Hi, can you guys hear me? Oh, that is loud. Okay. Now presenting Joshua from electroCore.
Everyone, good morning. I do not think I need this, right? Good. We are webcasting. It is good to see some- We are webcasting. Oh, we are webcasting, so I do need this. We are webcasting. It is nice to see some familiar faces here. I saw Robert Kraft here before, so if you are still in the room, thanks so much for having us again. We were at the last conference, and it was fantastic in Vegas, and here we are again. Let us see. All right. So for those of you who are not familiar with us, electroCore is a commercial-stage bioelectronic health and wellness business. It is about as far and as different from the previous presenter as we could possibly be. We have got two main bioelectronic technologies, and these technologies use bioelectronic systems as a way to go ahead and help impact both the health and wellness of patients or consumers.
We have got two primary classes of products, both prescription as well as health and wellness. I got involved in this company late in 2019 as part of a turnaround. The idea back then was we had this amazing vagal nerve stimulation device, which is a non-invasive device that is a handheld device. We had just gotten our first FDA clearance, and we had a very successful IPO, but prior management really had a hard time transitioning from that R&D business to the commercial business, and that is sort of when I got involved. But since then, we have been able to focus really primarily on areas where we are reliably getting paid. We have been able to grow our revenues about 50% compounded annually over the course of the last five years, with full year 2025 revenues peaking at about $32 million.
Through the first six months of 2026, our revenue was $19 million, so we are at approximately a $40 million revenue run rate. We have been able to do that while expanding our gross profit margins from the low 70s to the mid to high 80s. So we have been able to develop this organization with this infrastructure that shows an ability to scale once you get past those fixed expenses. The real question here, while you are all sitting in the room, is why now? About 70% of our revenue comes from the VA. Why that is relevant to today is because in April of 2026, our former CEO retired, and we brought on a new Chief Operating Officer as well as my new Co-CEO, named Mike Fox. Mike Fox comes to us with approximately 35 years of experience in commercializing medical devices.
But more pertinently, he spent the last 10 to 15 years really focused on selling devices into the federal marketplaces. So expanding past the VA, but also opening up places like federal workers comp, active duty military, medical treatment facilities, TRICARE, so on and so forth. So when you think about the why now, and as I go through a little bit more about what it is we're looking to accomplish, is we're really doubling down on this ability to scale our medical device side of the business, which has very high contribution margins and very good unit economics, and really focus on accelerating that revenue throughout not just the VA, but other areas of the federal marketplace. Here's a nice little chart of our different devices, and I'll walk through them, but the products all the way on the left are our prescription-based products.
Those are the products primarily when we say that we sell them into the VA, those are the products we sell. The two middle products are classified as general wellness products, and what that means is we could sell them under the FDA guidance document that says if a product is safe and you don't make any sort of medical claim, you could call it a general wellness product. Good example of that would be, I could say my Truvaga device, the one in the middle, which we sell direct to consumer, helps improve your sleep, but I cannot say it improves or treats your insomnia, because insomnia is a medical diagnosis. Right? Could help with sleep, can't help with insomnia. And the product here all the way to the right is our general wellness product that's actually developed in conjunction with the Air Force Research Laboratory.
It is a B2B business product. This is a white label product that we developed for the Air Force and Special Forces units that's utilized by active duty military primarily for cognitive enhancement and human performance. And I'll talk about a little bit of that later. I see people got interested there. I'll touch on that in a bit. So this is our flagship product. It's called gammaCore. gammaCore is a non-invasive vagal nerve stimulation product. As you can see, it's a handheld device that you hold to your neck for approximately two minutes. It'll beep, and then depending on what the protocol may be, you would either use it again for two minutes, you would use it in the morning and in the evening. This product is primarily prescribed only for different forms of primary headache. Primary headache would include things like migraine, cluster headache.
