ECOR 10-K & 10-Q changes, risk factors and insider trading

Our operations have consumed substantial amounts of cash since inception. We believe that our growth will depend, in part, on our ability to fund our commercial efforts for our nVNSbioelectronic platform technology,technologies, including opportunistically pursuing research and development activities for additional indications for our gammaCore therapy,and Quell therapies, as well as our ability to invest in programs to commercialize our general wellness and human performance products. If our revenue continues to grow, it is likely we will have increased working capital needs in connection with increased inventory purchases and accounts receivable. Our ability to collect our accounts receivable on a timely basis is dependent on the intent and ability of our customers to pay on a timely basis. There is no assurance that we will have sufficient cash flow and liquidity to fund our planned activities. As a result, we may need to seek additional funds in the future or curtail or forgo some or all of such activities. If we seek to and are unable to raise funds on favorable terms, or at all, we may not be able to support our commercialization efforts or increase our research and development activities, and the growth of our business may be negatively impacted. As a result, we may be unable to compete effectively. Changes, including those relating to the payor and competitive landscape, our commercialization strategy, our development activities, our government contracting mechanisms, and regulatory matters, may occur beyond our control that would cause us to consume our available capital more quickly. Our future capital requirements will depend on many factors, including:

To finance our activities, we may seek funds through borrowings or through additional rounds of financing, including public or private equity or debt offerings and collaborative arrangements with corporate partners. We may be unable to raise funds on favorable terms, if at all. On November 29, 2024, we entered into an At The Market Offering Agreement (the "“Sales Agreement"”) with H.C. Wainwright & Co., LLC ("“Wainwright"”) under which we may offer and sell shares of our common stock from time to time having an aggregate offering price of up to $20,000,000. Our stock price, market capitalization trading volume, and other macroeconomic factors may affect our ability to raise funds and the terms on which we will be able to raise funds. Our failure to obtain additional necessary financing could impair our ability to conduct our operations, and any such failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to (i) pursue our business plans and strategies and (ii) maintain our listing on the Nasdaq Stock Market.

We recently launchedbegan newselling cashthe payQuell initiatives, including our gConcierge and gCDirect programs, as well as our direct-to-consumer business channelplatform and patients, providers or consumers may be slow to adopt these programs or their pricing which could adversely impact our business and financial results.

We recently currentlybegan haveselling athe cash-payQuell businessFibromyalgia channel for our prescription gConcierge and gCDirect programs and direct-to-consumer business channeldevices through our ecommercesales websites.organization. We intend to expand our prescription device business through internal and external sales representatives and relaunch the over-the-counter Quell OTC product in the direct-to-consumer business channel by continuing to increase our advertising and promotional activities in 2025.2026. This will require significant investment and expansion of our sales and marketing capabilities and further development by us relating to this business channel. We have limited experience with scaling and commercializing athe direct-to-consumerQuell cash-pay business channelplatform in the United States and abroad, States, which may impact our ability to rely on this channel as a positive source of revenue. If we are unsuccessful in executing our commercialization efforts in our prescription sales, or fail to launch, or are unsuccessful in commercialization efforts for ,Quell OTC product in the direct-to consumer business channelchannel, andwe domay not achieve the sales levels that we reasonably anticipate to materializematerializing in light of current planning and forecasting, weand willmay be unable to recover the investments described above. Additionally, there is a risk that potentially lower pricing of our therapytherapies in the direct-to-consumer cash-pay business channel could lead to lower pricing and reimbursement in our legacy business channels and, therefore, this risk could have an adverse impact on our financial position and results of operations as well as heighten our need to obtain additional financial capital to support our business projects.

If third-party payors do not provide adequate coverage and reimbursement for the use of gammaCore,our medical devices, it may affect our ability to generate significant revenues.

Some of our success in marketing and commercializing gammaCoreour medical devices depends, and will continue to depend, on whether U.S. and international government health administrative authorities, private health insurers, and other payor organizations provide adequate coverage and reimbursement for the cost of our products. Many third-party payors do not currently cover nVNSnon-invasive forbioelectronic anytherapies indicationsor othercover thannon-proprietary bioelectronic epilepsytherapies becauseat prices that are unacceptable to us as they have determined all other nVNSthese modalities to be non-differentiated or investigational or experimental. If physicians or insurers do not find our clinical data compelling or wish to wait for additional studies, they may choose not to use or provide coverage and reimbursement for gammaCore.our medical devices. We cannot provide assurance that data we or others may generate in the future will be consistent with data observed in our existing clinical studies, and we cannot provide similar assurance that our current or future published clinical evidence will be sufficient to obtain adequate coverage and reimbursement for gammaCore.our medical devices. Moreover, if we cannot obtain adequate coverage for and reimbursement of the cost of gammaCore,our medical devices, we cannot provide assurance that patients will be willing to incur the full cost of our prescription gammaCore therapy.therapies. Access to adequate coverage and reimbursement by third-party payors for our prescription gammaCore therapytherapies or the willingness of patients to bear the entire cost of our therapy is essential in the acceptance of our gammaCoretherapies by physicians, patients, and other customers for our therapy.

