Okay. Good morning, everyone. We're going to get started with our next presentation of the morning. I'd like to introduce Joshua Lev, Interim President and CFO of electroCore. Good morning and welcome.
Thank you. Thanks, everybody. Can everyone hear me if I just do this instead? Is this better? This is better for me. Is it better for everyone?
They are streaming, though.
They are streaming, though. We'll be here. Most important thing I'm gonna say today is our ticker is ECOR, electroCore. Thank you all for joining us today. I'm pleased to be back here at LD Micro. This is the first time I'm actually here as a presenter, it's very exciting. Forward-looking statements, you'll read a lot of these over the course of the next few hours. They all say the same thing. First and foremost, electroCore is a bioelectronic technology company. Let that sink in for a second. We have a suite of products and devices sold to different customers to help with different forms of chronic pain. Our products are FDA-cleared for different forms of primary headache, such as cluster headache and migraine, both the acute treatment and the preventative treatment.
I joined this company back in 2019 along with the former CEO, who's actually sitting here today, Dan Goldberger, who retired last month. Congratulations, Dan. I'm surprised that this is how you're spending your retirement. We've been able to grow the business over the last five years, compounded annually greater than 50% since joining the company. We have a variable rate sales model, which allows us to not only scale the business, but scale the business in a way that we're ultimately gonna get that operating leverage. We've been able to grow the business compounded annually at 50% while growing our gross profit margins from the low 70s to we just reported in the first quarter of 2026, 87%.
We recently had a leadership change, which I'd mentioned, but as part of that leadership change, we brought in a new Chief Operating Officer who has primary background in selling into the federal marketplace. That's important because our largest customer is the VA. I'll get into that in a few moments. Most importantly is it's a massive, massive opportunity within the VA and the federal health system and one that we've just started to tap. Again, we did $32 million in full-year 2025 and grown at a compounded annual growth rate of greater than 50%. I've said that a few times. I'll say it a few more. We have three different categories of products that we currently sell. All the products on the left are our prescription-based products.
They are FDA-cleared or approved for some form of medical indication. Our flagship product is the gammaCore, which is in the top left-hand corner. We have a general wellness portfolio of products as well, which is comprised of products that are sold under the general wellness guidelines for things like sleep, relaxation, focus, things that are not for medical diagnosis specifically. Lastly, the product on the right, which is also a general wellness product, is also built in conjunction with the Air Force Research Labs in order to help with things like human performance, specifically cognitive performance. Our flagship product is the gammaCore Sapphire. This is the product where majority of our growth has come through over the course of the last five years. We did approximately 70% of our revenue comes from this product, and it's sold primarily into the VA.
The VA loves our product base because we are a non-opioid pain therapeutic. You do not need to inject us. You do not need to ingest us. We do not have bad contraindications with other products, which means that the FDA can prescribe us and prescribe our products to our veterans, understanding that those veterans may be on a whole suite of other products for other issues. We're FDA-cleared for different forms of primary headache, which includes things like cluster headache, migraine. What we find is non-invasive vagal nerve stimulation is a systemic approach to pain. What I mean by that is when you look at other products on the marketplace, like a CGRP, which is a medical product utilized, a pharmaceutical product utilized for migraine, those things are very specifically pinpointing to try to treat some form of something.
Think of a CGRP or a pharmaceutical-based product like a sniper shot. It is either very specifically gonna turn on a gene or turn off a gene. Our product is different. Our product is a systemic approach because the vagus nerve, which is also known as the 10th cranial nerve, is the largest nerve in the system. It touches all the visceral organs. Therefore, when you stimulate the vagus nerve, you're not just touching the brain, but you're touching all of the different organs that are attached. In May of 2025, we acquired a company called NeuroMetrix. NeuroMetrix has a product called Quell for fibromyalgia. Fibromyalgia is a huge unmet need both in the U.S. but also specifically within the Veterans Health Administration.