We have about six different FDA clearances for this, so different areas where the FDA has said you can sell it for these particular indications, and those all are all around those different forms of primary headache. As you can understand, the reason why the VA really likes this product is because it is a non-pharmaceutical, non-opioid-based pain therapeutic. So said differently, if you're a veteran and you're on a lot of different meds, the VA likes the idea that this product doesn't have to be injected or ingested by the body. It's very safe. There are no contraindications with other devices. There are no contraindications with other medications. The other reason why the VA really likes this product is because the vagus nerve, for those of you who are not familiar, is the largest nerve in the body.
It's the 10th cranial nerve, and it touches all the visceral organs. When you stimulate the vagus nerve, the way I like to describe it, and again, we talk a lot with the military, right? It's more of a buckshot approach. It's a systemic approach to therapy. When you stimulate the vagus nerve, the entire nerve gets activated, and that activation touches all the organs for which the nerve itself is connected. So it's a systemic approach to therapy. In contrast, when you take a pill, a pharmaceutical, those are usually gene inhibitors or gene accelerators. What those do is they're like a sniper shot. They very specifically touch one particular area, and they treat one specific thing. Because the vagus nerve is activated when you stimulate it's not just the brain that's getting the therapy.
The people who have the greatest benefit with our product are the people that have a lot of things wrong with them, because they're getting activation across areas like their stomach, their liver, their spleen, of course, their brain. In May of 2025, we acquired a company called NeuroMetrix. When we acquired that company, they had this great asset called Quell Fibromyalgia. Quell Fibromyalgia is the only FDA-approved product for fibromyalgia. Now, when we acquired this business, the company was going through a bit of a turnaround themselves, and they were doing about $50,000 a month in revenue. Since acquiring this product, we've been able to put it into our bag with our individual salespeople that sell into the VA, and we've been able to grow this business about 30% sequentially. We tapped out last quarter. We did about $1.3 million worth of revenue.
Again, the reason why the VA likes this is a non-opioid-based pain therapeutic. But what's really compelling about this product is we are just barely scratching the surface. We sell this product into roughly 30% of all of our accounts, meaning there's still 70-plus accounts that exist within our marketplace that we haven't even begun to touch because we have to introduce it, we have to go through the sales team and sales individuals. But what's also compelling about this product is when you are a member of the government, or really specifically an active duty military member, about 2% of active duty military members go into deployment with having some form of fibromyalgia. That number expands to about 8%-11% coming back from deployment.
If you think about this pipeline of potential patients that we have in a marketplace where there is no other product that exists, this product has a very, very big road ahead of it, or we believe at least it does, as potential to be the leading product, really the only product, for fibromyalgia. I mentioned earlier, this is our product called Truvaga. It is a direct-to-consumer product. We sell this product through our website, www.truvaga.com. Good to see people taking notes there. This product itself is used for different forms of general wellness, and what that means is sleep, relaxation, stress. This is typically sold to people who are trying to be biohackers, or really trying to help modulate the way that their body is dealing with stress. The vagus nerve really controls the parasympathetic nerve system.
The best way to describe it is the sympathetic nerve system lifts up your fight or flight. It gets you very excited. The parasympathetic nerve system is what brings you back down to normalcy. When you stimulate the vagus nerve or utilize our product, it is a big on/off switch. It basically tells your parasympathetic nerve system, "Hey, you got to come back down to equilibrium." That affects a lot of different things like inflammation, by way of example, right? Because what inflammation is your body's reaction, a systemic reaction, to some form of outside body that needs to be brought back down to normalcy. Otherwise, you swell, you have too many white blood cells, so on and so forth. These products, again, as I mentioned, are sold direct to consumer. It is a consumer electronics business.
Fundamentally speaking, the contribution margins on this business are not as good as the medical device business, and we have said publicly that because one of our stated goals is to get to adjusted EBITDA positive by the back half of 2027, we would rather grow this business slower but more profitably than continue to accelerate the growth in this business. In 2024, we did about $2.4 million of revenue through this product. In 2025, we did about $5 million. We do not have to grow triple digits in this business because our real stated goal is to get to that adjusted EBITDA positive. This is our product called TAC-STIM, short for tactical stimulation. It was developed in conjunction with the Air Force Research Laboratory. There were two studies that were basically ongoing around the same time with one another.