In most markets, there are private insurance systems and government-managed systems. If sufficient and timely coverage and reimbursement are not available for our current or future gammaCoreprescription products,medical devices, or if reimbursement rates change, in either the United States or internationally, the demand for our gammaCoremedical productdevices and our revenues would be adversely affected.

We have a limited history commercializing our nVNSQuell platform technology,in includingthe throughUnited direct-to-consumerStates channels,for which market acceptance and commercial success is are uncertain.

We have limited experience engaging in direct-to-consumer commercial activities and limited established relationships with marketing agencies, analytic platforms, and social media following, all of which are becoming increasingly important to direct-to-consumer initiatives. We may be unable to gain broader market acceptance for our nVNSQuell platform technology in our sales channels and markets, including direct-to-consumer channels in the United States or abroad, for a number of reasons, including:

As a small company with a limited history of selling our consumer products including our general wellness and human performance products, we have limited experience engaging in commercial activities and limited established relationships and experience with direct-to-consumer channels and third-party suppliers on whom we depend for the manufacture of our product components. In addition, as a general matter, we may fail to adapt our existing or future technology to patient and customer requirements or emerging treatment standards in our relevant geographic and product markets. New industry standards for the development, manufacture, and marketing of medical devices and general wellness products may evolve in separate ways, and we may not be able to conform to the changes, meet new standards in a timely fashion, or maintain a competitive position in our target marketplace. Moreover, if we face material delays in introducing our products and new technology, we may fail to attract new customers in part due to diminished brand awareness and ineffective implementation of marketing and promotion strategy. Specifically, we may be unable to successfully commercialize our consumer products including general wellness and human performance products in the United States for a number of reasons, including:

We recently launched our next generation app-enabledprescription consumergammaCore wellness productdevice under the brand TruvagagammaCore Emerald, and there can be no assurance that the new productdevice will continue to be well received or adopted, which may impact our financial results.

Our next generation app-enabled consumer wellness productproducts may require modifications and improvements, which may cause added expense and negatively impact our financial results.

If our next generation app-enabled consumerproducts wellness product isare not well received, we may need to make modifications or improvements including software updates, which may require additional research and development expense, or stop selling the new deviceproducts all together which would negatively impact our financial results. Undiscovered vulnerabilities in our app-enabled wellness productproducts could expose us or consumers to hackers or other unscrupulous third parties who develop and deploy viruses and other malicious software programs that could attack our products. Actual or perceived security vulnerabilities in our products could harm our reputation and lead some customers to return products, to reduce or delay future purchases, or use competing products. In addition, to the extent a competitor were to develop app-software that competes with ours, customers may choose not to purchase our wellness product.

We generate sales of TAC-STIM branded products to active-duty military and accordingly, military budgetary cuts or government shutdowns or strikes could negatively impact our financial results.

We recently launched our TAC-STIM branded products for human performance within the active-duty military channel. Funding for purchases of TAC-STIM product is subject to governmentalgovernment budgetary decisions and any spending cuts or government policies may negatively impact the timing or amounts of sales to these customers, which could result in lost sales and harm our business and operation results.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. Factors such as geopolitical events (including the ongoing wars in Iran, Ukraine and Israel and the risk of increased tensions between China and Taiwan), inflationary pressures, public health crises, and U.S. election cycles, and changes in government administration and policies have caused extreme volatility and disruptions in the capital and credit markets in recent years. Uncertainty or unfavorable global economic conditions could result in a variety of impacts to our business, including weakening demand for our Inspire system,products, and adversely impacting our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy has strained in the past and may in the future strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services. Further, the Trump administration has proposed or enacted tariffs and substantial changes to trade policies, which could adversely affect our business. For example, the Trump administration has imposed tariffs on certain foreign products, including most recently from Canada, Mexico and China, that in the past have resulted in and may result in future retaliatory tariffs on U.S. goods and products. Additionally, on September 25, 2025, the current U.S. administration announced a 100% tariff on brand-name or patented drugs unless pharmaceutical companies expand their manufacturing operations in the U.S. Although the pharmaceutical tariff is currently on hold, this could have a material adverse effect on our supply chain and business prospects as well as the larger biopharmaceutical industry. While certain tariffs have subsequently been suspended, modified or temporarily reduced, we cannot predict the results of the U.S. government’s trade negotiations or the outcome of ongoing legal challenges to specific tariff policies. We cannot predict whether these policies will continue, or if new policies will be enacted, or the impact, if any, that any policy changes could have on our business. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the economic climate and financial market conditions could adversely affect our business. There is also uncertainty surrounding potential changes to the healthcare regulatory environment in the United States, and it is not possible to predict how these changes may be implemented, and the ultimate effects of such changes on our business. In addition, the U.S. federal government and other governments may reduce funding for health care or other programs or make changes that adversely affect the number of persons eligible for certain programs, the services provided to enrollees in such programs and premiums we can charge. The levels of U.S. federal government spending are difficult to predict and are subject to significant risk. Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally. For example, on January 20, 2025, President Trump established by executive order the U.S. DOGE Service Temporary Organization ("DOGE") to reform federal government processes and reduce expenditures, and on February 5, 2025, the Centers for Medicare & Medicaid Services, or CMS, announced that it is collaborating with DOGE to determine where there may be opportunities for more effective and efficient use of resources. Further, there are reports that the administration is exploring and implementing policies which may put limits on, or freeze, credit card spending by government employees on behalf of government agencies, which could adversely affect our business with the VA. Additionally, the Trump administration took several Executive Actions, including the issuance of a number of Executive Orders, that imposed significant burdens on, or otherwise materially delayed, the FDA’s ability to engage in routine oversight activities, such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications. It is difficult to predict whether or how these orders will be rescinded and replaced under the current or future administrations.business.

