard to the timing of

certain equity awards in relation to the disclosure of material nonpublic

information, our Board and the Compensation Committee do not seek to time

equity grants to take advantage of information, either positive or negative,

about our company that has not been publicly disclosed.

It has been our

practice generally to grant initial equity awards to our officers and

non-employee directors in connection with their hiring or appointment to the

Board, as applicable.

We generally intend to issue equity awards to our

officers at approximately the same time each year, typically in close proximity

to the first regularly scheduled meeting of our Compensation Committee each

In addition, non-employee directors receive automatic grants of

initial and annual equity awards, at the time of a director’s initial appointment or election to the Board and at the time of each annual meeting of

our stockholders, respectively, pursuant to our Non-Employee Director Compensation

Policy, as further described under “Item 11.

Executive Compensation – Director

Compensation.” Option grants generally are effective on the date the award

determination is made by the Compensation Committee or the Board, as the case

may be, and the exercise price of options is typically based upon the Fair

Market Value of our common stock as defined in our 2018 Omnibus Equity

Incentive Plan (the “2018 Plan”).

additional information, see our Non-Employee Director Compensation Policy,

which is included as an exhibit to our Registration Statement on Form S-1,

filed with the SEC on August 23, 2023.

See also “Item 11.

Executive Compensation – Employment Agreements - Brian M.

Indemnification Agreements

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Audit-Related Fees

All Other Fees

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

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

Amended and Restated Bylaws of electroCore, Inc .

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

Second Amended and Restated Bylaws of electroCore,

incorporated by reference to the Company’s Quarterly Report on Form 10-Q,

as filed with Commission on November 13, 2024.

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

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

Form of Pre-Funded Warrant (Private), incorporated by

reference to the Company’s Current Report on Form 8-K, as filed with the

Commission on June 3, 2024.

Form of Pre-Funded Warrant (Registered Direct),

incorporated by reference to the Company’s Current Report on Form 8-K, as filed

with the Commission on June 3, 2024.

Form of Common Warrant, incorporated by reference to

the Company’s Current Report on Form 8-K, as filed with the Commission on June

electroCore, Inc.

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

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

Form of Indemnification Agreement

between the Registrant and each of its executive officers and directors,

incorporated by reference to the Company’s Registration Statement on

Form S-1, Registration No.

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

Form of electroCore, Inc.

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

electroCore, Inc.

Executive Severance Policy, incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2024, as filed with the Commission on May 8, 2024.

electroCore, Inc.

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

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

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

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

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

and Daniel Goldberger, incorporated by reference to the Company's Current Report on Form 8-K, as filed with the Commission on October 2, 2019 .

Brian Posner Employment Agreement, dated as of January 30, 2019, incorporated by reference to the Company's Current Report on Form 8-K, as filed with the Commission on March 12, 2019 .

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

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

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

Form of Series A Warrant, incorporated by reference to the

Company's Registration Statement on Form S-1, Registration No.

333-225084, as

filed with the Commission on May 21, 2018.

Employment Offer Letter, dated as of

September 26, 2019, between electroCore, Inc.

Daniel Goldberger, incorporated by reference to the Company's Current

Report on Form 8-K, as filed with the Commission on October 2, 2019 .

Brian Posner Employment Agreement, dated as

of January 30, 2019, incorporated by reference to the Company's Current Report

on Form 8-K, as filed with the Commission on March 12, 2019 .

Amendment to Brian Posner Employment

Agreement, dated as of August 8, 2019, incorporated by reference to the

Company's Quarterly Report on Form 10-Q, as filed with the Commission on August

Securities Purchase Agreement, dated as

of July 31, 2023 (Registered Direct), incorporated by reference to the

Company's Current Report on Form 8-K, as filed with the Commission on July 31,

Securities Purchase Agreement, dated as

of July 31, 2023 (Private), incorporated by reference to the Company's Current

Report on Form 8-K, as filed with the Commission on July 31, 2023.

Consulting Agreement by and between electroCore, Inc

Posner, dated October 4, 2024, incorporated by reference to the

Company's Quarterly Report on Form 10-Q, as filed with the Commission on

November 13, 2024.

Offer Letter by and between the Company and Joshua

Lev, dated as of January 29, 2020, incorporated by reference to the Company's

Current Report on Form 8-K, as filed with the Commission on September 6, 2024.

to the Offer Letter by and between the Company and Joshua Lev, dated as of

September 3, 2024, incorporated by reference to the Company's Current Report on

Form 8-K, as filed with the Commission on September 6, 2024.

Form of Securities Purchase Agreement, dated as of

June 3, 2024 (Registered Direct), incorporated by reference to the Company's

Current Report on Form 8-K, as filed with the Commission on June 3, 2024 .

of Securities Purchase Agreement, dated as of May 31, 2024 (Private),

incorporated by reference to the Company's Current Report on Form 8-K, as filed

with the Commission on June 3, 2024.

The Market Offering Agreement, dated as of November 29, 2024, between H.C.

Wainwright & Co., LLC and electroCore, Inc., incorporated by reference to

the Company's Current Report on Form 8-K, as filed with the Commission on

November 29, 2024.

and Plan of Merger dated December 17, 2024, by and among electroCore, Inc.,

Nexus Merger Sub Inc.

and NeuroMetrix, Inc., incorporated by reference to the

Company's Current Report on Form 8-K, as filed with the Commission on December

and Support Agreement, dated December 17, 2024, by and among electroCore, Inc.,

and the stockholders of NeuroMetrix, Inc.

named therein, incorporated by

reference to the Company's Current Report on Form 8-K, as filed with the

Commission on December 17, 2024.

