Planet MicroCap 95 views 17 hours ago - ELECTROCORE INC

Welcome to the Planet Microcap Podcast, the number one destination for everything microcap investing. I'm your host, Robert Kraft, and each week I sit down with elite investors, CEOs, and market experts to uncover actionable insights and real-world lessons you can apply immediately. Are you a new or experienced microcap investor? Do you want to meet microcap management teams as well as other microcap investors from around the world? Planet Microcaps hosts the highest quality in-person microcap events in North America. The mission is to bring the best microcap investors, companies, and allocators together to gather, connect, and grow. Visit PlanetMicrocap.com to learn more about our Las Vegas and Toronto events. Now, a quick disclaimer. This presentation is for informational purposes only and should not be construed as a recommendation to purchase or sell any security referenced herein. Planet Microcap Holdings LLC and Microcap Club LLC are not licensed brokers nor registered investment advisors. We, our partners, contractors, members, subscribers, guests, or affiliates may or may not hold positions in one or more of the securities mentioned in this presentation and may trade in such securities at any time. We may have received cash compensation from one or mere participants for presenting at past, present, or future events. We recommend you consult a licensed investment advisor, broker, or legal counsel before purchasing or selling any securities referenced in this presentation. Welcome to Planet Microcap. I'm your host, Robert Kraft, and joining me right now is Josh Lev. He is the co-CEO, president, and CFO at ElectroCorp. It's a publicly traded company. The symbol is E-C-O-R on NASDAQ. And Electrocorp will be presenting at our upcoming investor conference, Planet Microcap Toronto, powered by Microcap Club, taking place October 27 through 29, 2026 at the Arcadian Court and Loft. For more information to register to meet with Josh and the team at the event, please register to attend at planetmicrocap.com. And with that, Josh, thank you for joining me today. How are you doing? I'm great, Robert. Thank you so much. And thanks so much for having us again at the Planet Microcap Conference. The last one we did in Las Vegas was amazing. And we're really looking forward to it. Yeah, no, we're setting the bar high, man. You know, so we're looking forward to having you back again. And look, we haven't chatted since the last time you did. You participated in our event earlier this year. We published that last interview on May 14, 2026. But before we get into the updates and all that good stuff, for those that aren't familiar with the ElectroCore story, can you give us that quick overview and history of the company? Yeah, sure. Absolutely. So ElectriCorps, as you mentioned before, most important thing is traded on NASDAQ. Ticker is ECOR. ElectriCorp is a non-invasive bioelectronic technology company that sells primarily two product lines for health and wellness and for prescription based products. The primary products that we sell are into the government, particularly the VA, and that's going to be important as we get a little bit into some of the metrics that I'm sure you'll ask me about in short term. But really what we offer are non-pharmaceutical based pain alternatives that are non opioid based pain therapeutics that prescription products can be written for different forms of primary headaches and health and wellness products can be accessed through our website, www.truvega.com, for different areas such as sleep, relaxation, and stress. Very good. Thank you for that. All right. Now, let's get that update. Like I said, last interview we put out about mid-May earlier this year. What would you say are some of the company's key highlights from the last four, five, six months? Yeah. So it's a great question. You know, the last time we spoke, we had just started a new transition that we were going through. And we've really entered into this new era. That transition took place when our former CEO retired. I took on the new role as co-CEO, along with a new member of our team, a gentleman by the name of Mike Fox, who is my co- CEO and the chief operating officer. The reason why that's relevant is because that commercial transition that we've been working on, this new area that we've entered into, is really around addressing and accelerating revenue in the future. And what that means is Mike Fox has comes to us with about 35 plus years of commercializing medical devices, but more pertinent is that his last 10 to 15 years has really been focused on commercializing medical devices within the federal marketplace. When we talk about our revenues in the second quarter of 2026, which was the last financials as of today that we reported, we were about a $19 million through six months, which is about a $40 million rounding up revenue run rate. But majority of our revenue, approximately 70% of that revenue comes from the VA. And why that's important is when you bring in our revenue and you look at the distribution of where our revenue is coming from, we've been able to generate that revenue all through our existing sales team and our legacy model, which really was headache personnel being told to sell within the VA without having really any Rolodexes, any networks and any real direct experience. So, you know, a real, hey, we're going to build the airplane as you're flying it sort of situation. When we brought in Mike, what we did is we brought a new talent and commercial leadership that now has those networks, those Rolotexes, those existing relationships within not just the VA and also sales individuals that sell within the VA, but also areas in the federal marketplaces such as federal workers' comp, TRICARE, active duty military, that will allow us to now increase the distribution and commercial channels that we're selling our product into in areas that are both part of the federal system, but Also, where we're already covered. We have a contract to sell into the VA. We Have a contract To sell into active duty military. But we never had the right personnel to go ahead and do that. And now we have the right leader that's in place with the right network and the right Rolodex of sales individuals that can really help us not only accelerate our revenue growth, but also diversify it across multiple commercial organizations, commercial opportunities such as federal workers' comps, such as active duty military. And so far, we've been very enthusiastic about how it's going. A large part of the experience that he brings is not only building sales forces, but structuring those sales organizations in a way that can help us as a company become a lot more efficient and get a lot more operating leverage in our P&L. And