UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~September 30, 2021~~March 31, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______________ TO ______________

Commission File Number 001-38538

electroCore, Inc.

(Exact name of Registrant as specified in its charter)

Delaware		20-3454976
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 Forge Way, Suite 205, Rockaway, NJ 07866

(Address of principal executive offices, including zip code)

(973) 290-0097

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	ECOR	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~November 1, 2021~~May 3, 2022 the registrant had ~~70,697,680~~70,769,325 shares of common stock outstanding.

	PART I. FINANCIAL INFORMATION	Page Number
	Cautionary Note Regarding Forward-Looking Statements	3
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of ~~September 30, 2021~~March 31, 2022 (unaudited) and December 31, ~~2020~~2021	4
	Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020 (Unaudited)~~(unaudited)	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020 (Unaudited)~~(unaudited)	6
	Condensed Consolidated Statements of Equity for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020 (Unaudited)~~(unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020 (Unaudited)~~(unaudited)	98
	Notes to Condensed Consolidated Financial Statements ~~(Unaudited)~~(unaudited)	109
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2217
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2821
Item 4.	Controls and Procedures	2821
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	2922
Item 1A.	Risk Factors	3122
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3222
Item 3.	Defaults Upon Senior Securities	3222
Item 4.	Mine Safety Disclosures	3222
Item 5.	Other Information	3222
Item 6.	Exhibits	3323
	Signatures	3424

REFERENCES TO ELECTROCORE

In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to the “Company,” “electroCore,” “we,” “us” and “our” refer to electroCore, Inc. a Delaware corporation and its ~~subsidiaries and affiliate.~~subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to them. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, (i) risks and uncertainties related to the impact of the COVID-19 pandemic on general political and economic conditions, including as a result of efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, vaccine mandates, shelter in place orders and third-party business closures and resource allocations, manufacturing and supply chains and patient access to commercial products; our ability to execute our operational and budget plans in light of the COVID-19 pandemic, and (ii) those included in our Form 10-Qs, our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, in our other filings with the U.S. Securities and Exchange Commission or in materials incorporated by reference therein, including the information in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in such filings. Furthermore, any such forward-looking statements in this Quarterly Report speak only as of the date of this report. Except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements.

The electroCore logo, gammaCore and other trademarks of electroCore, Inc. appearing in this Quarterly Report are the property of electroCore, Inc. All other trademarks, service marks and trade names in this Quarterly Report are the property of their respective owners. We have omitted the ® and ™ designations, as applicable, for the trademarks used in this Quarterly Report.

ELECTROCORE, INC., AND SUBSIDIARIES ~~AND AFFILIATE~~

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share data)

~~(Unaudited)~~

	September 30,			December 31,			March 31,			December 31,
	2021			2020			2022			2021
Assets
Current assets:
Cash and cash equivalents	$	37,995,008		$	4,241,937		$	29,882		$	34,689
Marketable securities		1,001,080			18,386,160
Accounts receivable, net		329,778			270,546			364			438
Inventories, net		1,082,325			876,436			1,577			1,361
Prepaid expenses and other current assets		1,476,348			1,288,588			671			1,053
Total current assets		41,884,539			25,063,667			32,494			37,541
Inventories, noncurrent		4,349,009			4,865,181			3,324			3,941
Property and equipment, net		171,028			244,047			122			147
Operating lease right of use assets		539,728			517,257
Operating lease right of use assets, net								605			613
Other assets, net		626,445			828,011			636			591
Total assets	$	47,570,749		$	31,518,163		$	37,181		$	42,833
Liabilities and Equity
Current liabilities:
Accounts payable	$	1,250,534		$	2,078,699		$	2,235		$	1,543
Accrued expenses and other current liabilities		4,429,843			2,965,702			2,384			3,881
Note payable, current		0—			311,354
Current portion of operating lease liabilities		58,482			534,547			64			61
Total current liabilities		5,738,859			5,890,302			4,683			5,485
Noncurrent liabilities:
Operating lease liabilities, noncurrent		715,530			885,333			682			700
Note payable, noncurrent		0—			1,097,946
Total liabilities		6,454,389			7,873,581			5,365			6,185
Commitments and contingencies		0—			0—			0—			0—
Stockholders' equity:
Preferred Stock, par value $0.001 per share; 10,000,000 shares authorized at September 30, 2021 and December 31, 2020; 0 shares issued and outstanding at September 30, 2021 and December 31, 2020		0—			0—
Common Stock, par value $0.001 per share; 500,000,000 shares authorized at September 30, 2021 and December 31, 2020; 70,442,309 shares issued and outstanding at September 30, 2021 and 45,559,765 shares issued and outstanding at December 31, 2020		70,442			45,560
Preferred Stock, par value $0.001 per share; 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; 0 shares issued and outstanding at March 31, 2022 and December 31, 2021								0—			0—
Common Stock, par value $0.001 per share; 500,000,000 shares authorized at March 31, 2022 and December 31, 2021; 70,718,191 shares issued and outstanding at March 31, 2022 and 70,704,123 shares issued and outstanding at December 31, 2021								71			71
Additional paid-in capital		159,796,442			130,205,027			161,549			160,772
Accumulated deficit		(119,261,417	)		(106,990,148	)		(129,790	)		(124,208	)
Accumulated other comprehensive loss		(124,717	)		(251,467	)		(14	)		13
Total stockholders' equity		40,480,750			23,008,972
Noncontrolling interest		635,610			635,610
Total equity		41,116,360			23,644,582			31,816			36,648
Total liabilities and equity	$	47,570,749		$	31,518,163		$	37,181		$	42,833

See accompanying notes to unaudited condensed consolidated financial statements.

ELECTROCORE, INC., AND SUBSIDIARIES ~~AND AFFILIATE~~

Condensed Consolidated Statements of Operations

~~(Unaudited)~~(unaudited)

(in thousands, except per share data)

	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2021			2020			2021			2020			2022			2021
Net sales	$	1,487,093		$	1,080,841		$	3,960,401		$	2,567,567		$	1,899		$	1,204
Cost of goods sold		355,046			347,504			1,093,304			918,605			360			364
Gross profit		1,132,047			733,337			2,867,097			1,648,962			1,539			840
Operating expenses
Research and development		470,275			629,002			1,794,146			3,182,646			934			499
Selling, general and administrative		4,646,815			4,592,936			15,644,324			16,426,991			6,186			5,725
Restructuring and other severance related charges		0—			0—			0—			464,606
Total operating expenses		5,117,090			5,221,938			17,438,470			20,074,243			7,120			6,224
Loss from operations		(3,985,043	)		(4,488,601	)		(14,571,373	)		(18,425,281	)		(5,581	)		(5,384	)
Other (income) expense
Gain on extinguishment of debt		0—			0—			(1,422,214	)		0—
Interest and other income		(3,834	)		(5,719	)		(8,493	)		(80,460	)		(4	)		(3	)
Other expense		3,771			3,522			7,293			13,350			5			3
Total other (income) expense		(63	)		(2,197	)		(1,423,414	)		(67,110	)		1			0—
Loss before income taxes		(3,984,980	)		(4,486,404	)		(13,147,959	)		(18,358,171	)		(5,582	)		(5,384	)
(Provision) benefit from income taxes (see Note 14)		(8,705	)		0—			876,690			1,170,890
(Provision) benefit from income taxes														0—			0—
Net loss	$	(3,993,685	)	$	(4,486,404	)	$	(12,271,269	)	$	(17,187,281	)	$	(5,582	)	$	(5,384	)
Net loss per share of common stock - Basic and Diluted (see Note 12)	$	(0.06	)	$	(0.10	)	$	(0.22	)	$	(0.47	)
Weighted average common shares outstanding - Basic and Diluted (see Note 12)		69,511,498			44,030,685			55,308,381			36,847,548
Net loss per share of common stock - Basic and Diluted (see Note 8)													$	(0.08	)	$	(0.11	)
Weighted average common shares outstanding - Basic and Diluted (see Note 8)														70,672			47,653

See accompanying notes to unaudited condensed consolidated financial statements.