Agreement by and between electroCore, Inc.

Peter Cuneo, dated July 11,

2024, incorporated by reference to the Company’s Current Report on Form 8-K,

filed with the Commission on July 17, 2024.

electroCore, Inc.

Insider Trading Policy.

List of subsidiaries of electroCore, Inc.

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

Clawback Policy

Clawback Policy, incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Commission on March 13, 2024.

Inline XBRL Instance Document

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Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith.

certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual

Report are not deemed filed with the SEC and are not to be

incorporated by reference into any filing of electroCore, Inc.

Securities Act of 1933 or the Securities

Exchange Act of 1934, whether made before or after the date of this Annual

Report, irrespective of any general incorporation language contained in such filing.

Indicates management agreement

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March 12, 2025

/s/ JOSHUA S.

Chief Financial Officer

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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

/s/ Peter Cuneo

Chairman of the Board

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Errico , M.D.

/s/ John Gandolfo

March 12, 2025

John Gandolfo

March 12, 2025

/s/ Thomas Patton

/s/ Thomas M.

March 12, 2025

Thomas Patton

/s/ Charles S.

Theofilos, M.D.

March 13, 2024

Theofilos , M.D.

/s/ Patricia Wilber

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

(the “Company”)

and Subsidiaries (the “Company”)

as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for

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generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that

the Company will continue as a going concern.

As more fully described in Note

3, the Company has experienced significant

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

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

continue as a going concern.

Management's plans in regard to these matters are

also described in Note 3.

The consolidated

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

outcome of this uncertainty.

Basis for Opinion

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Restricted cash

Marketable securities

Accounts receivable, net

Inventories, net

Prepaid expenses and other current assets

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10,000,000 shares authorized as of December 31, 2024 and December 31, 2023 ;

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

0 shares issued and outstanding at December 31, 2024 and December 31, 2023

Stockholders' equity:

Common Stock, par value $ 0.001 per share;

500,000,000 shares authorized as of both December 31, 2023 and 2022 ;

500,000,000 shares authorized as of December 31, 2024 and 2023 ;

6,650,854 shares issued and outstanding at December 31, 2024 , and 6,002,628 shares issued and outstanding at December 31, 2023

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Benefit from income taxes

Preferred stock dividend

Net loss available for common shareholders

Net loss per share of common stock - Basic and Diluted (see Note 9 )

Net loss per share of common stock - Basic and Diluted

Weighted average common shares outstanding - Basic and Diluted (see Note 11 )

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Other comprehensive income (loss)

Preferred dividend

Comprehensive loss available to common shareholders

See accompanying notes to consolidated financial statements.

ELECTROCORE, INC.

AND SUBSIDIARIES

ELE CTROCORE, INC.

AND SUBSIDI ARIES

Consolidated Statements of Equity

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Balances as of January 1, 2023

Other comprehensive loss

Other comprehensive income

Sale of common stock and warrants

Financing fees

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

Dividend preferred

Preferred stock redemption

Share based compensation

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Financing fees

Proceeds from the exercise of warrants

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

Preferred stock redemption

Share based compensation

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Depreciation and amortization

Decrease in allowance for credit losses

Amortization of right of use assets

Inventory reserve charge

In ventory reserve charg e

Increase (decrease) in provision for credit losses

Changes in operating assets and liabilities:

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Purchase of property and equipment

P urchase of marketable securities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from shares issue

Financing costs

Sale of common stock and warrants

Financing fees

Proceeds from exercise of warrants

Net cash provided by financing activities

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Insurance premium financing

Accounts payable settled through common stock and warrants

Accounts payable settled through the exercise of warrants

Right-of-use asset and operating lease liability

See accompanying notes to consolidated financial statements.

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electroCore, Inc.

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

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

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

and its subsidiaries

(“electroCore” or the “Company”) is a bioelectronic medicine

and wellness company dedicated to improving health through its non-invasive

vagus nerve stimulation (“nVNS”) technology platform and related product offerings.

The Company’s focus is

the commercialization of medical devices for the management and treatment of

certain medical conditions and consumer product offerings utilizing nVNS to

promote general wellness and human performance in the United States and select

overseas markets.

electroCore, headquartered in Rockaway,

NJ, has two wholly owned subsidiaries:

electroCore UK Ltd and electroCore Germany GmbH.

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

The Company has paused

operations in Germany, with sales into the country and the rest of Europe being

managed by electroCore UK Ltd.

Summary of Significant Accounting Policies

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Actual results could differ from t hose estimates.

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

Significant items subject to such estimates and assumptions include revenue, licensed products and loss contingencies.

ELECTROCORE, INC.

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Total cash, cash equivalents and restricted cash

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

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

As of December 31, 2024 , cash equivalents represented funds held in an interest-bearing

demand deposit account, U.S.

treasury bills, and a money market account.

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

ELECTROCORE, INC.

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

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

As of December 31, 2024 , the Company's cash equivalent securities were largely comprised of treasury funds.