The first was a drone pilot commander came to us and said, "I have a problem. My drone pilots are in the middle of Las Vegas, in the middle of an outfitted trailer. It is completely pitch dark. They are flying drones and have to make split-second decisions. Is that speckle an insurgent that needs to be taken care of? Is it a child? How do I keep them engaged?" What they do is they take uppers to stay awake and engaged, and then they take downers on the way home, and they get into car accidents and they die. As he stated it, those are very expensive assets to replace. We need a better way to modulate their fight or flight, and their coming up and down.
They did a trial with our device, and what they were able to show was that non-invasive vagal nerve stimulation was able to improve the sleep, improve their mood, but because of that also, we think, right, that that improved sleep resulted in more accurate identification of targets over a longer duration. Around the same time, the Defense Language Institute, which is a place that the U.S. government sends our Special Forces operatives to learn a second and third language. For those of you Jack Ryan fans in the crowd, you know that he goes out and he speaks multiple languages. We actually, the U.S., has a place where we educate people to do that, and it is called the Defense Language Institute.
They did a study and they showed that people utilizing our device were able to learn a second and third language quicker and retain it longer than those that didn't. They did that study using Cantonese and Farsi. Those were the two languages. Why that's relevant to the Defense Language Institute is because of throughput. The more people you can get in there for the shorter amount of time, the more it saves the government money. The challenge that they had with our device at the time was it was a prescription-based only product. The government doesn't want that because there's a lot of red tape to prescribe a device within the active duty military. So we came out with a general wellness product. We then turned that general wellness product also into a product that allowed us to sell direct to consumer.
This device itself is a military spec version of our Truvaga product. It is developed for the specs of the Air Force Research Laboratory, which they wanted. There were very few specs, but they were important. Number one is it had to be made out of really hardened material. You needed to be able to run over it with a tank, and you need to be able to use it as a weapon to smash someone over the head if you ran out of bullets. Number two, it needed to be really simple for our government. Three buttons, on, up, down. Three settings, low, medium, and high. Of course, it needed to have a belt clip, which you guys can't see from this rendering. So those are our main products which help us sort of go into what are our total addressable markets.
As I'm sure everyone in the room understands, we wouldn't be in this business if we didn't think there were large total addressable markets. Within the VA alone, there's approximately 1,300 locations that write prescriptions. Of those 1,300, there's approximately 170 locations that have a budget, meaning they are what's called a VA Medical Center, and they have the ability to act as their own unique customer. We have sold into approximately 150 of those 170 locations. There's approximately 600,000 headache patients within the VA. We've sold into approximately 3% of those. So huge total addressable market, and that's just headache. PTSD, which is another area where we know our product is being utilized off-label, we have ongoing studies for PTSD, is a massive marketplace, as I'm sure you all understand within the VA, and there's about 9.5 million covered lives that fall within that category.
From the commercial side of the house, the health and wellness industry is tremendous. I can make that number that says 101 million total addressable market, I can get that number up to $5 billion depending on what we include. That could be everything from your personal trainers to your gyms to the cold plunges. By the way, cold plunges, which I'm sure you've heard of before, all you're doing is you're stimulating the vagus nerve. So you could utilize our device and save yourself three minutes of torture. Our device itself is not just a single product company. We are not just a headache product. Vagus nerve stimulation, because it's therapeutic and it's systematic, has the potential for multiple indications at some point in the future. We're being studied in over 30 investigator-initiated trials.
Those are investigators coming to us and saying, "I think non-invasive vagal nerve stimulation can work for this." Those range everywhere from PTSD, as I mentioned, to mild traumatic brain injury, gastroparesis. We did a study in stroke. The whole purpose, the takeaway from this slide is we are not a single product, one shot on net for all you Canadians. We are not a one shot on net company. There are multiple potential indications that exist within the technologies that we have. We talked a little bit about Quell earlier. Quell is not a non-invasive vagal nerve stimulation device. It is a sophisticated type of TENS unit that has a closed loop system. For those of you who follow our company, you would make note that earlier today we filed or we made an announcement that we filed a 510(k) for chemotherapy-induced peripheral neuropathy. What is that?