For those of you who may or may not know, those people that are deployed actually come back approximately 11%-14% of people come back from being deployed with some form of fibromyalgia. We are the only FDA-approved product on the marketplace for fibromyalgia. When we acquired this company, the product was doing approximately $50,000 a month in revenue. In the first quarter of 2026, we announced that we did $400,000 in the month of revenue. We did in excess of $1 million for the first time ever in this product line alone in the first quarter. As you can see, since acquiring the business, we've generated approximately $2.7 million. This product fits in very well into our bag.
Our sales team is already selling to the same people for headache that they are selling for fibromyalgia. All we did is take that product, put it in our bag, and open up a new opportunity for them because it is a huge unmet need, and it's primarily focused in pain. A few years back, we launched a suite of general wellness products, which we sell under the name Truvaga, www.truvaga.com. This product itself is sold direct to consumer. What we do is we put out media spend. That media drives customers to our website who ultimately go ahead and purchase the product. That variable sales model, the ability for us to play with how much media spend that we actually spend, has us measuring what is our efficiency ratio, or for every $1 of media spend that we spend, what are we able to generate in revenue?
What we've been able to find is we've been hovering around that $1.90 of revenue for every, call it $1 of media spend. In the first quarter of 2026, we announced that we're really focused primarily on the efficacy or the efficiency, I should say, of that media spend. The way that we've been able to do that is rather than go ahead and focus on the top of the funnel, where you're focused on education, where you're focused on bringing people in to learn about our product for the first time, what we've been able to do is focus primarily on the second and third areas of that funnel, lower down.
The way that we're doing that is by partnering up with different influencers, different affiliates, different celebrities that are going out there and actually talking about our product that they're utilizing in their every day, and we're leveraging their spend in order to help drive the efficiency ratio. In the first quarter, we were able to show a 14% efficiency. What that means is we were able to generate $2.25 of revenue for every $1 of media spend that we ended up spending. The biggest example I could point to for this is those of you may be familiar with the name Miranda Kerr. Miranda Kerr is a former Victoria's Secret model.
She was on a podcast a couple of months ago talking about her nighttime routine, and she said, "I swear by this product called Truvaga." We had no relationship with her at the time. We didn't even know that she knew that our product existed. After she made that announcement, we went ahead, we reached out to her, we started discussing with her what the potential opportunities were. Last week, many of you may have seen that we did a co-promotion where us and Miranda Kerr are promoting our product. How that's helpful is Miranda Kerr has 14.4 million followers on Instagram. She went out, and she just posted her product. If you buy our product, the first 1,000 purchasers of this promotion will also get a package of her face creams and night serums.
That's a way that you could increase your efficiency in a model where you're leveraging other people's media spend. You're getting what's called the halo effect. This product, TAC-STIM, also known as Tactical Stimulation, was developed in conjunction with the Air Force Research Labs. It's a very interesting background. What happened was, is an Air Force commander came to us and said, "I have a problem. The problem is I command a group of drone pilots, and the drone pilots are based out in Las Vegas, Nevada. We take a trailer, we black it out, we put in screens, and they go ahead, and they fly drones for anywhere from, call it 12- 16 hours straight. They take uppers during the day to keep them awake. They take downers at night.
They drive home in the middle of the desert, and they get into car accidents and die. Those are very expensive assets to replace. Can we use vagal nerve stimulation as a way to better help modulate sleep? They were able to test it, and what they showed was not only did their sleep improve and their mood improve and their focus improve, but they were able to identify targets more accurately over a longer duration. That's probably due to the fact that when people sleep better, they feel better. At the same time, the Defense Language Institute, which is where we send our special operatives to go ahead and learn a second and third language. For those of you Jack Ryan fans out there, you know how he speaks multiple languages.