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

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

(g) Accounts Receivable

(g) Marketable Securities

Marketable securities are

carried at fair value, with unrealized gains and losses reported as accumulated

other comprehensive income, except for losses from impairments which are determined

to be other than temporary.

Realized gains and losses and declines in value

judged to be other-than-temporary are included in the determination of net loss

and are included in interest and other income net.

Fair values are based on

quoted market prices at the reporting date.

Interest and dividends on

available-for-sale securities are included in Interest and other income.

As of December 31, 2024 , marketable securities

amounted to $ 8.5 million and consist of

treasury bills.

Unrealized gains or losses during 2024 were not material.

The Company held no

marketable securities at December 31, 2023 .

(h) Accounts Receivable

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

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

(h) Inventories

(i) Inventories

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

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

(i) Property and Equipment

(j) Property and Equipment

Property and equipment are stated at historical cost.

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

(k) Cloud Computing Arrangement

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

The Company has capitalized implementation costs incurred in implementing its cloud computing arrangements, which is a hosting arrangement that is a service contract per FASB Accounting Standards Update (“ASU”) 2018 - 15 .

These costs include p ayroll costs of employees devoting time to the project and external direct costs for materials and services are capitalized.

Software maintenance and training costs are expensed in the period in which they are incurred.

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

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

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

(l) Licensed Products

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

(s) Recently Adopted Accounting Standards

Medical Devices.

(s) Recently Accounting Standards Pronouncements

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

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

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

The Company's adoption of this standard did not have a material impact on its results of operations, financial position or cash flows.

Segment Reporting.

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

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

Going Concern, Significant Risks and Uncertainties

Going Concern

The Company has experienced significant net losses and cash used in operations, and it expects to continue to incur net losses and cash used in operations for the near future as it works to increase market acceptance of its medical devices and wellness products.

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

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

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

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

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

2024, while the U.S.

Department of Veteran Affairs VA Federal Supply Schedule

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

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

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

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

On November 2024, the FASB issued Accounting Standards Update (ASU) No.

2024-03, Income

Statement (Topic 220):

Reporting Comprehensive Income - Expense Disaggregation

Disclosures, Disaggregation of Income Statement Expenses , which requires

public companies to disclose, in interim and annual reporting periods,

additional information about certain expenses in the financial statements.

amendments in this pronouncement will be effective for annual periods beginning

after December 15, 2026, and interim reporting periods beginning after December

Early adoption is permitted and is effective on either a prospective

basis or retrospective basis.

The Company is currently assessing the potential

impacts of adoption on its consolidated financial statements and related

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Liquidity and Certain Risks

T he Company has experienced significant net losses, and it expects to continue to incur net losses for the near future as it works to increase market acceptance of its gammaCore therapy and general wellness and human performance products.

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

The Company incurred net losses of $ 11.9 million and $ 18.8 million and used cash in its operations of $ 6.9 million and $ 14.7 million for the years ended December 31, 2024 and 2023 , respectively.

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

During the years ended December 31, 2024 , the Company received net proceeds of approximately $ 9.0 million from such sales and as of December 31, 2024 , the Company’s cash, cash equivalents and marketable securities totaled $ 12.2 million (“Cash Position”).

Based on its current assessment, the Company believes its Cash Position will enable it to fund its operating expenses and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the accompanying financial statements are issued.

There remain significant risks and uncertainties regarding the Company's business, financial condition and results of operations.

The Company’s future capital requirements are difficult to forecast and will depend on many factors that are out of its control.

If the Company is unable to achieve its planned operating results or maintain sufficient financial resources, including through potential positive cash flow from operations or supplemental access to third-party debt, equity or hybrid capital, its business, financial condition and results of operations may be materially and adversely affected.

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

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

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

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

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

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

Concentration of Revenue Risks

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

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

Years ended December 31,

Revenue channel:

National Health Service

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

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

Foreign Currenc y Exchang e Risks

The Company has foreign currency exchange risk related to revenue and operating expenses in currencies other than the local currencies in which it operates.

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

Revenue Recognition

Product Net Sales

(in thousands)

The Company earns a significant amount of its revenue in the United States from the VA channel pursuant to its qualifying contract under the Federal Supply Schedule, or FSS, and open market sales to individual VA facilities.

For the years ended December 31, 2024 and 2023 , the VA accounted for 70.6 % and 60.1 % of net sales, respectively.

For the year ended December 31, 2024 , Lovell and North Las Vegas VAMC each accounted for more than 10 % of our VA net sales .

During the year ended December 31, 2024 , sales associated with one facility accounted for more than 10 % of the total VA net sales and two facilities each accounted for more than 10 % of the total VA net sales in the year ended December 31, 2023 .

Sales through our TAC-STIM revenue channel accounted for 10.9 % of our net sales in the year ended December 31, 2023 .

Foreign Currency Exchange

The Company has foreign currency exchange risks related to revenue and operating expenses in currencies other than the local currencies in which it operates.

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

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

The following tables represent product net sales disaggregated by Channel and Geographic Market (in thousands):

Years ended December 31,

Rx gammaCore - Department of Veteran Affairs and Department of Defense

Rx gammaCore - VA

Rx gammaCore - U.S.

Outside the United States

Geographical Net Sales

Total Net Sales

Geographical Market :

Years ended December 31,

8 unchanged sentences

Accordingly, contracts with customers do not include a significant financing component.