ELECTROCORE, INC., AND SUBSIDIARIES ~~AND AFFILIATE~~

Condensed Consolidated Statements of Equity

(unaudited)

~~(Unaudited)~~(in thousands)

	Common				Additional						Accumulated other			Total electroCore, Inc.								Common				Additional					Accumulated other			Total electroCore, Inc.
	Stock				paid-in			Accumulated			comprehensive			stockholders'			Noncontrolling		Total			Stock				paid-in		Accumulated			comprehensive			stockholders'			Noncontrolling		Total
	Shares		Amount		capital			deficit			income (loss)			equity			interest		equity			Shares		Amount		capital		deficit			income (loss)			equity			interest		equity
Balances as of January 1, 2021		45,559,765	$	45,560	$	130,205,027		$	(106,990,148	)	$	(251,467	)	$	23,008,972		$	635,610	$	23,644,582
Balance, January 1, 2022																							70,704	$	71	$	160,772	$	(124,208	)	$	13		$	36,648		$	0—	$	36,648
Net loss																							—		0—		0—		(5,582	)		0—			(5,582	)		0—		(5,582	)
Other comprehensive loss																							—		0—		0—		0—			(27	)		(27	)		0—		(27	)
Issuance of stock related to employee compensation plans, net of forfeitures																							14		0—		0—		0—			0—			0—			0—		0—
Share based compensation																							—		0—		777		0—			0—			777			0—		777
Balance, March 31, 2022																							70,718	$	71	$	161,549	$	(129,790	)	$	(14	)	$	31,816		$	0—	$	31,816

Balance, January 1, 2021																							45,560	$	45	$	130,205	$	(106,990	)	$	(251	)	$	23,009		$	635	$	23,644
Net loss		—		0—		0—			(5,383,832	)		0—			(5,383,832	)		0—		(5,383,832	)		—		0—		0—		(5,384	)		0—			(5,384	)		0—		(5,384	)
Other comprehensive income		—		0—		0—			0—			144,144			144,144			0—		144,144			—		0—		0—		0—			144			144			0—		144
Issuance of stock (see Note 11)		2,750,000		2,750		6,917,600			0—			0—			6,920,350			0—		6,920,350
Issuance of stock																							2,750		3		6,918		0—			0—			6,921			0—		6,921
Issuance of stock related to employee compensation plans, net of forfeitures		17,599		18		(18	)		0—			0—			0—			0—		0—			18		0—		0—		0—			0—			0—			0—		0—
Settlement of accrued bonus		165,413		165		399,832			0—			0—			399,997			0—		399,997			165		0—		400		0—			0—			400			0—		400
Share based compensation		—		0—		942,183			0—			0—			942,183			0—		942,183			—		0—		942		0—			0—			942			0—		942
Balances as of March 31, 2021		48,492,777	$	48,493	$	138,464,624		$	(112,373,980	)	$	(107,323	)	$	26,031,814		$	635,610	$	26,667,424
Net loss		—		0—		0—			(2,893,752	)		0—			(2,893,752	)		0—		(2,893,752	)
Other comprehensive income		—		0—		0—			0—			4,861			4,861			0—		4,861
Issuance of stock related to employee compensation plans, net of forfeitures		197,647		197		(197	)		0—			0—			0—			0—		0—
Share based compensation		—		0—		837,973			0—			0—			837,973			0—		837,973
Balances as of June 30, 2021		48,690,424	$	48,690	$	139,302,400		$	(115,267,732	)	$	(102,462	)	$	23,980,896		$	635,610	$	24,616,506
Net loss		—		0—		0—			(3,993,685	)		0—			(3,993,685	)		0—		(3,993,685	)
Other comprehensive income		—		0—		0—			0—			(22,255	)		(22,255	)		0—		(22,255	)
Issuance of stock, net of related expenses (see Note 11)		20,700,000		20,700		18,744,182			0—			0—			18,764,882			0—		18,764,882
Issuance of stock to satisfy legal fee obligation (see Note 11)		952,380		952		989,523			0—			0—			990,475			0—		990,475
Issuance of stock related to employee compensation plan, net of forfeitures		99,505		100		(100	)		0—			0—			0—			0—		0—
Share based compensation		—		0—		760,437			0—			0—			760,437			0—		760,437
Balances as of September 30, 2021		70,442,309	$	70,442	$	159,796,442		$	(119,261,417	)	$	(124,717	)	$	40,480,750		$	635,610	$	41,116,360
Balance, March 31, 2021																							48,493	$	48	$	138,465	$	(112,374	)	$	(107	)	$	26,032		$	635	$	26,667

ELECTROCORE, INC., AND SUBSIDIARIES ~~AND AFFILIATE~~

~~Condensed Consolidated Statements of Equity~~

~~(Unaudited)~~

Common

Additional

Accumulated other

Total electroCore, Inc.

Stock

paid-in

Accumulated

comprehensive

stockholders'

Noncontrolling

Total

Shares

Amount

capital

deficit

income (loss)

equity

interest

equity

Balances as of January 1, 2020
29,835,183

$ 29,835

$ 107,752,066

$ (83,479,098 )
$ (41,295 )
$ 24,261,508

$ 635,610

$ 24,897,118
Net loss

—

0—

0—

(7,959,349 )

0—

(7,959,349 )

0—

(7,959,349 )
Other comprehensive income

—

0—

0—

0—

51,148

51,148

0—

51,148
Equity financing commitment fee*

461,676

462

(462 )

0—

0—

0—

0—

0—
Issuance of stock related to employee compensation plans, net of forfeitures

124,568

125

(125 )

0—

0—

0—

0—

0—
Share based compensation

—

0—

744,865

0—

0—

744,865

0—

744,865
Balances as of March 31, 2020
30,421,427

$ 30,422

$ 108,496,344

$ (91,438,447 )
$ 9,853
$ 17,098,172

$ 635,610

$ 17,733,782
Net loss

—

0—

0—

(4,741,528
)

0—

(4,741,528
)

0—

(4,741,528
)
Other comprehensive income

—

0—

0—

0—

(116,396
)

(116,396
)

0—

(116,396
)
Issuance of stock (see Note 11)

8,028,372

8,028

7,823,507

0—

0—

7,831,535

0—

7,831,535

Equity financing commitment fee*

181,273

181

(181
)

0—

0—

0—

0—

0—

Financing fees

—

0—

(167,299 )

0—

0—

(167,299 )

0—

(167,299 )
Issuance of stock related to employee compensation plans, net of forfeitures

184,073

184

(184
)

0—

0—

0—

0—

0—

Share based compensation

—

0—

1,002,758

0—

0—

1,002,758

0—

1,002,758

Balances as of June 30, 2020

38,815,145

$
38,815

$
117,154,945

$
(96,179,975
)

$
(106,543
)

$
20,907,242

$
635,610

$
21,542,852

Net loss

—

0—

0—

(4,486,404
)

0—

(4,486,404
)

0—

(4,486,404
)
Other comprehensive income

—

0—

0—

0—

(83,812
)

(83,812
)

0—

(83,812
)
Issuance of stock (see Note 11)

6,079,676

6,080

11,197,581

0—

0—

11,203,661

0—

11,203,661

Equity financing commitment fee*

49,565

49

(49
)

0—

0—

0—

0—

0—

Financing fees

—

0—

(23,199
)

0—

0—

(23,199
)

0—

(23,199
)
Issuance of stock related to employee compensation plans, net of forfeitures

254,702

255

(255
)

0—

0—

0—

0—

0—

Share based compensation

—

0—

742,928

0—

0—

742,928

0—

742,928

Balances as of September 30, 2020
45,199,088

$
45,199

$
129,071,951

$
(100,666,379
)
$
(190,355
)
$
28,260,416

$
635,610

$
28,896,026

*	~~Reflects commitment shares issued in accordance with the Company's equity facility purchase agreement with Lincoln Park. For additional information see Note~~ 11~~. Lincoln Park Stock Purchase Agreement.~~

~~ELECTROCORE, INC., SUBSIDIARIES AND AFFILIATE~~

Condensed Consolidated Statements of Cash Flows

~~(Unaudited)~~(unaudited)

(in thousands)