We send our special operatives, which are high IQ individuals, to learn a second and third language. They did a study, and they were able to show using Cantonese and Farsi that people utilizing our product were able to learn the language quicker and retain it longer than those who didn't. Why that's important to the Defense Language Institute or DLI is because that means higher throughput. People don't have to stay there as long. We could put people through the system. More people through the system means we're gonna save more money on the back end. Taking these two studies together, the Air Force Research Labs in conjunction with the Boost program, we developed this product called Tactical Stimulation or TAC-STIM. This product is used for active duty military. It is a ruggedized version of our general wellness product.
You can't tell by looking at it, but it is incredibly rugged. It is hard. We had a few specific requirements from the government. The first was it needed to be rugged, so you could drive a tank over it. The second was it needs to be hard enough that if we run out of bullets, we could smash someone on the head with it. It also needs to be super simple, so there's only three buttons: up, down, and on and off. We did about $400,000 worth of revenue in this product in 2025. That's down actually from $1.3 million in the year prior. This is a very lumpy business, and when we think about government spending and how it affects our products, this is the product it affects the most.
The reason why is if you're a government agency or if you're a special forces group that's going ahead and needs to spend their money on something, let's say, for example, more bulletproof vests because you're going into war, are you gonna be spending it on that, or are you gonna be spending it on this? Huge total addressable markets. I'm sure everybody in this room understands that if there weren't big addressable markets, we wouldn't be in business. That being said, our largest customer, the VA, has 9.5 million covered lives. There's about 600,000 headache patients. We've sold to about 2.5% of those over the course of the last three years. In 2025, we got on formulary and on contract with Kaiser Permanente.
In terms of scale, Kaiser has twelve and a half million covered lives versus the VA's nine and a half million covered lives. Our belief is if we can prove the model out in Kaiser, we could start opening up ubiquitous insurance coverage because Kaiser is the largest managed care system in the country. They look the most like the VA. When other commercial insurers look at our product, they say, "Your patient population is different than ours." Well, that won't be the case with Kaiser. We are a platform technology. I've spent the most of the last eight minutes talking about headache and primary headache and fibromyalgia for our Quell product. Vagus nerve stimulation is a platform technology. What I mean by that is implantable vagus nerve stimulation has been used for years. It's being used for things like epilepsy and depression.
Well, we are FDA-cleared for primary headache and Quell for fibromyalgia, of course, for our other product. Vagal nerve stimulation, because it touches all the visceral organs, can be utilized across a suite of different diagnoses, right, or medical indications. Right now, we've got greater than 30 IITs, investigator-initiated trials. These are people coming to us and saying, "I want to use your technology to study something." Of course, the lowest-hanging fruit for us is going to be something like PTSD because our largest customer, the VA, is going to be looking for something like for PTSD because nothing exists. This is also being studied in areas like mTBI or mild traumatic brain injury. We've got areas, we talked about fibromyalgia, our Quell product is also being studied for chemotherapy-induced peripheral neuropathy.
About 70% of people that go through chemotherapy have CIPN. There is nothing on the market for that. It's being studied for long COVID. During COVID, we were one of the only companies that got what was called an emergency use authorization, an EUA, for symptoms associated with long COVID. The reason why that happened is the thesis behind this company was the inventors were thinking, "How can I find a solution to a peanut allergy for my kids without actually having to give them pharmaceutical products?" Vagal nerve stimulation, they did it in rats. They showed that the airways within the respiratory distress and the airways were becoming less and less inflamed. They did in-person trials. At the time, we had a board member from Merck, and Merck was our largest investor.
In the human trials, people said, "Yeah, the inflammation in my lungs are going away, so I could breathe easier, but my headaches are going away." At that time, management decided to go into the headache business. Point here is there is a whole opportunity that exists out there as it relates to vagal nerve stimulation and what it could be used for. The challenge we have is resource allocation. We can't boil the ocean. We can't do everything. Where are the few areas that we could focus on that we can get the indications, expand our label, and go ahead and commercialize those products? We have a broad patent portfolio.