Cash, Cash Equivalents, Restricted Cash and Marketable Securities

The following tables summarize the Company’s cash, cash equivalents and marketable securities as of December 31, 2024 and December 31, 2023 .

As of December 31, 2024

Amortized Cost

Unrealized Gain

Unrealized (Loss)

Cash, cash equivalents and restricted cash

Marketable Securities:

Treasury Bills

Total marketable securities

Total cash, cash equivalents, restricted cash and marketable securities

As of December 31, 2023

Amortized Cost

Unrealized Gain

Unrealized (Loss)

Cash, cash equivalents and restricted cash

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Fair Value Measurements

Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy:

Level 1 —Quoted prices in active markets for identical assets or liabilities.

Level 2 —Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

A summary of the assets and liabilities carried at fair value in accordance with the hierarchy d efined above is as follows:

Fair Value Hierarchy

December 31, 2024

Cash, cash equivalents and restricted cash

Marketable Securities:

treasury bills

Total cash, cash equivalents, restricted cash and marketable securities

Fair Value Hierarchy

December 31, 2023

Total cash, cash equivalents and restricted cash

As of December 31, 2024 , the Company's Marketable securities in the amount of $ 8.5 million were carried at fair value in accordance with Level 1 as described above.

The Company had no financial assets or liabilities as of December 31, 2023 that required valuation in accordance with the levels described above.

The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period.

There were no transfers within the hierarchy during the December 31, 2024 and year ended December 31, 2023 .

The carrying amount of the Company’s receivables and payables approximate their fair value due to their maturity.

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

As of December 31, 2024 and 2023 , inventories consisted of the following:

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Total current inventory

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

The reserve for obsolete inventory was $ 0.6 million and $ 0.7 million as of December 31, 2024 and 2023 , respectively.

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

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

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

The amounts recorded to cost of goods sold totaled a credit of $ 0.1 million and a charge of $ 0.7 million for the years ended December 31, 2024 and 2023, respectively.

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

Inventory classified under the category “Work in process” consists of prefabricated assembled product.

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

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

For the years ended December 31, 2024 and 2023 , the Company recognized lease expense of $ 535,000 and $ 153,000 respectively.

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

On February 6, 2024, the Company entered into The First Amendment to Lease Agreement (the “Rockaway Amendment”) to extend its Rockaway, New Jersey lease for an additional 10 years .

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

The increase in the term of the lease for the existing leased property was accounted for as a lease modification, therefore, the associated operating lease right of use assets and operating lease liabilities for the existing space were remeasured as of February 6, 2024.

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

The Company has accounted for the expansion space as an increase in lease right of use assets effective with the Rockaway Amendment commencement date of June 1, 2024 .

Supplemental Balance Sheet Information for Operating Leases:

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Amounts representing interest

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

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

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

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

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

ELECTROCORE, INC.

6 unchanged sentences

Accrued bonuses and incentive compensation

Accrued legal fees

Accrued litigation legal fees expense

Accrued insurance expense

5 unchanged sentences

On July 2, 2024, the Company entered into a Commercial Insurance Premium Finance and Security Agreement (the " 2024 Agreement").

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

The 2024 Agreement provides for a single borrowing of approximately $ 493,000 with a ten -month term and an annual interest rate of 8.75 %.

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

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

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

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

Beginning July 2024, the Company began paying monthly installments of approximately $ 51,000 .

As of December 31, 2024, the remaining balance under the Agreement was approximately $ 205,000 .

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

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

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

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

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

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

On July 5, 2023, the Company entered into a Commercial Insurance

Premium Finance and Security Agreement (the "2023 Agreement").

The 2023 Agreement provides for a single borrowing by the Company of

approximately $ 618,000 with a ten-month term and an annual interest

rate of 6.03 %.

The proceeds from this transaction were used to partially

fund the premiums due under certain of the Company's insurance policies.

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

Company began paying monthly installments of approximately

$ 61,800 in July 2023.

As of December 31, 2024 and 2023, the remaining

balance under the Agreement was approximately $ 0 and $ 247,000 , respectively.

During the years ended December 31, 2024 and 2023, the Company recognized $ 18,400 and $ 12,200 in aggregate interest expense, respectively, related to the Company's finance and security agreements.

ELECTROCORE, INC.

3 unchanged sentences

Securities Purchase Agreements

On June 3, 2024, the Company entered into a securities

purchase agreement (the “Registered Direct Purchase Agreement”) with an

institutional accredited investor (the “Purchaser”) for the sale (the

“Registered Direct Offering”) by the Company of pre-funded warrants (the “RD

Pre-funded Warrants”) to purchase up to 225,000

shares of the Company’s common stock, par value $ 0.001

per share (the “Common Stock”) (the “RD Pre-funded Warrant Shares”).

concurrent private placement, the Company issued and sold to the Purchaser

unregistered warrants to purchase up to 112,500

shares of Common Stock (the “PIPE Warrants” and shares of Common Stock

underlying the PIPE Warrants, the “PIPE Warrant Shares”).

Each RD Pre-funded

Warrant in the Registered Direct Offering was sold together with one-half of one PIPE Warrant at a combined effective offering price

of $ 6.4925 per share.

The PIPE Warrants became

exercisable after the date of issuance at a price of $ 6.43

per share and will expire on June 5, 2029 .