	Nine months ended September 30,
	2021			2020			Three months ended March 31,
				(revised)			2022			2021
Cash flows from operating activities:
Net loss	$	(12,271,269	)	$	(17,187,281	)	$	(5,582	)	$	(5,384	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		2,540,593			2,490,551			777			942
Depreciation and amortization		286,448			288,589			106			96
Amortization of marketable securities discount		141,159			23,422			0—			54
Gain on extinguishment of debt		(1,422,214	)		0—
(Gain) loss on legal fee obligation settled with stock		(9,525	)		156,434
Net noncash lease expense		56,151			273,070			13			15
Inventory reserve charge		39,478			0—
Other		0—			14,893
Changes in operating assets and liabilities:
Accounts receivable, net		(59,232	)		320,186			75			11
Inventories		270,805			(15,922	)		399			119
Prepaid expenses and other current assets		703,257			561,248			252			382
Accounts payable		171,835			(1,631,839	)		692			32
Accrued expenses and other current liabilities		324,316			(1,407,813	)		(1,497	)		(414	)
Right of use operating leases		(78,622	)		0—
Operating lease liabilities		33,277			(355,274	)		(15	)		(9	)
Net cash used in operating activities		(9,273,543	)		(16,469,736	)		(4,780	)		(4,156	)
Cash flows from investing activities:
Purchase of marketable securities		(5,082,730	)		(22,166,376	)		0—			(5,083	)
Proceeds from maturities of marketable securities		22,300,000			10,500,000			0—			7,000
Net cash provided by (used in) investing activities		17,217,270			(11,666,376	)
Net cash provided by investing activities								0—			1,917
Cash flows from financing activities:
Shares issued, net of related expenses		25,685,232			17,139,563
Proceeds from note issued		0—			1,410,524
Shares issued								0—			6,920
Net cash provided by financing activities		25,685,232			18,550,087			0—			6,920
Effect of changes in exchange rates on cash and cash equivalents		124,112			(145,312	)		(27	)		141
Net increase (decrease) in cash and cash equivalents		33,753,071			(9,731,337	)
Net (decrease) increase in cash and cash equivalents								(4,807	)		4,822
Cash and cash equivalents – beginning of period		4,241,937			13,563,791			34,689			4,242
Cash and cash equivalents – end of period	$	37,995,008		$	3,832,454		$	29,882		$	9,064

Supplemental cash flows disclosures:
Proceeds from sale of state net operating losses	$	1,425,935		$	1,170,890
Interest paid	$	4,649		$	9,366		$	2		$	4
Income taxes paid	$	38,622		$	3,254
Supplemental schedule of noncash activity:
2020 Accrued bonus awarded in equity	$	399,997		$	0—		$	0—		$	400
Accounts payable paid through issuance of common stock	$	1,000,000		$	1,548,702

See accompanying notes to unaudited condensed consolidated financial statements.

~~Revenue,~~The Company’s net revenue represents total revenue, net of discounts, vouchers, rebates, returns, ~~and~~ co-payment assistance, and certain fees for services related to its e-commerce platform. These adjustments represent variable consideration and are recorded for the Company’s estimate of cash consideration expected to be given by the Company to a customer that is ~~solely generated from the sales~~presumed to be a reduction of the ~~gammaCore products.~~ transaction price of the Company’s products and, therefore, are characterized as a reduction of revenue. These adjustments are established by management as its best estimate of available information and will be adjusted to reflect known changes in the factors that impact such allowances. Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product.

Revenue is recognized when delivery of the product is completed. The Company deems control to have transferred upon the completion of delivery because that is the point in which (1) it has a present right to payment for the product, (2) it has transferred the physical possession of the product, (3) the customer has legal title to the product, (4) the customer has risks and rewards of ownership and (5) the customer has accepted the product. After the products have been delivered and control has transferred, the Company has no0 remaining unsatisfied performance obligations.

Revenue is measured based on the consideration that the Company expects to receive in exchange for gammaCore, which represents the transaction price. The transaction price includes the fixed per-unit price of the product and variable consideration in the form of trade credits, rebates, and co-payment assistance. The per-unit price is based on the Company’s established wholesale acquisition cost less a contractually agreed upon distributor discount with the customer.

Trade credits are discounts that are contingent upon a timely remittance of payment and are estimated based on historical experience. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ trade credits and discounts were immaterial.

Reimbursement for co-payments made by patients under the co-payment assistance program is considered variable consideration. Effective March 1, 2020, the amount of monthly co-payment assistance was reduced to a maximum of $100 per prescription. For the three and nine months ended September 30, 2021 and 2020, net sales reflect a reduction for the reduced cost of therapy under the co-payment assistance program. The calculation of the accrual is based on an estimate of claims and the cost per claim that the Company expects to incur associated with inventory that exists in the distribution channel at period end.

Managed care rebates represent our estimated obligations to pharmacy benefit managers. Rebate accruals are recognized in the same period the related revenue is recognized. Gross to net accruals based on estimated rebates were determined to be de minimis.

The Company generally invoices the customer and recognizes revenue once its performance obligations are satisfied, at which point payment is unconditional. Accordingly, under ASC 606, the Company’s contracts with customers did not give rise to contract assets or liabilities during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.

Agreed upon payment terms with customers are within ~~120~~30 days of shipment. Accordingly, contracts with customers do not include a significant financing component.

Note ~~6. Fair Value Measurements~~

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

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

•

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

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

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

Fair Value Hierarchy

September 30, 2021

Total

Level 1

Level 2

Level 3

Assets

Cash and cash equivalents

$
37,995,008

$
37,995,008

$
0—

$
0—

Marketable Securities:

U.S. treasury bonds

1,001,080

1,001,080

0—

0—

Total

$
38,996,088

$
38,996,088

$
0—

$
0—

Fair Value Hierarchy

December 31, 2020

Total

Level 1

Level 2

Level 3

Assets

Cash and cash equivalents

$
4,241,937

$
4,241,937

$
0—

$
0—

Marketable Securities:

U.S. treasury bonds

18,386,160

18,386,160

0—

0—

Total

$
22,628,097

$
22,628,097

$
0—

$
0—

~~The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~and year ended December 31, 2020. The carrying amount of the Company’s receivables and payables approximate their fair values due to their short maturities.~~

The reserve for obsolete inventory was ~~$760,940~~$711,000 and ~~$721,462~~$821,000 as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021, respectively. The decrease in the reserve for obsolete inventory was due to the disposal of previously reserved inventory. The Company records charges for obsolete inventory in cost of goods sold. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, noncurrent inventory was comprised of approximately ~~$1.1~~$0.8 million and ~~$0.7~~$0.9 million of raw materials, respectively, and $~~3.2~~2.5 million and ~~$4.2~~$3.0 million of work in process, respectively. Inventory classified under the category Work in process consists of prefabricated assembled product.

Future minimum lease payments under non-cancellable operating leases as of ~~September 30, 2021~~March 31, 2022:

The intrinsic value is calculated as the difference between the fair market value at ~~September 30, 2021~~March 31, 2022 and the exercise price per share of the stock options. As of March 31, 2022, all options outstanding had 0 intrinsic value. The options granted to employees generally vest over a three or four~~-year~~ year period.

~~The following table presents a summary of activity related to restricted stock awards (“RSAs”) granted during the nine months ended~~ ~~September 30, 2021:~~

The following table presents a summary of activity related to restricted and deferred stock units (“Stock Units”) granted during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022:

In general, Stock Units granted to employees vest over two to four-year periods.

Immediately following the Company’s annual meeting of stockholders, the Company generally grants each non-employee director an equity award that vests over a ~~12-month~~12-month period. Upon a non-employee director’s initial appointment or election to the board of directors, the Company grants such non-employee director an equity award subject to vesting as determined by the board of directors.

The Company recognized stock compensation expense for its equity awards as follows:

Total unrecognized compensation cost related to unvested awards as of ~~September 30, 2021~~March 31, 2022 was ~~$5.1~~$4.3 million and is expected to be recognized over the next ~~2.2~~2.1 years.

The fair value of each stock option award during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021 was estimated on the date of grant using the Black-Scholes model. ~~For the nine months ended September 30, 2021, expected~~Expected volatility was based on historical common stock volatility of the ~~Company’s peers. Expected~~ ~~volatility for the nine months ended September 30, 2020, was based on historical volatility of the Company’s common stock.~~Company's peers. The risk-free interest rate was based on the average U.S. Treasury rate that most closely resembled the expected life of the related award. The expected term of the award was calculated using the simplified method. No dividend was assumed as the Company does not pay regular dividends on its common stock and does not anticipate paying any dividends in the foreseeable future.