Implementation of our growth strategy for our gammaCore, general wellness and human performance products may require greater overall planned capital expenditures, and we cannot guarantee that any such increased expenditures will bring forth corresponding, offsetting revenue growth. Because we have a relatively limited history operating our business at its current and evolving scale, it is difficult for us to evaluate our present and future business prospects, including our ability to plan for, and model, future growth scenarios. Our limited operating experience at this scale, combined with the rapidly evolving customer demand and other market structure properties of the health and general wellness geographic and product markets in which we operate and other economic factors beyond our control, reduces our ability to accurately forecast quarterly or annual revenue. In particular, our ability to accurately forecast customer demand could be affected by myriad factors, including, without limitation, changes in customer demand levels for our products, changes in demand levels for the products of our competitors, the relative pace of acceptance of personalized health and general wellness recommendations, unanticipated weakening of various macroeconomic conditions, and capricious shifts in consumer confidence in future macroeconomic stability and/or the public capital markets. Failure to manage our future growth plans effectively could have an adverse effect on our financial condition and operating results.

We launched new have cash pay initiatives for our Truvaga consumer productproducts, Quell OTC refills, and prescription gammaCore therapy, including our ecommerce websites in both the United States and United Kingdom. Online sales are subject to a number of risks. System interruptions or delays could cause potential patients to fail to purchase our products, harming our brands. Operating our direct-to-consumer ecommerce business depends on our ability to maintain the efficient and uninterrupted administration of online prescription generation, order-taking, and fulfillment activities. Our ecommerce operations subject us to certain risks that could have an adverse effect on our operating results, including risks related to the computer systems that operate our website and related support systems, such as system failures, viruses, denial of service attacks, computer hackers, data privacy breaches, and other disruptions. If we are unable to continually add software and hardware, effectively upgrade our systems and network infrastructure, and take other steps to improve the efficiency and efficacy of our systems, system interruptions or delays could occur that would adversely affect our operating results.

We have experienced significant net losses, and we may continue to incur losses for the foreseeable future while we operate our sales and marketing infrastructure, endeavor to increase acceptance of our prescriptionbioelectronic gammaCore therapy and develop our general wellness and human performance product linetechnologies in relevant markets, fund our various research and development activities, and obtain regulatory clearance or approval for other products or indications in the United States and internationally. We have never been profitable and have incurred net losses in each year since our inception.

We incurred net losses of $11.9$14.0 million and $18.8$11.9 million for the yearyears ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024, 2025, our accumulated deficit was $177.1$191.1 million. Our prior losses, combined with potential future losses, and may continue to have for the foreseeable future, an adverse effect on our stockholders’ deficit and working capital.