In a separate private placement, on May

31, 2024, the Company entered into securities purchase agreements with certain

institutional and accredited investors and directors of the Company (the

“Private Agreements”), which collectively provided for the sale by the Company

of (i) 438,191 shares of Common Stock (the

“Private Shares”), (ii) pre-funded warrants (the “Private Pre-funded Warrants”)

to purchase up to 770,119 shares of Common Stock

and (iii) warrants (the “Private Warrants” and together with the PIPE Warrants,

the “Warrants”) to purchase up to 604,150 shares

of Common Stock (the “Private Warrant Shares”).

Each share of Common Stock (or

Private Pre-funded Warrant) in this private placement was sold together with one-half of one Private Warrant at a combined effective offering

price of $ 6.4925 per share.

The Private Warrants

will have the same terms as the PIPE Warrants sold to the Purchaser.

The Private Shares were sold at a

purchase price of $ 6.43 per share.

Pre-funded Warrants and Private Pre-funded Warrants were sold at a purchase

price of $ 6.43 minus $ 0.001

per Pre-Funded Warrant, and are exercisable immediately at an exercise price of

$ 0.001 per share.

The PIPE Warrants and Private

Warrants are only exercisable for whole shares of Common Stock.

The net proceeds to the Company

resulting in the sale of securities described above was approximately $ 9.0 million, after deducting other offering expenses

payable by the Company, and excluding the proceeds, if any, from the exercise

of the warrants.

Of the net proceeds, $ 1 million

came from the issuance of securities to the Company’s legal counsel.

issuance of the shares, certain of the Company’s financial obligations to its

legal counsel were deemed paid and satisfied in full.

The company accounts for common stock warrants by

first considering the criteria under ASC 480 for liability classification, then

evaluating the indexation requirements and the scope exception in ASC 815-10,

and finally assessing additional equity considerations under ASC 815-40-25 to

determine if the warrants should be classified as equity..

determined that the warrants associated this financing qualified for equity

classification.

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

4 unchanged sentences

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

Reverse Stock Split

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

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

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

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

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

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

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

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

Redemption and Elimination of Series A Preferred Stock

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

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

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

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

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

Dividend Preferred

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

ELECTROCORE, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements — Continued

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

Thus, each one -thousandth of a share of Series A Preferred Stock was entitled to 1,000 votes.

The outstanding shares of Series A Preferred Stock voted together with the outstanding shares of the Company’s common stock as a single class exclusively with respect to the proposal to adopt an amendment to the Company’s Certificate of Incorporation, as amended, to reclassify the outstanding shares of the Company's Common Stock into a smaller number of shares of common stock at a ratio specified in or determined in accordance with the terms of such amendment (the “Reverse Stock Split”).

The Company was not solely in control of the redemption of the shares of Series A Preferred Stock since the holders had the option of deciding whether to vote in respect of the above described Reverse Stock Split, which determined whether a given holder’s shares of Series A Preferred Stock were redeemed in the Initial Redemption or the Subsequent Redemption.

Since the redemption of the Series A Preferred Stock was not solely in the control of the Company, the shares of Series A Preferred Stock were classified within mezzanine equity in the Company’s audited consolidated balance sheet.

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

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

Stock Purchase Warrants

6 unchanged sentences

Outstanding, January 1, 2024

Stock Purchase Warrants ( a )

Stock Purchase Warrants *

Outstanding, December 31, 2024

Exercisable, December 31, 2024

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

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

* A total of 1,608 pre-funded warrants were excluded from this table of which 995 were issued during the year ended December 31, 2024

Net Loss Per Share

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

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

5 unchanged sentences

Outstanding stock options

Restricted and deferred stock units

Restricted stock and unit awards

Stock purchase warrants

20 unchanged sentences

When the Company determines that it will be able to realize some portion or all of its deferred tax assets, an adjustment to its valuation allowance on its deferred tax assets would have the effect of increasing net income in the period such determination is made.

The net change in the valuation allowance was an increase of $ 3.5 million.

The net change in the valuation allowance for the years ended December 31, 2024 and 2023 was an increase of $ 3.7 million and $ 3.5 million, respectively.

The significant components of the Company’s deferred income tax assets and liabilities after applying enacted corporate tax rates are as follows:

4 unchanged sentences

Accrued expenses

Allowance for bad debt

Allowance for credit losses

Charitable contributions

23 unchanged sentences

As of December 31, 2024 and 2023 , the Company had accumulated Federal net operating losses totaling $ 143.6 million and $ 134.1 million, respectively.

Also, as of December 31, 2023 and 2022 , the Company had state post-apportioned net operating losses totaling $ 54.6 million and $ 47.0 million, respectively.

Also, as of December 31, 2024 and 2023 , the Company had post-apportioned net operating losses totaling $ 61.2 million and $ 54.6 million, respectively.

The net operating losses may be available to carry forward and offset future years' taxable income.

6 unchanged sentences

If and when the Company utilizes the NOL carryforwards in a future period, it will perform an analysis to determine the effect, if any, of these loss limitation rules on the NOL carryforward balances .

During the year ended December 31, 2023 in accordance with the State of New Jersey's Technology Business Tax Certificate Program, which allowed certain high technology and biotechnology companies to sell unused NOL carry forwards to other New Jersey based corporate taxpayers, the Company sold New Jersey NOL carry forwards, resulting in the recognition of $ 215,000 of income tax benefit, net of transaction costs.