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and 2020 are summarized in the table below.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

You should read this section in conjunction with our unaudited interim condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, ~~2020~~2021 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC. As discussed in the section ~~titled~~titled “Cautionary Note Regarding Forward-Looking Statements,” the following ~~discussion~~discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from ~~those~~those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those under the caption "Risk Factors" in the aforementioned Annual Report and this Form ~~10-Q.~~ 10-Q.

Overview

We are a ~~commercial-stage~~commercial stage medical device company with a proprietary non-invasive vagus nerve stimulation, or nVNS, ~~therapy.~~therapy, called gammaCore. nVNS is a platform bioelectronic medical therapy that modulates neurotransmitters and immune function through its effects on both the peripheral and central nervous systems. We are initially focused on ~~neurology,~~utilizing gammaCore in the management and ~~our therapy, gammaCore, is cleared by the FDA for use by adults for the following neurology indications: the acute~~ treatment of ~~pain~~primary headache conditions.

Our gammaCore nVNS therapy is the first non-invasive, hand-held medical therapy applied at the neck as an adjunctive therapy to treat migraine and cluster headache through the utilization of a mild electrical stimulation to the vagus nerve that passes through the skin. Designed as a portable, easy-to-use technology, gammaCore can be self-administered by patients, prophylactically or as needed, without the potential side effects associated with ~~each~~commonly prescribed drugs. When placed on a patient ’s neck over the vagus nerve, gammaCore stimulates the nerve’s afferent fibers, which may lead to a reduction of ~~migraine and episodic cluster headache, or eCH,~~pain in patients. gammaCore (nVNS) is FDA cleared in the ~~preventive treatment of migraine headache and~~United States for adjunctive use for the preventive treatment of cluster ~~headaches, or CH.~~ ~~In February 2021, the FDA cleared the use of~~ gammaCore for acute and preventive treatment of migraine in adolescents. In September 2021, the FDA cleared the use of gammaCore for the treatment of Paroxysmal Hemicrania (PH) and Hemicrania Continua (HC) in adults. PH and HC are rare forms of trigeminal autonomic cephalalgias that are typically debilitating and difficult to treat.

~~We are also considering the potential for several additional indications for our~~ ~~nVNS~~ ~~technology, which are being studied through several investigator-initiated studies. These indications include post traumatic~~ headache ~~stroke, traumatic brain injury, post-traumatic stress disorder, opioid use disorders and post-operative ileus.~~

~~Our strategy has been to focus on selling gammaCore to treat different forms of primary headache upon regulatory approval.~~ ~~Following our initial FDA clearance in early 2017, our commercial strategy was to establish gammaCore as a first-line treatment option for the acute treatment of episodic CH~~ in adult patients, who have few alternative treatment options available to them. This strategy was supported by a product registry conducted from July 2017 through June 2018 to build advocacy among key opinion leaders in leading headache centers in the United States, and to generate patient demand in the form of prescriptions submitted to payers. We leveraged this advocacy during the registry period as we expanded into migraine and prepared for a full commercial launch of gammaCore and gammaCore Sapphire for the acute treatment of pain associated with ~~eCH and migraine~~episodic cluster headache in adult patients, which was accomplished in the third quarter of 2018. With the clearance of adjunctive use for the prevention of CH in December 2018, we continued to build upon our existing base of advocacy and patient support. In March 2020, the FDA cleared gammaCore for the preventive treatment of migraine headache in adult patients. In February 2021, gammaCore was cleared by the FDA for the acute and preventive treatment of migraine in ~~adolescents between~~adults and adolescent (ages 12 and ~~17 years~~older) patients, and paroxysmal hemicrania and hemicrania continua in adult patients. gammaCore is CE-marked in the United Kingdom and European Union for the acute and/or prophylactic treatment of ~~age.~~primary headache (Migraine, Cluster Headache, Trigeminal Autonomic Cephalalgias and Hemicrania Continua) and Medication Overuse Headache in adults.

Since May 2019, we have primarily focused our sales efforts in two channels, the U.S. Department of Veterans Affairs and U.S. Department of Defense, and the United Kingdom.

More recently, we began making targeted investments to increase the adoption of our gammaCore therapy in both the United States and abroad. We continue to evaluate strategies to expand commercial adoption of gammaCore, including traditional reimbursement models as well as the potential use of ~~telemedicine~~e-commerce and cash pay ~~direct to physician~~models through direct-to-physician and ~~consumer~~direct-to-consumer approaches. ~~In future quarters, we~~We expect to make continued targeted investments in the evaluation and possible execution of these ~~strategies.~~strategies in future quarters. We are unable to predict the impact these strategies will have on our financial condition, results of operations and cash flows due to numerous uncertainties.

~~Recently,~~In addition, we have announced agreements with new distributors to make gammaCore Sapphire available in several countries beyond the U.S. and United Kingdom.

Capital Activities

On ~~July 2, 2021,~~January 18, 2022, we ~~completed~~filed a ~~public~~Form S-3 registration statement, or the 2022 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights, debt securities and units, up to an aggregate amount of $75 million. The 2022 Shelf Registration Statement was declared effective on January 25, 2022.The proposed maximum offering price per unit and the proposed maximum aggregate offering price per class of ~~20,700,000 shares~~security will be determined from time to time by us in connection with the issuance by us of the securities registered under the 2022 Shelf Registration Statement. Until such time as the aggregate market value of our ~~common stock at a purchase~~securities held by non-affiliates equals or exceeds $75 million, the aggregate maximum offering price of ~~$1.00 per share. The net proceeds~~all securities issued by the us in any given 12-calendar month period pursuant to this and any of our other registration statements may not exceed one-third of the ~~offering~~aggregate market value of our securities held by non-affiliates.

License Agreement with Teijin Limited

On March 29, 2022, we entered into an agreement with Teijin Limited (Teijin), to ~~us were approximately $18.8 million, after deducting~~license certain exclusive rights to its nVNS technology for commercialization in Japan for a range of primary headache disorders.

Under the ~~underwriting discounts~~agreement, we will receive a non-refundable, upfront payment for the licenses and ~~commissions and other estimated offering expenses.~~rights granted to Teijin. The financial terms contain milestone payments, payable upon the decision by Teijin to commercialize the licensed product for specific indications. We ~~intend to use~~will also receive an annual license fee commencing on the ~~net proceeds~~first anniversary of the ~~offering~~agreement and payable annually until the first commercial sale on any approved indication. Upon favorable regulatory and payor coverage decisions in Japan, the parties plan to enter into an exclusive commercial supply agreement for ~~sales~~gammaCore nVNS.

The agreement contains customary terms and ~~marketing, working capital,~~conditions, including renewal and ~~general corporate purposes. In addition, we believe that opportunities~~termination provisions, as well as minimum purchase commitments once a commercial supply agreement is in place. Furthermore, Teijin is responsible for all costs associated with regulatory approval by the Pharmaceuticals and Medical Devices Agency (PMDA), the Japanese FDA equivalent. As part of the agreement, Teijin will have the right of first negotiation for a license to additional indications in Japan.

Sale of New Jersey Net Operating Losses

We may ~~exist~~be eligible, from time to time, to ~~expand~~receive cash from the sale of our current business through acquisitions or in-licenses of, or investments in, complementary companies, medicines, intellectual property, or technologies. While we have no current agreements or commitments for any specific acquisitions, in-licenses or investments at this time, we may use a portionnet operating losses under New Jersey's Department of the Treasury - Division of Taxation NOL Transfer Program. On April 14, 2022, we received a net ~~proceeds for these purposes.~~

~~On August 30, 2021, we entered into a Securities Purchase Agreement with our legal counsel pursuant to which we issued 952,380 shares~~cash amount of ~~common stock, at a purchase price of $1.05 per share. Upon issuance of~~approximately $445,000 from the ~~shares, certain~~sale of our ~~outstanding financial obligations to our legal counsel were deemed paid and satisfied in full.~~New Jersey state net operating losses.