To become and remain profitable, we must continue to grow our nVNSbioelectronic platform technologytechnologies and identify promising areas of adoption with significant potential in terms of marketability, brand awareness, and product distinguishability, among other business considerations. This will require us to be successful in a range of challenging activities, which may include obtaining adequate coverage and reimbursement from payors; marketing and selling any current and future product candidates for which we may obtain appropriate marketing clearance, approval or authorization; developing commercial-scale manufacturing processes; managing various risks associated with the design, manufacture, marketing, and sale of human performance, general wellness product offerings, including compliance risk stemming from inadequate monitoring and analysis of applicable FDA and other relevant guidance as well as applicable consumer protection laws, rules, and regulations, ineffective initial and periodic assessment of claims and intended uses of such offerings, and inadequate government affairs, regulatory change management, or other corporate compliance functions that typically identify and remediate nonconformance with administrative law requirements, whether U.S. federal, state, or otherwise, and execute regulatory compliance processes more broadly; completing future clinical trials of gammaCoreprescription devices for additional therapeutic indications; obtaining additional marketing clearance, approval, or authorization from applicable regulatory authorities; militating against risk in, and enhancing the measures of cost efficiency in, our manufacturing; satisfying any post-marketing requirements; and developing the marketing and promotional expertise necessary to succeed in an integrative, well-funded direct-to-consumer approach through the sale of our general wellness and human performanceconsumer product offerings. Because of the numerous risks and uncertainties associated with our commercialization efforts as well as our research and clinical development activities, uncertainlyuncertainty remains around the timing to achieve or maintain profitability. We intend to continue to make targeted investments in building our U.S. and UKU.K. commercial infrastructure as we commercialize our nVNSbioelectronic platform technology.technologies.

If we fail to become profitable or are unable to sustain profitability, then we may be unable to continue our operations at planned levels and may be forced to further reduce, or ultimately terminate, our operations. As of December 31, 2024,2025, we had cash, cash equivalents, restricted cash equivalents and marketable securities of $12.2$11.6 million. There can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and ultimately and potentially cease operations. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development and marketing efforts, and expand our business or continue our operations. Accordingly, a decline in the market value of our company could cause you to lose all or part of your investment.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, bank failures, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates and uncertainty about economic stability. For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the global capital markets. Similarly, the current Russia-Ukraine war, and other conflicts including military activities in the Red Sea and Persian Gulf as well as those relating to the Gaza Strip and Israel,Gulf, and the results of the recent elections in the United States may exacerbate volatility in the global capital markets or disrupt the global supply chain and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Inflation can adversely affect us by increasing our costs, including personnel costs. Any significant increases in inflation and related increase in interest rates could have a material adverse effect on our business, results of operations and financial condition.

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

In addition to our pending transaction to potentially acquire NURO, we We may in the future explore potential acquisitions of companies and technologies, strategic investments, or alliances to strengthen our business. Acquisitions involve numerous risks, any of which could harm our business, including:

We have incurred substantial legal, accounting, financial advisory and other acquisition-related costs, and our management has devoted considerable time and effort in connection with our acquisition of NURO. If With the acquisition of NURO is not completed, we willhave bear certain feesincurred and expenses associated with the acquisition without realizing the benefits of the acquisition. If the acquisition of NURO is completed, we expect to continue to incur substantialadditional expenses in connection with integrating the business, operations, network, systems, technologies, policies and procedures of NURO. The fees and expenses may be significant and could have an adverse impact on our business, financial condition, and operating results.

The acquisition of NURO may not perform as expected. If we are unsuccessful at, among other things, integrating NURO into our operations or managing the NURO business, our revenues and margins could be adversely affected, and our business could suffer. See also “Risk Related to our Financial Position, Operating Results and Need for Additional Capital - Future acquisitions, including the recently announced acquisition of NURO, strategic investments, or alliances could disrupt our business and harm our business, financial condition, and operating results.”

Additionally, NURO is, and following the closing of the acquisition, the The Company may be,is subject to the laws and regulations applicable to NURO, including a settlement order between NURO and the FTC entered into on March 4, 2020, which enjoins NURO from engaging in deceptive acts or practices in violation of the FTC Act in the manufacturing, labeling, advertising, marketing, distribution and sale of certain of NURO’s stimulation devices. Any violation of such laws and regulations, including the settlement, could have an adverse impact on our business, financial condition, and operating results.

Our commercialization strategy of gammaCoreprescription devices may expose us to increased billing, cash application, and credit risks.

Our commercialization strategy may involve funding for our prescription gammaCore therapydevices through medical benefit coverage, the majority of which is provided by private insurers, as well as reimbursement by government agencies. Such claims are generally for very high-priced medicines, and collection of payments from insurance companies, patients, and other payors generally takes substantially longer than for those claims administered through a pharmacy benefit manager. Because of the high cost of these claims, complex billing requirements, and the nature of the medical benefit coverage determination process, these accounts receivable are characterized by higher risk in collecting the full amounts due and applying the associated payments. In addition, possible sales in our EUA business channel to hospitals may involve higher credit risks than sales to other payors.

Revenues from the sale of our prescription gammaCore therapydevices partially depend on the continued availability of reimbursement by government and private insurance plans. The government’s Medicare regulations are complex, and, as a result, the billing and collection process is time-consuming and typically involves the submission of claims to multiple payors whose payment of claims may be contingent upon the payment of another payor. Because of the coordination with multiple payors, and the complexity in determining reimbursable amounts, these accounts receivable have higher risk in collecting the full amounts due and applying the associated payments.