The Company recognized $ 445,000 of income tax benefit from the sale of New Jersey carry forwards in 2022 .

The Company may be eligible, from time to time, to receive cash from the sale of its net operating losses under New Jersey's Department of the Treasury - Division of Taxation NOL Transfer Program.

During the year ended December 31, 2024 and 2023 , the Company sold New Jersey NOL carry forwards, resulting in the receipt of net cash payments of $ 0.1 million and $ 0.2 million, respectively.

There can be no assurance as to the continuation or magnitude of this program in the future.

As of December 31, 2023 , the Company had Federal and NJ research and development credits of $ 698,000 and $ 198,000 respectively.

As of December 31, 2024 , the Company had Federal and NJ research and development credits of $ 1.2 million and $ 0.3 million respectively.

The Federal R&D credits can be carried forward 20 years and will begin to expire in 2038 .

The New Jersey R&D credits can be carried forward seven years and will begin to expire in 2031 .

August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of

2022 (the Inflation Reduction Act) into law.

The Inflation Reduction Act

includes a new corporate alternative minimum tax (the Corporate AMT) of 15 % on

the adjusted financial statement income (AFSI) of corporations with an average

AFSI exceeding $ 1.0 billion over a three-year period.

The Corporate AMT was

effective for the Company beginning in 2023.

Given the AFSI threshold, the

Corporate AMT was not applicable to the Company in 2023, but the Corporate AMT

may have potential impacts on our future U.S.

tax expense, cash taxes and

effective tax rate.

Additionally, the Inflation Reduction Act imposes a 1 %

excise tax on the fair market value of net stock repurchases made after December

The impact of this provision was not material in 2023 and future

impacts will be dependent on the extent of share repurchases made in future

Uncertain Tax Positions

18 unchanged sentences

This plan reserved 0.4 million shares with an increase to be added annually beginning in 2019 through 2028 up to 4 % of the total number of shares of common stock issued and outstanding on a fully diluted basis as of the end of the immediately preceding fiscal year, provided that the aggregate number of additional shares shall not exceed a total of 3.0 million shares, and a maximum of 2.7 million shares pursuant to the exercise of stock options.

Effective January 1, 2024 , the number of shares reserved under the Plan was increased by 0.3 million to approximately 1.3 million.

Effective January 1, 2025 , the number of shares reserved under the Plan increased by 0.4 million to approximately 1.7 million.

The Company’s policy is to issue new shares of its common stock upon the exercise of stock options, new grants of restricted stock awards, and settlement of restricted stock units.

51 unchanged sentences

Dividend yield

The fair value of the Units is the market close price of the Company’s common stock on the trading day immediately preceding the date of grant.

The fair value of each Stock Unit is the market close price of the Company’s common stock on the trading day immediately preceding the date of grant.

ELECTROCORE, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements — Continued

Segment Reporting

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

electroCore is a bioelectronic medicine and general wellness company dedicated to improving health and quality of life through its proprietary non-invasive vagus nerve stimulation (“nVNS”) technology platform and related product offerings.

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

Medical Devices.

The accounting policies of the Medical Devices segment are the same as those described in Note 2 .

Summary of Significant Accounting Policies.

Our CODM is our President and Chief Executive Officer.

The CODM uses loss from operations, as reported on our Consolidated Statements of Operations, in evaluating the performance of the Medical Devices segment and in determining how to allocate resources to the Company as a whole, The CODM does not review assets in evaluating the results of the Medical Devices segment, and therefore, such information is not presented below.

The following table provides the operating financial results of the Medical Devices segment:

Years ended December 31,

Cost of goods sold

Operating expenses:

Research and development

General and administrative

Sales and marketing

Total operating expenses

Loss from operations

Other (income) expense:

Interest and other income

Other expense

Total other income

Loss before income taxes

Benefit from income taxes

* S ee Note 4 Revenue for geographical and disaggregation information.

ELECTROCORE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Commitments and Contingencies

Stockholders Litigation

On September 26, 2019, and October 31, 2019, purported stockholders of the Company served putative class action lawsuits in the United States District Court for the District of New Jersey captioned Allyn Turnofsky vs.

electroCore, Inc ., et al., Case 3 :

19 -cv- 18400 , and Priewe vs.

electroCore, Inc., et al.

19 -cv- 19653 , respectively.

In addition to the Company, the defendants include present and past directors and officers, and Evercore Group L.L.C., Cantor Fitzgerald & Co., JMP Securities LLC and BTIG, LLC, the underwriters for the initial public offering (IPO).

The plaintiffs each seek to represent a class of stockholders who (i) purchased the Company’s common stock in the IPO or whose purchases are traceable to the IPO, or (ii) who purchased common stock between the IPO and September 25, 2019.

The complaints each alleged that the defendants violated Sections 11 and 15 of the Securities Act and Sections 10 (b) and 20 (a) of the Exchange Act, with respect to (i) the registration statement and related prospectus for the IPO, and (ii) certain post-IPO disclosures filed with the SEC.

The complaints sought unspecified compensatory damages, interest, costs and attorneys’ fees.

The Priewe case was voluntarily dismissed on February 19, 2020.