Our patents are primarily around certain things like how do you stimulate the vagus nerve non-invasively without doing any damage to the cervical region of your neck, to how do you control a stimulation device with a mobile application. We're currently going through a litigation. Someone is infringing on our patents. A large company or a larger company based in Lithuania is utilizing our patents for their product, and we have been publicly announced it, and you could read it in our filings, the updates around that patent litigation. The idea here, though, is we do have a breadth of patents, and we do intend to go ahead and actually perfect those patents so that people can't go ahead and utilize them without our permission. All of that being said, we are here for what reason?
To talk about what are the catalysts and what are the things that investors should be looking at as they think about electroCore, ECOR, over the course of the next few years, 18-24 months. We've got three main catalysts that we've been focused on. Number one is R&D related. Our product is a platform technology. That means there should be a suite of indications, products, and features that could be able to come out over the course of the next 18-24 months that we could point to the street, so that people understand and see that we're actually doing the things that we're gonna say that we're going to do. As I mentioned, we talked about PTSD. There are other products that are in the pipeline, but there's also things like features.
For example, our Truvaga Plus device, which is our general wellness device, is an app-enabled device. There is a time where, in theory, you could think of it as people are paying us for data today because they're getting our app for free. The way that they pay us is they're giving us data. They're actually paying for it. They're just paying for it in the forms of data. The next iteration to that is how do you add value-added services like content, for example, things like integration with your Apple Watch, with your Whoop band, with your Oura Ring, to sit there and say, "Okay, you're doing vagal nerve stimulation, and you'll pay a modest fee in order to have access to combine those two pieces of technology." Lastly, how do you use AI to make a closed-loop system to say, "You know what?
I see that you stimmed an hour before you went to sleep for the last two nights. Your sleep is improving over those last two nights. Maybe you wanna stim an hour before you go to sleep tonight. That value added function, that closed loop system, is an enhancement of features that we could do over the course of the next 18-24 months, and we plan to point to. From a commercial point of view, as I'd mentioned before, we just brought on a new Chief Operating Officer who comes from the federal marketplace. Yes, we do expect him to show acceleration in the VA. In his last company, he was able to grow the VA business from $20 million - $80 million over 12-18 months. That was all in the VA.
We haven't even began to touch other elements of the federal marketplaces. Things like federal workers comp still exist as opportunities for us, potentially TRICARE, but also active duty military. Our complete practice of active duty military right now comes from that TAC-STIM product. That means that we don't have any active duty military really utilizing our gammaCore product or our Quell products for headache. As I mentioned before, 11%-14% of people coming back from deployment come back with some form of fibromyalgia. As I mentioned, Kaiser Permanente is a particularly large opportunity for us. We're on contract. We're on formulary. That happened in late 2025.
That opens up our next opportunity for us to get not from just Kaiser Permanente, but Kaiser Permanente then hopefully to TRICARE hopefully to Optum Health or Humana, so on and so forth. Last but not least, the most important part of it all, which is it's great if you can grow and it's great if you could do the things you want to say you're going to do, but how are you going to show us it's working? Those are the operating results. Not only the accelerated revenue that we hope to sit there and put out, which we've been able to do over the course of the last five, six years, right? Growing compounded annually greater than 50%.
On top of that, how do you go ahead and actually get to cash flow break even as identified or as illustrated by adjusted EBITDA positive, right? One of the areas that we definitely wanna focus on is how do you make our business more efficient? Primarily, when you look overall at our sales and marketing expense as a percentage of overall revenue, that number is at approximately 62%. If you look at comparable companies in the medtech space, that number is, call it, 40%. We believe that there's opportunity for us to get operating leverage out of our P&L as we can start becoming more efficient, growing our top-line revenue, and then ultimately getting to the point where we're showing positive adjusted EBITDA.