Our prescription gammaCore therapydevice commercialization strategy may require premium payments from members for the ongoing benefit as well as amounts due from insurers and government-sponsored or national health insurance programs. As a result of the demographics of the consumers covered under these programs, and the complexity of the calculations as well as the potential magnitude and timing of settlement for amounts due from insurers and government-sponsored or national health insurance programs, these accounts receivable may be subject to billing and realization risk.

A significant portion of our sales will be made to the VA pursuant to our FSS contract of via open market purchases. The U.S. federal government and other governments may reduce funding for health care or other programs or make changes that adversely affect the number of persons eligible for certain programs, the services provided to enrollees in such programs and premiums we can charge. The levels of U.S. federal government spending are difficult to predict and are subject to significant risk. Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally. For example, on January 20, 2025, President Trump established by executive order DOGE to reform federal government processes and reduce expenditures, and on February 5, 2025, the Centers for Medicare & Medicaid Services, or CMS, announced that it is collaborating with DOGE to determine where there may be opportunities for more effective and efficient use of resources. Further, there are reports that the administration is exploring and implementing policies which may put limits on, or freeze, credit card spending by government employees on behalf of government agencies, which could adversely affect our business with the VA. Any reduction in government spending or limitations put in place through government processes to reduce expenditures could have an adverse effect on the results of operations and financial condition.

Furthermore, we expect a portion of our 20252026 sales will be made pursuant to the distribution agreement with Lovell Government Services (“Lovell”) and their contract vehicles. As a result of this relationship an increasing portion of gammaCoremedical therapydevice sales in the government channel will be processed through Lovell and payment made to us by Lovell according to the terms of the Lovell distribution agreement. Additionally, we may be subject to increased credit risk associated with state and local government agencies experiencing increased fiscal challenges. As a result of the aforementioned risks, our commercialization strategy, even if successful, may involve the incurrence of bad debt expenses potentially impacting our results of operations and liquidity. Any payment delays or disputes in our relationship with Lovell could have an adverse effect on our results of operations and financial condition.

We must demonstrate to patients, physicians, and third-party payors the medical and economic benefits of our prescription gammaCore therapytherapies compared to those of our competitors or other available therapies, and such comparisons may not be realizable.

Our business capabilities include product development, regulatory affairs and compliance, sales and marketing, product testing, electromechanical assembly, fulfillment, and customer support. We derivegenerates revenues from the sale of prescription medical devices and non-prescription wellness products in the United States and select overseas markets. We have two principal product categories:

Our goal is to be a leader in non-invasive neuromodulationbioelectronic totechnologies deliverdelivering better health. To achieve this, we offer multiple propositions:

We face a variety of challenges and risks that we will need to address and manage as we pursue our strategies, including our ability to develop and retain an effective sales force, achieve market acceptance of our gammaCore medical devicedevices among clinicians, patients, and third-party payers, expand the use of our gammaCorebioelectronic medical devicetechnology to additional therapeutic indications, and to develop our nascent wellness and human performance business including the plannedcontinued launchcommercialization of Truvaga Plus, our next generation app-enabled device under the Truvaga brand.brand, and direct-to-consumer Quell OTC, a non-prescription product for lower extremity pain.

On January July 24, 2025, we filed aour Form S-3 registration statement (withFile anNo. amendment filed on January 31, 2025333-284477), or the 2025 Shelf Registration Statement, withwas declared effective by the SEC,SEC. forThe 2025 Shelf Registration Statement relates to the potential offering and issuance from time to time of common stock, preferred stock, warrants, rights, debt securities and units, up to an aggregate amount of $100$100.0 million. The 2025proposed Shelf Registration Statement is currently under review by the SEC. The proposed maximum offering price per unit and the proposed maximum aggregate offering price per class of security in any future offering under the 2025 Shelf Registration Statement will be determined from time to time by us in connection with the issuance by us of the securities registered under the 2025 Shelf Registration Statement. As of Decemberthe 31,date 2024,of this Annual Report, we have approximately $46.2$100.0 million remaining for potential issuance under the 2022 2025 Shelf Registration Statement (including $19.8 million under the Sales Agreement (as defined below)). As of the date of this Annual Report on Form 10-K,, the aggregate market value of our securities held by non-affiliates may be below $75 million, and until such time as the aggregate market value of our securities held by non-affiliates equals or exceeds $75 million, the aggregate maximum offering price of all securities issued by us in any given 12-calendar month period pursuant the 2025 Shelf Registration Statement may not exceed one-third of the aggregate market value of our securities held by non-affiliates, and thus may be limited. If we raise additional funds by issuing equity or debt securities, either through the sale of securities pursuant to a registration statement or by other means, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. The 2022 Shelf Registration Statement expires on the earlier of July 24, 2025 and the effectiveness under the Securities Act of the 2025 Registration Statement.