In the Turnofsky case, on November 25, 2019, several plaintiffs and their counsel moved to be selected as lead plaintiff and lead plaintiff’s counsel.

1 unchanged sentence

On July 17, 2020, the plaintiffs filed an amended complaint in Turnofsky .

In addition to the prior claims, the amended complaint added an additional director defendant and two investors as defendants and adds a claim against the Company and the underwriters for violating Section 12 (a)( 2 ) of the Securities Act.

On September 15, 2020, the Company and the other defendants filed a motion to dismiss the amended complaint for failure to state a claim.

On November 6, 2020, the plaintiffs filed their opposition to the motion to dismiss.

The Company and the other defendants filed reply papers in support of the motion on December 7, 2020.

In addition to the prior claims, the amended complaint added an additional director defendant and two investors as defendants, and added a claim against the Company and the underwriters for violating Section 12 (a)( 2 ) of the Securities Act.

On September 15, 2020, the

Company and the other defendants filed a motion to dismiss the amended

complaint for failure to state a claim.

On November 6, 2020, the plaintiffs

filed their opposition to the motion to dismiss.

The Company and the other

defendants filed reply papers in support of the motion on December 7, 2020.

Argument of the motion to dismiss occurred on June 18, 2021.

On August 13, 2021, the Court dismissed the amended complaint with leave to re-plead.

On October 4, 2021, the plaintiffs filed a second amended complaint in the Turnofsky case.

The defendants moved to dismiss, and briefing on the motion was completed on January 7, 2022.

On July 13, 2023, the court dismissed the second amended complaint with leave to re-plead.

The plaintiffs did not file a third amended complaint.

On August 23, 2023, the plaintiffs provided the court with an order of dismissal, and the court entered the order on August 24, 2023.

On September 8, 2023, plaintiff Carole Tibbs filed a notice of appeal to the United States Court of Appeals for the Third Circuit.

On August 13,

2021, the Court dismissed the amended complaint with leave to re-plead.

October 4, 2021, the plaintiffs filed a second amended complaint in the Turnofsky

The defendants moved to dismiss, and briefing on the motion was complete

on January 7, 2022.

On July 13, 2023, the court dismissed the second amended

complaint with leave to re-plead.

The plaintiffs did not file a third amended

On August 23, 2023, the plaintiffs provided the court with an order

of dismissal, and the court entered the order on August 24, 2023.

8, 2023, plaintiff Carole Tibbs filed a notice of appeal to the United States

Court of Appeals for the Third Circuit.

The appeal has been docketed as number 23-2655.

The principal brief of appellant and appendix were filed on January 5, 2024.

The appellees’ brief is due on or before February 15, 2024, and appellant’s reply brief is due on or before March 15, 2024.

Argument of the motion has not yet been scheduled.

On March 4, 2021, purported stockholder Richard Maltz brought a purported stockholder derivative action in the United States District Court for the District of New Jersey.

The action is captioned Richard Maltz, derivatively on behalf of electroCore, Inc., vs.

Amato , et al., Case 3:21-cv-04135.

The defendants include present and past directors and officers of the Company.

The plaintiff purports to pursue derivative claims on behalf of the Company in connection with the IPO and actions occurring between the IPO and September 25, 2019.

The complaint alleges that demand on the board of directors is excused.

The complaint purports to allege claims against the defendants for violating Section 14(a) of the Exchange Act, breaching fiduciary duties, unjust enrichment and waste of corporate assets.

The complaint also purports to allege claims for contribution in connection with the Turnofsky case described above, pursuant to Section 11(f) of the Securities Act and Sections 10(b) and 21D of the Exchange Act.

The complaint seeks unspecified compensatory damages, interest, costs and attorneys’ fees;

The principal

brief of appellant and appendix were filed on January 5, 2024.

The appellees’

brief was filed on February 15, 2024, and the appellant’s reply brief was filed

on March 15, 2024.

On December 5, 2024, the Third Circuit issued an opinion

affirming Judge Quraishi's August 24, 2024 dismissal of the case and entered

Judgment to that effect.

The Plaintiffs did not move for rehearing, and the

mandate of the Court of Appeals has issued.

The plaintiffs did not pursue any further appeal and the time to do has

On March 4, 2021, purported stockholder Richard Maltz

brought a purported stockholder derivative action in the United States District

Court for the District of New Jersey.

The action is captioned Richard Maltz,

derivatively on behalf of electroCore, Inc., vs.

Amato, et al., Case

3:21-cv-04135.

The defendants include present and past directors and officers

of the Company.

The plaintiff purports to pursue derivative claims on behalf of

the Company in connection with the IPO and actions occurring between the IPO

and September 25, 2019.

The complaint alleges that demand on the board of

directors is excused.

The complaint purports to allege claims against the

defendants for violating Section 14(a) of the Exchange Act, breaching fiduciary

duties, unjust enrichment and waste of corporate assets.

The complaint also

purports to allege claims for contribution in connection with the Turnofsky

case described above, pursuant to Section 11(f) of the Securities Act and

Sections 10(b) and 21D of the Exchange Act.

The complaint seeks unspecified

compensatory damages, interest, costs and attorneys’ fees;

declaratory relief;

and an order requiring changes to corporate governance and internal procedures and a vote on proposed amendments to the Bylaws and Certificate of Incorporation.