People that get chemotherapy that have very high neurotoxin chemotherapy. About 50% of them develop some form of neuropathy in their limbs. So they lose feeling, they get pins and needles, and that can be very dangerous. You could literally be walking and then all of a sudden you lose feeling in your foot. About 50% of the people that get chemotherapy have some form of neurotoxin. About 50% of those end up with some form of chemotherapy-induced peripheral neuropathy. There is no product, medical or pharmaceutical, on the market that is currently indicated specifically for CIPN. We filed a CIPN application earlier with the FDA. We announced it today, and what was really interesting about that is we have Breakthrough Device Designation for that, similar to we had Breakthrough Device Designation for PTSD.
When we went to the FDA, we actually first filed a De Novo, and they came back to us and said, "We've looked at your information, and we don't think you need to go down the De Novo path. We want you to come back as a 510(k)," which is what we did. Our technology is patent protected. We have about 250, call it patents and patents pending, both here and the U.S. I'd say the main two categories and classes of our patents, number one is going to be cervical non-invasive vagal nerve stimulation, so being able to stimulate the vagus nerve specifically in the cervical region of the neck. The reason why that's important is about 80%-90% of the vagal fibers run up and down the neck. About 2%-14% run in the ear.
There are competitors out there that exist for auricular, but those auricular devices need to be used at a higher strength and a longer duration because it's only 2%-14% versus the 80%-90% in the neck. The other patents we have are really around mobile. How do you control a stimulation device using a mobile app? Those are the two main categories and classes of our patents. When we talk about the strategic catalyst, when I took over as Co-CEO now and CFO in April of earlier this year, we said that there's really three main catalysts that we want to focus on as an organization and as a business, and something that we really want our investors and our analysts to focus on as we go through the next iteration and maturity of our company. The first is from an R&D perspective.
We are not a single product, single customer company. We are here to change the narrative. We are here at this conference so that investors and analysts understand that we have done a really good job of developing a headache product within the VA, but we have so much more to offer. We have that multiple shots on net potential other indications, things like filing new indications such as CIPN. Today's filing that we announced was the first filing that we've announced in five years. We've been talking about the potential of our technologies and other indications for as long as many of our analysts would care to admit, but we've actually done something about it now. That also includes not just new indications, but it also includes new products, new features, and things of that nature.
The second is that commercial diversity that we need to really achieve. We have done a very good job of selling into the VA, but we've really just scratched the surface. As I said, 3% of the headache population is really what we've served so far. Yes, we've sold into many of the VAs, but bringing in new commercial leadership that has an ability to go ahead and actually place us in a situation where we can open up other federal marketplaces such as federal workers comp, active duty military, hopefully TRICARE. One of the things that we announced in late 2025 was that we got on formulary and on contract with Kaiser Permanente. In the United States, the largest managed care system is Kaiser Permanente. Second largest, the VA. Kaiser Permanente, 12.5 million lives. VA, 9.5 million covered lives.
Making progress in other areas of commercial potential opportunities will help diversify this idea that we are just a single product, single customer company. Last but not least is really the proof is in the pudding, the operational results. We've said publicly that our goal through this recent commercial transaction and commercial transition that we've gone through is to accelerate revenues. How are we going to do that? We have to show an ability to grow revenues, but on top of that, do it in such a way that's operationally efficient. One of the stated goals that we have is to bring down our sales and marketing as a percentage of revenue from where it was in about 60%, which is outside the norm of what companies in our space do. Typically, it'll be between 40%-50%. Bring it down to that 40%-50%.