Net sales for the year ended December 31, 20242025 increased 57%27% to $32.0 million as compared to the year ended December 31, 2023.2024. The increase of $9.2$6.9 million is primarily due to an increase in net sales inof prescription (Rx) -gammaCore Departmentand Quell Fibromyalgia products sold to the VA and revenue from the sales of Veteranour Affairsnonprescription andgeneral wellness Truvaga channels.products. We expect that the majority of 20252026 fiscal year revenue will continue to come from the U.S. Department of Veterans Affairs. See above Overview for discussion regarding the Federal Supply Schedule.

The following table sets forth our channel net sales by channel:

Gross profit increased $8.2$6.4 million to $27.8 million for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase in gross profit wasis primarilyattributable driven byto the increase inincreased net sales. Gross margin was 85%sales and 83%favorable forproduct the years ended December 31, 2024 and 2023, respectively.mix.

Research and development expense of $2.4$2.7 million for the year ended December 31, 20242025, decreasedincreased by $3.0$0.4 million compared to the prior year. This decrease increase was primarily due to aan significant reductionincrease in investmentsdevelopment costs associated with theour developmentgammaCore ofEmerald Truvagaand Plus.next generation mobile application.

(Provision) Benefit from Income Taxes

The Company may be eligible, from time to time, to receive cash from the sale of our net operating losses under New Jersey'sJersey’s Department of the Treasury - Division of Taxation NOL Transfer Program. During the years ended December 31, 20242025 and 2023,2024, we received net cash payments of $0.1 million$48,000 and $0.2$0.1 million from the sale of our New Jersey state net operating losses, respectively.

At December 31, 2024,2025, our cash, cash equivalents, restricted cash and marketable securities was $12.2$11.6 million compared to $10.6$12.2 million at December 31, 2023. 2024.

Net cash used in operating activities was $6.9$8.2 million and $14.7$6.9 million for the years ended December 31, 20242025 and 2023,2024, respectively. The decrease increase of $7.7$1.3 million is primarily due to the increase in net sales and resulting decrease in our net lossloss, frompartially operationsoffset asby adjustedhigher foraccounts non-cash expense items.payable.

Net cash usedprovided inby investing activities was $8.5$3.9 million and $0.2$8.5 million for the years ended December 31, 20242025 and 2023,2024, respectively. During the year ended December 31, 2025, cash used in investing activities was related to the proceeds from the sale of marketable securities. During the year ended December 31, 2024, cash used in investing activities was related to the purchase of marketable securities. During the year ended December 31, 2023, cash used in investing activities was related to equipment purchases.

OurThe 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 ourits products. WeNotwithstanding believethe ourexpected cash flow from operations and expected access to capital from existing and/or future debt and equity sources, the Company’s currently forecasted cash equivalentsis willless enablethan usthe requirements to fund ourits operating expenses, working capital,expenses and capital expenditure requirements, as currently planned, throughfor at least the next 12 months from the date the accompanying consolidated financial statements are issued. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. There areremain significant risks and uncertainties asregarding tothe Company’s ourbusiness, abilityfinancial tocondition achieveand theseresults operatingof results.operations. Due to these risks and uncertainties, there can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and, ultimately, potentially cease operations. The accompanying consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

You should carefully consider the risk factors included in Item 1A. of the Annual Report, the risk factors included in additionany quarterly report filed subsequent to the followingAnnual risk factors,Report, and the other information in this Quarterly Report, including the section of this Quarterly Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, our financial statements and related notes. If any of the events described in the Annual Report, in any quarterly report filed subsequent to the followingAnnual risk factors Report, and the risks described elsewhere in this Quarterly Report occur, our business, operating results and financial condition could be seriously harmed. This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described in the Annual Report, in belowany quarterly report filed subsequent to the Annual Report, and elsewhere in this Quarterly Report.

Our two largest customers by revenue are the United States Department of Veterans Affairs and United States Department of Defense,Affairs, or VA, and the United Kingdom National Health Service Service, or NHS, both utilizing prescription products under qualifying agreements.

The United States Department of Veteran Affairs comprised 74.8%75.8% and 75.3% of our revenue during the three and six months ended MarchJune 31,30, 2026.2026, respectively. Our prescription gammaCore and Quell Fibromyalgia devices are also made available to the government channel through our relationship with Lovell and its qualifying FSS, GSA Advantage (GSA), the VA Distribution and Pricing Agreement (DAPA), and Defense Logistics Agency’s ECAT system procurement portals through the Lovell contract vehicles (ECAT). The majority of our firstsecond quarter 2026 sales were made pursuant to our qualifying Federal Supply Schedule, or FSS, contract which has an expiry date of June 14, 2030, as well as open market sales to individual facilities within the government channels. Our prescription gammaCorechannels, and our relationship with Lovell. During the remainder of Quell2026, Fibromyalgiawe devices are also made availableintend to generate the governmentmajority of our sales in the VA channel through our relationshipagreement with Lovell and its qualifying FSS, GSA Advantage (GSA), the VA Distribution and Pricing Agreement (DAPA), and Defense Logistics Agency’s ECAT system procurement portals through the Lovell contract vehicles (ECAT).Lovell.