On March 8, 2021, purported stockholder Erin Yuson brought a purported stockholder derivative action in the United States District Court for the District of New Jersey.

The action is captioned Erin Yuson, derivatively on behalf of electroCore, Inc., vs.

and an order requiring changes to corporate governance and internal procedures

and a vote on proposed amendments to our Bylaws and Certificate of

Incorporation.

On March 8, 2021, purported stockholder Erin Yuson brought a

purported stockholder derivative action in the United States District Court for

the District of New Jersey.

The action is captioned Erin Yuson, derivatively on

behalf of electroCore, Inc., vs.

Amato, et al., Case 3:21-cv-04481.

The defendants include present and past directors and officers of the Company.

The plaintiff purports to pursue derivative claims on behalf of the Company in connection with a 2019 proxy statement and actions occurring from the IPO through September 25, 2019.

The complaint alleges that demand on the board of directors is excused.

The complaint purports to allege claims against the defendants for violating Section 14(a) of the Exchange Act and breaching fiduciary duties.

The complaint seeks unspecified compensatory damages, interest, costs and attorneys’ fees;

The plaintiff purports to pursue derivative claims on behalf of the Company in

connection with a 2019 proxy statement and actions occurring from the IPO

through September 25, 2019.

The complaint alleges that demand on the board of

directors is excused.

The complaint purports to allege claims against the

defendants for violating Section 14(a) of the Exchange Act and breaching

fiduciary duties.

The complaint seeks unspecified compensatory damages,

interest, costs and attorneys’ fees;

declaratory relief;

and an order requiring changes to corporate governance and internal procedures and a vote on proposed amendments to the Bylaws and Certificate of Incorporation.

The plaintiffs in the Maltz and Yuson derivative actions agreed to consolidate and stay those actions.

The actions are stayed until and through the resolution of any motion for summary judgment in the Turnofsky federal securities class action.

A stipulation to that effect was filed by the plaintiffs on April 14, 2021, and ordered by the court on April 30, 2021.

On June 9, 2023, the cases were administratively dismissed without prejudice.

The Company intends to continue to vigorously defend itself in these matters.

However, in light of, among other things, the preliminary stage of these litigation matters, the Company is unable to determine the reasonable probability of loss or a range of potential loss.

Accordingly, the Company has not established an accrual for potential losses, if any, that could result from any unfavorable outcome, and there can be no assurance that these litigation matters will not result in substantial defense costs and/or judgments or settlements that could adversely affect the Company’s financial condition.

The Company is subject to various claims, complaints and legal actions in the normal course of business from time to time.

The Company is not aware of any further currently pending litigation for which it believes the outcome could have a material adverse effect on its operations or financial position.

The Company expenses associated legal fees including those relating to the stockholder litigation described in this Note 12 in the period they are incurred.

and an order requiring

changes to corporate governance and internal procedures and a vote on proposed

amendments to our Bylaws and Certificate of Incorporation.

The plaintiffs in the Maltz and Yuson derivative actions

agreed to consolidate and stay those actions.

The actions are stayed until and

through the resolution of any motion for summary judgment in the Turnofsky

federal securities class action.

A stipulation to that effect was filed by the

plaintiffs on April 14, 2021, and ordered by the court on April 30, 2021.

June 9, 2023, the cases were administratively dismissed without prejudice.

ELECTROCORE, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements — Continued

The company has and intends to the extent necessary to

continue to vigorously defend itself if these matters are revived.

However, in light of,

among other things, the preliminary stage of these litigation matters, the

Company is unable to determine the reasonable probability of loss or a range of

potential loss.

Accordingly, the Company has not established an accrual for potential

losses, if any, that could result from any unfavorable outcome, and there can

be no assurance that these litigation matters will not result in substantial

defense costs and/or judgments or settlements that could adversely affect the

Company’s financial condition.

The Company is subject to various claims, complaints

and legal actions in the normal course of business from time to time.

Company is not aware of any further currently pending litigation for which it

believes the outcome could have a material adverse effect on its operations or

financial position.

The Company expenses associated legal fees including those

relating to the stockholder litigation described in this Note 15 in the period they are incurred.

Purchase Commitments

7 unchanged sentences

The charge for these payments is included in Selling, general and administrative expense in the accompanying Statement of Operations for the year ended December 31, 2023 .

As of December 31, 2023 , the Company has an outstanding payable of $ 21,000 in connection with these charges.

This outstanding payable is included in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheet as of December 31, 2023 .

As of December 31, 2024 , the Company had no outstanding payable in connection with these charges.

Related Party Transactions

Consulting Agreements

On July 11, 2024, the Company and a member of its board of directors entered into a consulting agreement pursuant to which the board member is expected to begin providing consulting and advisory services to the Company’s Chief Executive Officer for a one -year term as of the completion of his service on the Board, effective as of immediately prior to the Company’s 2025 Annual Meeting of Stockholders.

The director will be paid an hourly or per diem fee for such services rendered, if any , and was granted a stock option to purchase 50,000 shares of common stock of the Company at an exercise price of $ 6.43 per share, which shall vest and be exercisable in 12 equal monthly installments, subject to full vesting, if earlier, immediately prior to the 2025 Annual Meeting of Stockholders or a Change of Control so long as the director remains in continuous service to the Company through such date.

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

What changed 10-K

Item 9A. Controls and Procedures