Impact of COVID-19

We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it will impact business ~~partners.~~partners, customers and the global supply chain. In particular, the pandemic has resulted in a significant reduction in non-essential contact between patients and healthcare providers, shifting of focus by healthcare providers to the acute treatment of COVID-19 related illness regardless of specialty. We believe these restrictions have limited our sales force’s ability to generate additional interest in the Company’s products. WeWhile we began to experience disruptions from the COVID-19 pandemic during the three months ended March 31, 2020, we are unable to predict the impact that the COVID-19 pandemic may have on our financial condition, results of operations and cash flows due to numerous uncertainties. These uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, the development, rollout and availability of effective treatments and vaccines, the imposition of various protective public safety measures including vaccine mandates, as well as the transmissibility and effects of new coronavirus variants such as those experienced with respect to Omicron and subsequent variants beginning in early December 2021, and the direct and indirect economic effects of the pandemic and containment measures, among others. The outbreak of COVID-19 ~~pandemic~~ in many countries, including the United States, has significantly adversely impacted global economic ~~activity.~~activity and has contributed to significant volatility and pressure in financial markets. The global impact of the ~~pandemic~~outbreak has been rapidly evolving and many countries have reacted by instituting quarantines, mandating business and school closures and restricting travel. ~~The federal government, certain~~Certain states and cities, including those where our principal place of business is located and sales force seeks to operate, have also reacted by instituting quarantines, ~~vaccine mandates,~~ restrictions on travel, “shelter in place” rules, and restrictions on types of business that may continue to operate. We cannot predict if ~~the federal government or~~ additional states and cities will implement similar ~~or additional~~ restrictions or when restrictions ~~or mandates~~ currently in place will expire. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, including industries in which we operate. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain ~~unknown. See Item 1A. Risk Factors in this Form 10-Q, for discussion~~unknown of ~~certain risks associated with COVID-19 including the potential adverse effects on our workforce of the proposed U.S. Government vaccine mandate for employees, contractors,~~effective treatments and ~~subcontractors that service federal contracts. Additionally, see the section titled Risk Factors in our 2020 Annual Report on Form 10-K for discussion of risks related to COVID-19.~~vaccines.

Because the COVID-19 pandemic affected, among other things, our access to prescribing physicians and their access to headache patients, on March 23, 2020 we suspended our earlier full-year revenue guidance until we could better understand the trajectory of our business, as well as announced a reduction in our activities, and adjusted our cash runway expectations in response to the potential adverse impact caused by the COVID-19 pandemic. Compared to our earlier expectations, we believe that our results for the ~~nine months~~year ended ~~September~~ ~~30,~~December 31, 2021 ~~and 2020~~ reflect a negative impact from, among other things, the global pandemic. Moreover, our expectations for at least the ~~remainder~~beginning of ~~2021~~2022 have also been adversely affected by both the uncertainty and potential negative impact of the global ~~pandemic. Depending~~pandemic. We believe that the resurgence of UK COVID-19 cases during 2022 further negatively impacted our UK business. Depending upon the duration and severity of the pandemic, the continuing effect on our results and outlook over the long term remains uncertain.

Critical Accounting Policies and Estimates

~~In July 2020, the Company received an EUA for use~~The significant accounting policies and basis of ~~its gammaCore Sapphire CV nVNS therapy for the acute treatment~~presentation of ~~asthma exacerbations~~our condensed consolidated financial statements are described in ~~known or suspected COVID-19 patients. This EUA is expected to remain in effect for the duration~~Note 2 “Summary of Significant Accounting Policies” of the ~~COVID-19 pandemic justifying emergency use~~consolidated financial statements included with the annual report on Form 10-K.included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC on March 10, 2022 ("2021 Annual Report"), and in Note 2 "Summary of ~~these devices unless terminated or revoked by the FDA (after which products may no longer be used). The length~~Significant Accounting Policies" of the ~~effective period of~~condensed consolidated financial statements included within this EUA is uncertain. We did not recognize material revenue from the sales of gammaCore Sapphire CV during the nine months ended September 30, 2021 and we do not expect to recognize material revenue from the sales of gammaCore Sapphire CV in general.quarterly report on Form 10-Q.

The preparation of our financial statements is in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, require us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and other related disclosures. While we believe our estimates, assumptions and judgments are reasonable, they are based on information presently available. Actual results may differ significantly from these estimates due to changes in judgments, assumptions and conditions as a result of unforeseen events or otherwise, which could have a material impact on our financial position and results of operations.

The critical accounting policies that we believe, the judgements, estimates, and assumptions associated with such policies, have the greatest potential impact on the condensed consolidated financial statements are disclosed in the section titled Critical Accounting Policies and Estimates in Part II of our 2021 Annual Report.

2318

Results of Operations

Comparison of the three months ended ~~September 30, 2021~~March 31, 2022 to the three months ended ~~September 30, 2020~~March 31, 2021

The following table sets forth amounts from our condensed consolidated statements of operations for the three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021:

For the three months ended September 30,

2021

2020

Change

(in thousands)

Consolidated statements of operations:

Net sales

$
1,487.1

$
1,080.9

$
406.2
Cost of goods sold

355.0

347.5

7.5
Gross profit

1,132.1

733.4

398.7
Operating expenses

Research and development

470.3

629.1

(158.8
)
Selling, general and administrative

4,646.8

4,592.9

53.9
Total operating expenses

5,117.1

5,222.0

(104.9
)
Loss from operations

(3,985.0
)

(4,488.6
)

503.6

Other (income) expense

Interest and other income

(3.8)

(5.8
)

2.0
Other expense

3.8

3.6

0.2
Total other (income) expense

—

(2.2
)

2.2
Loss before income taxes

(3,985.0 )

(4,486.4 )

501.4
Provision for income taxes

(8.7 )

—

(8.7 )
Net loss

$
(3,993.7
)

$
(4,486.4
)

$
492.7

	Three months ended March 31,
	2022			2021			Change
	(in thousands)
Consolidated statements of operations:
Net sales	$	1,899		$	1,204		$	695
Cost of goods sold		360			364			(4)
Gross profit		1,539			840			699
Operating expenses
Research and development		934			499			435
Selling, general and administrative		6,186			5,725			461
Total operating expenses		7,120			6,224			896
Loss from operations		(5,581	)		(5,384	)		(197	)
Other (income) expense
Interest and other income		(4	)		(3	)		(1	)
Other expense		5			3			2
Total other (income) expense		1			—			1
Loss before income taxes		(5,582	)		(5,384	)		(198	)
Provision for income taxes		—			—			—
Net loss	$	(5,582	)	$	(5,384	)	$	(198	)

Net Sales

Net sales increased ~~38%~~58% for thethree months ended ~~September 30, 2021~~March 31, 2022compared to the comparable prior year period. This increase of ~~$406.2 thousand~~$695,000 is due to ~~increased~~a $770,000 increase in net sales ~~across all major channels including Commercial,~~from the U.S. Department of Veteran Affairs and our U.S. commercial channel, offset by a $75,000 decrease in ~~, and~~net sales from outside the U.S due principally to the impact of the COVID-19 pandemic in the United Kingdom ~~as well as sales from our new distributors outside~~in the first quarter of ~~the United States~~2022. ~~. For the remainder of our 2021 fiscal year, we~~ We expect that the majority of our remaining 2022 fiscal year revenue will continue to come from the U.S. Department of Veterans Affairs and United Kingdom, however, we expect to increase revenue from our commercial channel through cash pay models via direct-to-consumer approaches through our online stores in the U.S. and United Kingdom. Further, we are expanding our cash pay proposition to include direct to physician models for traditional neurology headache specialists, as well as the wide range of medical providers who manage patients' headache conditions including primary care physicians, women's health, pain management, functional and integrative medicine professionals, as well as chiropractors, and PharmDs (Doctors of Pharmacy).