Demand for prescription devices in the U.S. is driven by clinical data and our increased presence in the field. Our sales efforts are primarily in the government channel broadly, and specifically to our largest customer, the VA, pursuant to our FSS contract and/or through our relationship with Lovell and its qualifying FSS, GSA, DAPA, and ECAT contracts. Our sales force is comprised of an internal sales team of territory business managers who manageand outside commission only sales agents and sub reps. In addition, we have a small team of dedicated resources seeking to accelerate adoption in managed care systems. Sales to the NHS in the United Kingdom made under the U.K. MedTech Funding Mandate, or MTFM, for cluster headache (CH) comprised 4.0% and 3.9% of our revenue during the three and six months ended June 30, 2026, respectively. We plan on continuing to use this program during the remainder of 2026, and potentially in years to come.

Truvaga and TAC-STIM are intended for general wellness in compliance with the FDA guidance document entitled “General Wellness: Policy for Low-Risk Devices; Guidance for Industry and FDA Staff, issued on September 27, 2019” and as updated in January 2026. Truvaga and and TAC-STIM handsets are not intended to diagnose, treat, cure, or prevent any disease or medical condition.

Quell OTC2.0 is a wearable neuromodulation technology FDA cleared for Over the Counter (OTC) sales direct-to-consumer for chronic lower extremity pain. Quell OTC2.0 is no longer commercially available; however, replacement electrodes continue to be sold to existing Quell OTC2.0 customers. Although we may choose to relaunch the Quell OTC2.0 product in the direct-to-consumer business channel in the future, there can be no assurance that we will do so successfully, or at all.

We face a variety of challenges and risks that we will need to address and manage as we pursue our strategies, including our ability to develop and retain an effective sales force, achieve market acceptance of our medical devices among clinicians, patients, and third-party payers, expand the use of our bioelectronic technology tofor additional therapeutic indications, and to develop our nascent wellness and human performance business including the continued commercialization of Truvaga Plus, our app-enabled device under the Truvaga brand, and the possible relaunch of our direct-to-consumer Quell OTC, a non-prescription product for lower extremity pain.2.0.

On July 24, 2025, our Form S-3 registration statement (File No. 333-284477), or the 2025 Shelf Registration Statement, was declared effective by the SEC. The 2025 Shelf Registration Statement relates to the potential offering and issuance from time to time of common stock, preferred stock, warrants, rights, debt securities and units, up to an aggregate amount of $100.0 million. The proposed maximum offering price per unit and the proposed maximum aggregate offering price per class of security in any future offering under the 2025 Shelf Registration Statement will be determined from time to time by us in connection with the issuance by us of the securities registered under the 2025 Shelf Registration Statement. As of MayJuly 1,31, 2026, we have $99.0$95.9 million remaining for potential issuance under the 2025 Shelf Registration Statement (including $18.8$15.7 million under the Sales Agreement (as defined below)). As of the date of this Quarterly Report, the aggregate market value of our securities held by non-affiliates is below $75.0 million, and until such time as the aggregate market value of our securities held by non-affiliates equals or exceeds $75.0 million, the aggregate maximum offering price of all securities deemed to be issued by us in any given 12-calendar month period pursuant to the 2025 Shelf Registration Statement may not exceed one-third of the aggregate market value of our securities held by non-affiliates, and thus may be limited. If we raise additional funds by issuing equity or debt securities, either through the sale of securities pursuant to a registration statement or by other means, our existing stockholders may may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders.

Comparison of the three months ended MarchJune 31,30, 2026 and June 30, 2025

The following table summarizes our results of operations for the three months ended MarchJune 31,30, 2026 and 2025 with the changes in those items in dollars.

Net sales for the three months ended MarchJune 31,30, 2026 increased 43%28% to $9.6$9.5 million as compared to the three months ended MarchJune 31,30, 2025. The increase of $2.9$2.1 million is primarily due to an increase in net sales of Quell Fibromyalgia products and prescription (Rx) gammaCore to the VA, sales of Quell FibromyalgiagammaCore, products, which were acquired from NURO in May 2025 and are also sold to the VA,VA through our United States – Rx channel, and revenue from the sales of our nonprescription general wellness wellness Truvaga products. We acquired the Quell Fibromyalgia product from NURO in May 2025. We expect that the majority of 2026 fiscal year revenue will continue to come from sales of our Rx products to the U.S. Department of Veterans Affairs.VA.