If I hadn't mentioned it before, we've grown our revenue over the last five years, compounded annually at greater than 50%. Majority of that is due to the man sitting in the back of the room, Dan Goldberger. Our plan is to go ahead and continue to grow that at least 30% growth year over year is the guidance that we put out. We have a very clean cap table. Our cap table is comprised of common shares. Our largest shareholder wanted to purchase more stock in our company, but he has a 9.9% blocker, so he purchased pre-funded warrants, which means we got the cash, but he's technically doesn't own the stock, so that's what the pre-funded warrants are. All of the warrants that currently sit on our cap table are owned by insiders or board members.
They are plain vanilla warrants. There is no Black-Scholes calculations. There are no anti-dilutes. There are no price resets. Plain vanilla, owned by our board members who are looking for an opportunity to invest more in our company. Last but not least, we've got long-term employee incentive. Not listed here is we have about $7.5 million of debt that we took about a year ago from Avenue Capital. That debt is looking or starting to amortize beginning in March of 2027. Experience management team, two of our current managers of the management team, number one, Dr. Thomas Errico, he's our Chairman. He's an inventor. He's a founder. He's a large investor in the company. Dr. Peter Staats is also an inventor, large investor, and founder of this company.
Still involved in the day-to-day, and doing whatever they can to help try to get vagal nerve stimulation and bioelectronic technologies out to the world. Myself, I've been with the company since 2019. I was joined as part of the turnaround team. I've since taken on the position of interim president. Before that, I was interim president and CFO. Before that, I was the CFO. Before that, I was the chief strategy officer. Before that, I was the VP of finance and strategy. Lastly, our new Chief Operating Officer, Mike Fox. With that, ECOR is our symbol. I'm happy to take any questions that anyone may have. Yes, Mike.
You've done a great job there.
Thank you.
look, there's a lot of companies in this business. it's getting very competitive. Do you have a unique value differentiation in the way you vibrate, the vagus nerve or anything inherent to that, or are you a first mover advantage kinda guy?
Yeah.
Tell me about all this.
So, so-
That we're hearing everywhere now about this.
The question for those people that are sitting in live stream is around what is our moat, right? Is it first mover advantage? How do you compete with the other competition that exists? It is becoming an increasingly more competitive marketplace. To answer your question, yes, we do have a tremendous amount of IP. Specifically, what makes us unique is the ability to stimulate the vagus nerve in the cervical region of the neck. Majority of the vagal fibers that exist run up and down the neck, the cervical region. There are other companies that are out there that talk about the ability to have what are called auricular nerve stimulators, which is there are branches of the vagus nerve that touch or go through the ear.
However, only about, I think it's 12%-14% of vagal nerve fibers actually go through there versus 80%+ that are in the cervical region. The first advantage that we have is our technology specifically has the ability or protects us to stimulate the vagus nerve non-invasively in that cervical region. The second answer to that question is I actually think rising tides raise all ships to some capacity. If you're not stimulating in the, in, sorry, in the cervical region or utilizing our IP, I do believe that the fact that more competitors are coming is actually a good sign. People really don't know about vagal nerve stimulation.
Everyone, I'm sure, here in this room has seen cold plunges. What people don't understand is a cold plunge is actually just stimulating your vagus nerve. You're shocking your vagus nerve. You're welcome to sit in an ice bath for three minutes, or you could use our device for two minutes and have the same effect.
Is there any uncomfortability about the cervical? Pardon me. Can I follow on? Is there any uncomfortability to the cervical versus the ear?
No. Actually, I would submit that using the cervical region is more comfortable than the auricular. The reason why is no matter the type of device that you use, you need to have some form of conductive gel. When you use an auricular device, that means you have to put gel or some form of a gel-type electrode in your ear, which feels uncomfortable. The way I describe it is I think vagal nerve stimulation feels like pins and needles at its worst, but people have the ability to control it. The device itself is handheld and controlled by the individual that's using it. You don't have to use it in a way that's uncomfortable if you don't want to. You can go as hard or as high or as low as you'd like.
Thank you.
My pleasure, Mike. Any other questions? It looks like I've ran out of time. No? All right. Well, thank you everyone for coming.