Gross Profit

Gross profit increased ~~$398.7 thousand~~by $699,000 for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the comparable prior year ~~period due to the increase in net sales.~~ period. Gross margin was ~~76%~~81% and ~~68%~~70% for the three months ~~ended September 30,~~ended March 31, 2022 and 2021, respectively. ~~and~~ ~~2020, respectively.~~Our evolving commercial strategy has resulted in the launch of cash payment models under which we license certain starter devices. The ~~increase~~cost of the licensed starter device is being recognized as cost of goods sold over the estimated useful life of the starter device versus expensing the cost of goods at the time of sale. Moreover, in ~~gross margin~~ ~~was largely due to increased sales~~recent quarters, we have sold an increasing amount of longer duration therapy, resulting in a ~~more~~higher average selling price. These factors and favorable absorption of labor and overhead costs contributed to the increase in gross margin. Gross profit and gross margin for the remainder of 2022 will be largely dependent on revenue levels, product ~~mix.~~mix, any changes in the estimated useful lives of licensed starter devices, and the pricing levels of our therapy.

Research and Development

Research and development expense ~~decreased~~increased by ~~$158.8 thousand~~$435,000, or ~~25%~~87%, for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the prior year period. This ~~reduction~~increase was primarily due to ~~significant reductions~~ ~~in investment in research and development offset by~~ targeted investments to support product development, certain investigator-initiated trials, and scientific ~~publications~~publications. We expect research and ~~product development.~~development expenses to continue to increase during the remainder of 2022 largely due to planned expenditures in connection with the next generation of our therapy delivery platform.

Selling, General and Administrative

Selling, general and administrative expense ~~was consistent with~~of $6.2 million for the three months ended March 31, 2022 increased by $461 or 8%, compared to the comparable prior year ~~period.~~ ~~We expect an increase in our selling, general, and administrative expense for the remainder of our 2021 fiscal year~~period as we ~~may~~began to make targeted investments to support our commercial efforts.We expect our selling, general, and administrative expense to continue to increase for the remainder of 2022.

2419

Other (Income) Expense

~~Interest and other income of $3,834 and $5,719 for the~~ ~~three months ended September 30, 2021~~ ~~and 2020, respectively,~~Other (income) expense primarily ~~consists~~consisted of interest earned on cash, cash equivalents ~~and marketable securities.~~

offset by interest expense related to borrowings used to

~~Comparison of~~partially fund the ~~nine months ended~~ ~~September 30, 2021~~ ~~to the nine months ended September 30, 2020~~

~~The following table sets forth amounts from our consolidated statements of operations for the nine months ended September 30, 2021 and 2020:~~

For the nine months ended September 30,

2021

2020

Change

(in thousands)

Consolidated statements of operations:

Net sales

$
3,960.4

$
2,567.6

$
1,392.8
Cost of goods sold

1,093.3

918.6

174.7
Gross profit

2,867.1

1,649.0

1,218.1
Operating expenses

Research and development

1,794.1

3,182.7

(1,388.6 )
Selling, general and administrative

15,644.3

16,427.0

(782.7 )
Restructuring and other severance related charges

—

464.6

(464.6 )
Total operating expenses

17,438.4

20,074.3

(2,635.9 )
Loss from operations

(14,571.3
)

(18,425.3
)

3,854.0

Other (income) expense

Gain on extinguishment of debt

(1,422.2 )

—

(1,422.2 )
Interest and other income

(8.4
)

(80.5
)

72.1

Other expense

7.3

13.4

(6.1 )
Total other (income) expense

(1,423.3
)

(67.1
)

(1,356.2 )
Loss before income taxes

(13,148.0
)

(18,358.2
)

5,210.2

Benefit from income taxes

876.7

1,170.9

(294.2 )
Net loss

$
(12,271.3
)

$
(17,187.3
)

$
4,916.0

~~Net Sales~~

~~Net sales increased 54% for the nine months ended September 30, 2021 compared to the prior year period. The increase of $1.4 million is~~premiums due ~~to increased sales across all major channels including~~ ~~Commercial, the U.S. Department of Veteran Affairs, and in the United Kingdom, as well as sales from our new distributors outside of the United States.~~ ~~For the remainder~~under certain of our ~~2021 fiscal year, we expect the majority of our revenue will come from the U.S. Department of Veterans Affairs and United Kingdom.~~

~~Gross Profit~~

Gross profit increased $1.2 million for the nine months ended September 30, 2021 compared to the prior year. Gross margin increased to 72% for the nine months ended September 30, 2021 compared to 64% for the nine months ended September 30, 2020. ~~These increased gross profits were largely due to increased sales resulting in more favorable absorption of labor and overhead costs and product mix.~~

~~Research and Development~~

Research and development expense decreased by $1.4 million or 44% for the nine months ended September 30, 2021 compared to the prior year period. This reduction was primarily due to significant reductions ~~in investment in research and development~~ ~~including the early termination of our Premium II clinical trial~~, offset by the initial payment for an investigator-initiated study for the treatment of post-traumatic headache, and targeted investments to support certain investigator-initiated trials, scientific publications and product development.

~~Selling, General and Administrative~~

Selling, general and administrative expense was $15.6 million and $16.4 million for the nine months ended September 30, 2021 and 2020, respectively. The $782.7 thousand decrease was primarily due to cost reductions associated with the outbreak of the COVID-19 pandemic, offset by reinvestment in the commercial business as the pandemic began to subside. ~~We expect an increase in our selling, general, and administrative expense for the remainder of our 2021 fiscal year as we may make targeted investments to support our commercial efforts.~~

~~Restructuring and Other Severance Related Charges~~

There were no restructuring and other severance related costs for the nine months ended September 30, 2021. Restructuring and other severance related costs for the nine months ended September 30, 2020 of $464,606 consisted of severance related exp~~enses in connection with personnel changes.~~

~~Other (Income) Expense~~insurance policies.

~~Other (income) expense~~ ~~for the nine months ended September 30, 2021 primarily represents the gain of $1.4~~ ~~million recorded by the Company in association with the forgiveness of its PPP loan. Interest and other income~~ ~~of $8,493 and $80,460 for the nine months ended September 30, 2021 and 2020, respectively, primarily consists of interest earned on cash, cash equivalents and marketable securities.~~

~~Benefit from Income Taxes~~

The benefit from income taxes of $0.9 million and $1.2 million for the nine months ended September 30, 2021 and 2020, respectively, represent the sale of our 2019 and 2018 state net operating losses and research and development tax credits under the State of New Jersey's NOL Transfer Program.

Cash Flows

The following table sets forth the significant sources and uses of cash for the periods noted below:

	For the nine months ended September 30,						For the three months ended March 31,
	2021			2020			2022			2021
	(in millions)						(in thousands)
Net cash (used in) provided by
Operating activities	$	(9.3	)	$	(16.5	)	$	(4,780	)	$	(4,156	)
Investing activities	$	17.2		$	(11.7	)	$	—		$	1,917
Financing activities	$	25.7		$	18.6		$	—		$	6,920

Net cash used in operating activities was ~~$9.3~~$4.8 million and ~~$16.5~~$4.2 million for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020,~~2021, respectively. This ~~favorable result~~increase is primarily due to ~~a decrease~~the increase in our net loss from ~~operations, and less cash being used for working capital components such as inventory and accounts payable.~~operations.

~~Net~~No cash was provided by investing activities during the three months ended March 31, 2022. For the three months ended March 31, 2021, net cash provided by investing activities was ~~$17.2~~$1.9 million ~~for the nine months ended September 30, 2021 compared to $11.7 million used in investing activities for the nine~~ ~~months ended September 30,~~ ~~2020,~~ reflecting ~~an increase in~~ funds received from the maturity of marketable securities partially offset by ~~a decrease in~~ our purchases of marketable securities during the ~~current~~prior period.

~~Net~~No cash was provided by financing activities during the three months ended March 31, 2022. For the three months ended March 31, 2021, net cash provided by financing activities was ~~$25.7~~$6.9 million ~~for the nine~~ ~~months ended September 30, 2021~~, representing proceeds from the sale of our common stock.

As of ~~September 30, 2021,~~March 31, 2022, our cash and cash equivalents ~~and marketable securities~~ totaled ~~$39.0~~$29.9 million.

We have experienced recurring losses since our inception. We incurred net losses of ~~$12.3~~$5.6 million and ~~$17.2~~$5.4 million for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020,~~2021, respectively. We expect to continue to incur substantial negative cash flows from operations for at least the next several years as we work to increase market acceptance of our gammaCore therapy for the acute treatment of ~~eCH, the prevention of cluster~~primary headache and ~~the preventive and acute treatment of migraine in adults and adolescents.~~ its other indications.