Ultimately, if we do those things, we get to adjusted EBITDA positive. 50% compounded annual growth rate, just on a chart. Very clean cap table. The people that were behind this company over the last five, six years, including myself, have done a job that I take a lot of pride in, which is really protecting our cap table from different forms of toxicity. We have no ratchets. We have no anti-dilutes. We've got no Black-Scholes warrants. The only people that hold warrants in our company are either insiders or board members, pretty much. The last two equity deals we did were unit deals of a share and a half warrant with our board members. The pre-funded warrants are held by our largest institutional investor. They wanted to make sure that they were able to maintain their equity position but have a blocker.
So that's where their warrants are. The rest of the warrants are really held primarily by insiders and board members. So very clean cap table. We also have about $7.5 million worth of debt on the books, which will begin to amortize in March of 2027. Experienced management team. Dr. Tom Errico is our founder. He is one of the inventors. He is one of our largest investors. He invests in almost every round. If you look at our Form 4s that exist out there, you will see that he constantly is putting in and exercising his warrants. So he invests along with the company. My background is corporate strategy originally at HSBC. But really more pertinently to everyone in this room is I ran a family office and worked at a family office making investments in small cap, micro cap, and venture stage companies.
Being able to grow companies in this space. Mike Fox is our Chief Operating Officer as well as my Co-CEO. He is the one that comes to us with all these years of experience. Last but not least, Dr. Peter Staats is our Chief Medical Officer. He is still one of the founders and inventors of our technology. In fact, it was his thesis that said, "How can I come up with a way to solve for respiratory distress associated with a peanut allergy?" Because his daughter had a peanut allergy and he did not want her taking medication. That is how we got to where we are today. He said maybe this non-invasive vagal nerve stimulation thing will work. We did trials. Rat trials showed it worked for respiratory distress. We got an EUA during COVID for respiratory distress associated with COVID.
Then we did in-human trials, and the patients in the in-human trial said, "Yes, my lungs feel better, but my headache is gone away." Prior management said, "Great, we are a headache business." That is how we ended up here. So that is it. Most important thing on this slide is our ticker is ECOR. Do not have a lot of time left, but I am more than happy to take questions in the minute I have left. Yes, Carl.
Do you know when you will hit breakeven? Or not sure yet?
We said we are going to be adjusted EBITDA positive in the back half of 2027. That is really the only guidance we have given. Perfect. Yeah. Yes.
Are you fully funded until then?
At the moment, we are not out there looking for capital. We are here really to get the name out and look for buyers in our stock.
Our stock has appreciated about 71%, 72% since December of this year. At its height this year, I think it was about 182% improvement, I guess, over the December 31st stock price. Our stock trades at about 1.9 to 2 times forward revenue. The market as a whole, if you look at the 10-year mean for companies like ours, trade at about 4.5-ish times forward revenue. So we are, from that perspective, undervalued. Yes, Carl.
Do you have a view on how quickly you can capture the VA market?
The VA, it is a very fragmented industry. Everyone thinks it is the VA, but it is not. It is really 170 different customers. Within that VA, there is really 1,300 locations you have to sell. So you actually do have to show up.
I think over the course of the next two years, we will have a significant dent in the VA, not just through our legacy product of gammaCore, but also this new product, NeuroMetrix, the Quell Fibromyalgia product as well. Jeff.
You talk about CIPN. I am assuming it is the vagus nerve stimulation, not the Quell device?
It is the Quell device.
It is the Quell device.
It's the Quell device. That's right.
How about therapy? How many minutes? What time of day do you anticipate it?
Yeah. Right now the protocol is really to utilize it similar to how we'd use it for our fibromyalgia product. You would use it sort of as needed preventatively. So over the course of the day, throughout the bouts of the day. That's all I can say for now. But the product itself will be, assuming it gets approved, will be the only device or pharmaceutical that is approved specifically for the CIPN indication. Again, CIPN affects 50% of people that have chemotherapy. So in the United States, that would be like, there's about 700,000 people in a given year, roughly 500,000 to 700,000 that would have CIPN. Within the VA, that number's probably about, I don't know, 15,000 to 20,000 a year in terms of the addressable market. Any other questions? No? All right, well, for those of you listening, thank you. ECOR, electroCore. Thank you.