that's one of the things that we believe that we're going to see in fairly short order. I believe that as Mike gets on board and as he has changed the commercial structure, we're going to start seeing items such as our sales and marketing expense as a percentage of revenue decrease over time from the roughly 60% it is around, you know, before we made the change down to industry standard, which is around 40 to 50% within the next 12 to 18 months. Excellent. Thank you for that update. One quick follow-up to that, you know, because even this is my own naivete, but you're right. You get your military contract to sell your products, but it's like, oh, but we, we weren't ready. It's like you're like, what was that experience like where you're saying, okay, we have this contract, we can go in and start selling our stuff, but We don't have the infrastructure to do so. What was what? Why didn't that happen yet? You know, and why? And why now is the time to actually capitalize on that? Yeah, that's a great question. So I'd say a few things. Number one is, it's not that we were waiting, we got the contract to sell into the VA a while ago, but the focus was, you know, focus, right the individuals the individuals that were selling into the va are not necessarily the same individuals that sell into into those other areas and i think what's really important to understand is we think globally as selling intothe government is saying oh you're selling to this big thing called the government and then all of a sudden you know all the revenue will follow and the truth be told is when it comes down to selling into these individual system each individual system has its own budget cycle. Each individual system has its own politics and each individual system even has its own credential. And what I mean by that is someone that is credentialed to go in to make a sale, for example, into the VA doesn't necessarily have the credentials they need to get onto a military base. So for us, our goal was really to focus in areas where we were reliably getting paid. The VA was taking up our product over the course of the five to six years that I've been with the company, we've been able to grow our revenue approximately 50% compounded annually. In 2025, full year 2025, our revenue reached $32 million. And again, majority of that coming from the VA. But when you look at the VA system itself, it's not like saying VA and that is your customer. Yes, the VA as a whole is who you're selling into, but the VA has approximately 170 discrete budgets or discrete customers, and each one of them has their own politics. So if you think about why now, the answer is we need the ability to scale. We now believe that we're in a position to scale, we've reached a revenue threshold where we believe that we are starting to see operating leverage out of our P&L, which means every incremental dollar that we generate is going to improve our net loss and then ultimately get to the point of adjusted EBITDA positive, and then also ultimately cash. So to answer your question, why now? I think we've done an amazing job of sort of setting that foundation within our VA infrastructure. We've sold into roughly 150 of those 170 discrete different customers. But now we're taking it to the next level, bringing in individuals that actually have relationships, existing sales experience within those customers, but also have access to now a new customer base, which is going to be those active duty medical facilities. And again, each of those is going to have its own discrete politics, its own discrete budget, its on discrete procurement. So you can't boil the ocean. But why now? Why now is because we think that we're actually at that point where we're seeing that operating leverage that you need in order to push every incremental dollar down to the bottom line in a way that we can do it such that our margins from the commercial expenses that we had before will go down as a percentage of revenue, meaning the infrastructure, I think, is now set and solid. And now every incremental dollar increase will hopefully fall to the bottom. We've said publicly out there, we've got three main pillars or catalysts for investors to look at. The first is research and development. So, you know, we talk a lot about our technology. We have two main technologies. One is a non-invasive vagal nerve stimulation product. The other one is a sophisticated TENS unit, both used for different things. Non-invasive vagal nerve stimulation is primarily used for different forms of primary headache. And the sophisticated Tенс unit is primarily used for fibromyalgia. Both of them are FDA cleared. And everyone looks at us in non-invasive vagal nerve stimulation as well as the other product. Both are platform technologies. But we haven't necessarily done a really good job of showing the street that we can actually commercialize it. So why is that important? From a strategic catalyst point of view, we said we're going to be more active in showing people that we are not a one customer, one product company. We're more than just a VA headache business. We have a platform of potential indications that we could address for non-opioid-based pain therapeutics. So looking for investors, looking for things that we're making progress on new indications is one of those catalysts. The second is opening up those new commercial channels, like we've said before, the federal workers' comp. One of the things I didn't touch on is we are on formulary on contract and Kaiser Permanente. Kaiser P permanente has 12.5 million covered lives versus the VA that has 9.5 million covered life, so it's a bigger system. And then ultimately, the proof being in the pudding, which is accelerating revenues, better operating leverage, and getting to adjusted EBITDA positive. Those are the catalysts we've put out there. And that's what we measure every quarter when we speak to the street. Excellent. Well, you just hit on my next question about what folks should be focused on for duration 26 going into 27. So this was one of our quick hitters. So with that, Josh, where can our audience go and find more information about ElectroCore and follow along? Yeah. So again, most important thing to take away from this call is we're publicly traded on NASDAQ. The ticker is ECOR. You can always go to our website, electrocore.com, or you could go if you're interested in our non-invasive health and wellness product, you could Go to www.truvega.com. In all instances, you could see information about our product, our company, our leadership team, and pull down the investor deck, which exists there on our investor relations page. Excellent. Josh, thank you for joining me today. Really do appreciate it. Good luck. Stay safe. And I'll see you next week. Yeah, looking forward to it. Thanks again, Robert. Thank you.