Our expected cash requirements for the next 12 months and beyond are largely based on the commercial success of our ~~products.~~products and the level of targeted investment in our commercial strategies. There are significant risks and uncertainties as to our ability to achieve these operating results, including as a result of the adverse impact on ~~its~~our headache business from the ongoing COVID-19 ~~pandemic. These conditions raise substantial doubt about our ability to continue as a going concern.~~pandemic

We have historically funded our operations from the sale of our common stock. During the nine months ended September 30, 2021, we received net proceeds of approximately $25.7 million from such sales and as of September 30, 2021, our cash, cash equivalents and marketable securities totaled $39.0 million.

~~We believe that the substantial doubt of our ability to continue as going concern is alleviated based on proceeds received from recent offerings of our common stock.~~. We believe our cash and ~~marketable securities~~cash equivalents will enable us to fund our operating expenses and capital expenditure requirements, as currently planned, for at least the next 12 months from the date the ~~accompanying~~ financial statements included in this Form 10-Q are ~~issued.~~made available.

Beyond the next 12 months, we believe that our growth will depend, in part, on our ability to fund our commercial efforts for our gammaCore therapy, and to opportunistically pursue research and development activities for additional indications for our gammaCore therapy. Our existing resources are unlikely to allow us to conduct all the activities that we believe could be beneficial for our future growth. As a result, we will need to seek additional funds in the future or curtail or forgo some or all 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 payer and competitive landscape, our commercialization strategy, our development activities and regulatory matters, may occur beyond our control that would cause us to consume our available capital more quickly.

On January 18, 2022, we filed a Form S-3 registration statement, or the 2022 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights, debt securities and units, which we refer to collectively as the Shelf Securities, up to an aggregate amount of $75 million. The 2022 Shelf Registration Statement was declared effective on January 25, 2022. The proposed maximum offering price per unit and the proposed maximum aggregate offering price per class of security will be determined from time to time by us in connection with the issuance by us of the securities registered under the 2022 Shelf Registration Statement. 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 the us in any given 12-calendar month period pursuant to this and any of our other registration statements may not exceed one-third of the aggregate market value of our securities held by non-affiliates.

Item 1A.

RISK FACTORS

You should carefully consider the ~~following~~ risk factorsincluded in Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2021 (Annual Report), which was filed with the SEC on March 10, 2022, in addition to the following risk factor, and the other information in this report on Form 10-Q, including the section of this 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 our Annual Report, the following risk ~~factors~~factor and the risks described elsewhere in this report on Form 10-Q ~~occurs,~~occur, our business, operating results and financial condition could be seriously harmed. This report on Form 10-Q 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 our Annual Report, below and elsewhere in this report.

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common stock and our ability to access the capital markets.

On December 20, 2021, we received a notification from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that the we were not in compliance with Nasdaq Listing Rule 5450(a)(1) (the “Global Select Rule”) because the minimum bid price of our common stock on the Nasdaq Global Select Market closed below $1.00 per share (the “Minimum Bid Price Requirement”) for 30 consecutive business days. The ~~risk factor~~Nasdaq letter had no immediate effect on the Nasdaq trading or listing of our common stock. Pursuant to the initial Nasdaq notice and Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, we have 180 calendar days from the date of the notice, or until June 20, 2022, to regain compliance with the Global Select Rule by achieving a closing bid price for our common stock of at least $1.00 per share for at least 10 consecutive business days. If we do not regain compliance with the Global Select Rule by June 20, 2022, Nasdaq will notify us that our common stock will be delisted from the Nasdaq Global Select Market; however, we intend to apply to transfer our securities from the Nasdaq Global Select Market to the Nasdaq Capital Market (the “Transfer”), which will require that we satisfy the requirements for initial listing on such market as set forth ~~below contains changes to the similarly titled risk factor included~~ in ~~Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed~~Nasdaq Listing Rule 5505(a), with the ~~SEC on March 11, 2021.~~

~~Risks Related to COVID-19~~

~~The coronavirus pandemic could have a significant negative impact on our business, revenues, financial condition and results of operations.~~

~~The persistence~~exception of the ~~coronavirus pandemic has severely depressed~~Minimum Bid Price requirement for such market. If our application for Transfer is approved, we would have an additional 180 calendar days to achieve the ~~level of economic activity around the world. Many businesses and governments have taken preventative or protective actions, including mandatory COVID-19 vaccinations~~Minimum Bid Price Requirement for ~~employees, restrictions on travel and~~at least 10 consecutive business ~~operations, and advising or requiring individuals to limit or forego their time outside of their homes. As a result of those employees who choose not to receive a vaccination, there may be changes~~days in the workforce. Temporary closures of many businesses have been ordered and numerous other businesses have temporarily closed voluntarily. Further, individuals' ability to travel has been curtailed through mandated travel restrictions, voluntary or mandated closures of travel-related businesses, as well as quarantines, shelter-in-place/stay-at-home and social distancing orders.

This coronavirus pandemic has also impacted, and may continue to impact, our headquarters, manufacturing, and warehousing and distribution facilities, as well as those of our third-party vendors, including through the effects of facility closures, employee furloughs, reductions in operating hours, staggered shifts and other social distancing efforts, labor shortages, decreased productivity and unavailability of materials or components. For example, we have limited access to our New Jersey office as a result of state-imposed restrictions. Furthermore, the recent Biden administration’s executive order requiring all on-site and remote federal employees, contractors and sub-contractors to be vaccinated against COVID-19 or receive an approved medical or religious exemption by December 8, 2021 may apply to us because of our~~Federal Supply Schedule Medical Equipment and Supply contract. Failure~~ to comply with ~~the executive order could lead to loss~~Rule 5550(a)(2) of the ~~contract, which could have~~Nasdaq Capital Market. Any such application for Transfer would include a ~~material adverse~~customary statement that we will effect ~~on our business, revenues, financial condition and results of operations. In light~~a reverse stock split, if necessary to regain compliance with the Minimum Bid Price Requirement under Rule 5550(a)(2), during the additional 180-calendar day period. During this additional 180-calendar day period we would be required to comply with all continued listing requirements of the executive order, we have implemented a mandatory COVID-19 vaccination policy for all employees. All of our U.S. employees had to provide proof of vaccination by November 1, 2021, subject to medical and religious exemptions. ToNasdaq Capital Market other than the extent an employee qualifies for a medical or religious exemption, we will collaborate with the exempt employee to explore reasonable accommodation options that may permit the employee to perform the essential functions of their job without being vaccinated. We will be unable to accommodate an employee’s exemption request if such accommodation would prevent an employee from performing the essential functions of their job, or would result in undue hardship, which includes, but in not limited to, a risk of harm to others. There can be no assurance that this policy will not have an adverse effect on our recruitment and retention of, and relations with our employees. The coronavirus pandemic may also impact our ability to sell our product, ship our product on a timely basis and may increase our costs.Minimum Bid Price Requirement.

The spread of coronavirus has also caused us to modify our business practices (including a mandatory COVID-19 vaccine policy, social distancing practices, requiring non-essential production related team members to work remotely where possible, restricting business travel, cancelling certain events, and limiting visitor access to our facilities), and we may take further actions as may be required by government authorities or that we determine are necessary or advisable. Work-from-home and other measures introduce additional operational risks, including cybersecurity risks, and have affected the way we conduct our business, which could have an adverse effect on our operations. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and illness and workforce disruptions could lead to unavailability of key personnel and harm our ability to perform critical functions. In addition, work-from-home and related business practice modifications present significant challenges to maintaining our corporate culture, including employee engagement and productivity, both during the immediate pandemic crisis and as we make additional adjustments in the eventual transition from it. Implementing new business practices in order to protect employees, vendors and other parties with whom we interact may result in increased costs. Furthermore, even if we follow what we believe to be best practices, there can be no assurance that our measures will prevent the transmission of COVID-19 between employees. Any incidents of actual or perceived transmission may expose us to liability claims, adversely impact employee productivity and morale, and result in negative publicity and reputational harm.