Gross profit increased $2.7by $1.7 million to $8.4$8.2 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase in gross profit is primarily attributable to the increased net salessales. andGross favorablemargin productdecreased mix.to 86.5% for the three months ended June 30, 2026, compared to 87.3% for the three months ended June 30, 2025. The decrease in gross margin was primarily due to an increase in our inventory reserve.

Research and development expense of $0.7$0.8 million for the three months ended MarchJune 31,30, 2026, increased by $98,000$307,000 compared to the prior year. This increase was primarily due to increased studies and grants.grants, higher stock-based compensation and initial costs to develop enhancements to our Truvaga mobile application.

Selling, general and administrative expense ofwas $12.9$10.1 million for the three months ended MarchJune 31,30, 2026 which increased by $4.1$0.7 million compared to the previous year. Sales and marketing increased $1.8$1.4 million from the prior year. The increase in sales and marketing was primarily driven by $1.6$0.9 million of variable selling expenses, which contributed to a $2.9$2.1 million increase in sales. General and administrative expense increased $2.3decreased $0.7 million from the prior year. ThisThe increasedecrease was primarily drivenattributable by $1.2 million of severance andto $0.5 million ofin bad stockdebt compensation expense recorded in the three months ended June 30, 2025 (associated with thea formerTAC-STIM CEO’sreceivable) retirement,that $0.2did millionnot recur, as well as a reduction in legalprofessional fees associated within the seniorthree managementmonths changes,ended and $0.3June million30, in legal fees associated with ongoing litigation.2026.

Other (income) expense ofwas $0.3 million for the three months ended MarchJune 31,30, 20262026, increasedan $0.2increase of $0.1 million as compared to the three months ended ended MarchJune 31,30, 2025. The increase was primarily attributable to interest associated with the convertible term debt financing with Avenue. Other expense for the three months ended MarchJune 31,30, 2025 of approximately $0.1$0.2 million consisted primarily of non-recurring acquisition expenses.

The Company may be eligible, from time to time, to receive cash from the sale of our net operating losses under New Jersey’s Department of the Treasury - Division of Taxation NOL Transfer Program. During the threesix months ended MarchJune 31,30, 2026 and 2025, we received net cash payments of $321,000 and $48,000 from the sale of our New Jersey state net operating losses, respectively.

At MarchJune 31,30, 2026, our cash, cash equivalents, and marketable securities was $8.8$10.0 million compared to $11.6 million at December 31, 2025.

Net cash used in operating activities was $3.0$6.5 million and $4.4$5.0 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The The decreaseincrease of $1.4$1.5 million in operating cash used is primarily due to investments in higher inventory levels and the timing ofin payment of accrued operating expenses partially offset by an increase in our net loss.expenses.

Net cash provided by investing activities was $0.6$3.0 million and $4.5$4.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. During the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, cash used in investing activities was related to the proceeds from the sale sale of marketable securities.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 was $0.2$5.0 million which was primarily attributable to $3.9 million of net proceeds from the sale of ATM Shares pursuant to the Sales Agreement and the exercise of stockwarrants warrants.and options in the amount of $0.8 million and $0.3 million, respectively. During the threesix months ended MarchJune 31,30, 2025, net cash provided by financing activities was $0.2 million which was attributable to utilizationsale of ourATM at-the-market facilityShares pursuant to the Sales Agreement.

We have experienced significant net losses, and we expect to continue to incur net losses for the near future as we work to increase market acceptance of our products. We have never been profitable and we have incurred net losses and negative cash used in operations in each year since our inception. We incurred net losses of $5.3$8.3 million and $3.9$7.5 million, and used cash in our operations of $3.0$6.5 million and $4.4$5.0 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

During the remainder of 2026, we intend to continue to make targeted investments in salessales, marketing, and marketingresearch and development to continue driving commercial activities. We have historically funded our operations from the sale of our common stock and debt financing,financing and may continue to do so through utilization of the at-the-market facility pursuant to the Sales Agreement, or other equity or debt transactions.

Notwithstanding the expected cash flow from operations and expected access to capital from existing and/or future debt and equity sources, the Company’s currently forecasted cash is less than the requirements to fund its operating expensesexpenses, future investments and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the accompanying condensed consolidated financial statements are issued. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. There remain significant risks risks and uncertainties regarding the Company’s business, financial condition and results of operations. Due to these risks and uncertainties, uncertainties, there can be no assurance that we will have sufficient cash flow and liquidity to fund our planned activities, which could force us to significantly reduce or curtail our activities and, ultimately, potentially cease operations. The accompanying condensed consolidated consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.