Additionally, our sales and marketing efforts are, and may from time to time be, adversely affected by protocols for screening and restricting outside visitors and vendors that have been adopted by the Department of Veterans Affairs, commercial prescribers and other third parties. Officially imposed quarantines and self-quarantines could also interfere with patients’ ability to see a health care provider and obtain our gammaCore therapy.

The degree to which coronavirus impacts our results will continue to depend on future developments that are highly uncertain and cannot be predicted, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development, rollout and availability of effective treatments and vaccines, the imposition of protective public safety measures, and how quickly and to what extent normal economic and operating conditions can resume, if at all. These uncertainties may result in delays or modifications to our plans, initiatives and results.

~~For the reasons set forth above and other reasons that may come to light due to the coronavirus outbreak and any associated protective or preventative measures,~~If we are unable to ~~reasonably estimate coronavirus’ impact~~regain compliance with the Global Select Rule prior to June 20, 2022 and our ~~business, revenues, financial condition and results of operations.We are similarly unable~~Transfer application to ~~predict~~ the ~~degree~~Nasdaq Capital Market is not approved, or such Transfer application is approved but we do not subsequently regain compliance with the Minimum Bid Price Requirement under Rule 5550(a)(2) during the second 180-calendar day period, we may be subject to ~~which the pandemic impacts our customers, suppliers, vendors, capital markets, and other partners, and their financial conditions, but~~delisting from Nasdaq. In that event, we may appeal such delisting determination to a ~~material~~Nasdaq hearing panel. Such a delisting could have a negative effect on ~~these parties~~the price of our common stock, impair the ability of investors sell or purchase our common stock when they wish to do so, and materially adversely affect our ability to raise capital or pursue strategic, financing or other transactions on acceptable terms, or at all. Delisting from Nasdaq could also ~~adversely affect us.~~have other negative results, including the potential loss of institutional investor interest.

The impact of coronavirus could also exacerbate other risks discussed below, which could in turn have a material adverse effect on us. Developments related to coronavirus have been rapidly changing, and additional impacts and risks may arise that we are not aware of or able to appropriately respond to currently.

Our ability to market gammaCore Sapphire CV under the EUA may be adversely affected to the extent that (i) the coronavirus pandemic subsides, regardless of whether or not the EUA is terminated, revoked or expires, and (ii) other treatments or vaccines for coronavirus are developed and made available. Furthermore, there are a number of preventative vaccines in development with two having received an Emergency Use Authorization approval and others potentially nearing regulatory approval. Additionally, the United States and other countries around the world have recently begun to approve and commence distributing COVID-19 vaccines in their jurisdictions. The broad distribution of COVID-19 vaccines may reduce demand for gammaCore Sapphire CV treatment as it may no longer be considered medically necessary.

More generally, in the future, our business, financial results, and financial condition may be negatively impacted by the effects of other disease outbreaks, epidemics, pandemics, or similar widespread public health concerns.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

(a) Not applicable.

(b) Not applicable.

3222

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021		2020
Revenue channel:
Department of Veterans Affairs and Department of Defense	63.6%	59.8%		60.7%		59.0%
National Health Service	24.1%	24.2%		25.6%		28.1%

	Three months ended March 31,
	2022	2021
Revenue channel:
VA/DoD	66.4%	55.5%
National Health Service	13.0%	25.8%

As of September 30, 2021
	Amortized Cost		Unrealized Gain		Unrealized (Loss)			Fair Value
Cash and cash equivalents	$	37,995,008	$	0—	$	0—		$	37,995,008
Marketable securities:
U.S. Treasury Bonds		1,001,506		0—		(426	)		1,001,080
Total cash, cash equivalents, and marketable securities	$	38,996,514	$	0—	$	(426	)	$	38,996,088

As of December 31, 2020
	Amortized Cost		Unrealized Gain		Unrealized (Loss)			Fair Value
Cash and cash equivalents	$	4,241,937	$	0—	$	0—		$	4,241,937
Marketable securities:
U.S. Treasury Bonds		18,388,970		0—		(2,810	)		18,386,160
Total cash, cash equivalents, and marketable securities	$	22,630,907	$	0—	$	(2,810	)	$	22,628,097

	September 30, 2021		December 31, 2020
(in thousands)					March 31, 2022		December 31, 2021
Raw materials	$	820,227	$	1,008,653	$	862	$	769
Work in process		4,163,251		4,304,415		3,697		4,072
Finished goods		447,856		428,549		342		461
Total inventories, net		5,431,334		5,741,617		4,901		5,302
Less: noncurrent inventories		4,349,009		4,865,181		3,324		3,941
Current inventories, net	$	1,082,325	$	876,436
Current inventories					$	1,577	$	1,361

			Fair Value Hierarchy
September 30, 2021	Total		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	37,995,008	$	37,995,008	$	0—	$	0—
Marketable Securities:
U.S. treasury bonds		1,001,080		1,001,080		0—		0—
Total	$	38,996,088	$	38,996,088	$	0—	$	0—

Remainder of 2021	$	39,414
2022		160,486
(in thousands)
Remainder of 2022				$	121
2023		163,962			164
2024		167,524			167
2025 and thereafter		704,900
2025					171
2026					161
2027 and thereafter					373
Total future minimum lease payments		1,236,286			1,157
Less: Amounts representing interest		(462,274	)		(411	)
Total	$	774,012		$	746

	September 30, 2021		December 31, 2020
Accrued professional fees	$	166,050	$	270,543
Accrued bonuses		1,400,403		1,424,878
Accrued insurance expense		873,592		164,832
Other employee related expenses		425,067		371,033
Accrued state taxes		548,705		0—
Lease settlement liability		320,000		0—
Other		696,026		734,416
	$	4,429,843	$	2,965,702

	Nine months ended September 30,				Three Month Ended March 31,
	2021		2020
(in thousands)					2022		2021
Outstanding stock options		5,131,263		3,693,943		6,323		4,906
Nonvested restricted stock and unit awards		1,153,364		1,230,651		1,366		1,216
Stock purchase warrants		216,944		715,199		217		715
		6,501,571		5,639,793		7,906		6,837

Number of Warrants		Exercise Price	Expiration Date
22,253	$	5.68	3/30/2022
17,066	$	12.60	6/30/2022
151,364	$	12.60	8/18/2022
14,286	$	12.60	8/31/2022
11,975	$	15.30	12/22/2025
216,944

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)			Aggregate Intrinsic Value	Number of Options (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Outstanding, January 1, 2021		3,815,585		$	5.56		8.9	$	342,551
Outstanding, January 1, 2022											5,137		$	4.61		8.0
Granted		1,345,136			1.97				21,600		1,187			00.76
Exercised		0—			0—				0—		0—			0—
Cancelled		(29,458	)		5.22				*		(1	)		0—
Outstanding, September 30, 2021		5,131,263		$	4.62		8.2	$	73,800
Exercisable, September 30, 2021		1,988,192		$	7.67		7.6	$	36,000
Outstanding, March 31, 2022											6,323		$	3.88		8.1
Exercisable, March 31, 2022											2,785		$	6.47		7.4

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested, January 1, 2021		25,645		$	10.07
Granted		165,413			2.41
Vested		(149,894	)		2.82
Cancelled		(5,687	)		6.38
Nonvested, September 30, 2021		35,477		$	2.82

	Number of Shares (in thousands)			Weighted Average Grant Date Fair Value
Nonvested, January 1, 2022		1,056		$	1.66
Granted		300			0.50
Vested		(14	)		1.85
Cancelled		(5	)		2.83
Nonvested, March 31, 2022		1,337		$	1.39

Exhibit Number		Description
10.2†		electroCore, Inc. 2018 Omnibus Equity Incentive Plan, incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q as filed with the Commission on August 14, 2018.

31.1*		~~Certification~~C ertification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

**	Furnished herewith.
†	Indicates management agreement or compensation plan.

	Company Name

Date: ~~November 4, 2021~~May 5, 2022	By:	/s/ DANIEL S. GOLDBERGER
		Daniel S. Goldberger
		Chief Executive Officer (Principal Executive Officer)

Date: ~~November 4, 2021~~May 5, 2022	By:	/s/ BRIAN M. POSNER
		Brian M. Posner
		Chief Financial Officer (Principal Financial and Accounting Officer)

PART I. FINANCIAL INFORMATION

Page Number