Neuraxis, INC
For the period ended Dec 31, 2025. Filed Mar 19, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 19, 2026
NRXS$6.24+2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-20.
0001493152-25-010984
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-19.
0001493152-26-011505
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 43 previous paragraphs and 54 current paragraphs.
20 unchanged; 15 reworded; 19 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Selling expenses increased $811,090, or 55.2%, from $1,468,884 for the year ended December 31, 2024, to $2,279,974 for the year ended December 31, 2025, due to higher commissions from higher sales volume, a higher temporary commission structure to facilitate growth and adoption in new states, incremental sales and marketing headcount and increased advertising and marketing costs focused on health insurance carriers due to the January 1, 2026 effective date of IB’Stim’s new Category I CPT Code
Current report
General and administrative expenses increased $484,447, or 6.4%, from $7,578,242 for the year ended December 31, 2024, to $8,062,689 for the year ended December 31, 2025, primarily due to a $630,568 one-time, non-recurring charge to settle a lawsuit, headcount and related costs incurred to improve and enhance the Company’s internal control environment and the introduction of annual short-term and long-term incentive plans in 2024 that were not outstanding for the full fiscal year, partially offset by the absence of certain one-time non-recurring severance, hiring, consulting and advisory costs incurred in 2024 and lower legal, accounting and insurance costs as new hires in 2024 have internally absorbed certain services.
Current report
Other Income (Expense)
Current report
Other income increased $1,114,037, or 102.7%, from $1,084,684 of expense for the year ended December 31, 2024, to $29,353 of income for the year ended December 31, 2025, due to the absence of one-time, non-recurring 2024 settlements relating to a 2023 convertible note dispute and certain pre-IPO Series A Preferred Stock shareholder claims and the conversion of convertible notes into Series B Preferred Stock in 2024 which eliminated any related debt discount and interest charges.
Current report
Our net loss decreased $440,946, or 5.4%, from $8,241,501 for the year ended December 31, 2024, to $7,800,555 for the year ended December 31, 2025, primarily due to higher sales volume and the absence of one-time, non-recurring 2024 settlements relating to a 2023 convertible note dispute and certain pre-IPO Series A Preferred Stock shareholder claims, partially offset by higher selling expenses and the one-time non-recurring settlement of a lawsuit in 2025.
Current report
Operating Activities – Net cash used in operating activities increased $334,579, or 5.5% from $6,098,264 for the year ended December 31, 2024, to $6,432,843 for the year ended December 31, 2025, primarily due to the payment of the 2024 short-term incentive program in 2025 (no program existed previously) and higher inventory purchases as the Company prepared for the January 1, 2026 effective date of the Category I CPT code for the IB-Stim device, partially offset by better receivable collections.
Current report
Investing Activities – Net cash used in investing activities increased $103,374, or 372.2%, from $27,776 for the year ended December 31, 2024, to $131,150 for the year ended December 31, 2025, primarily due to the $100,000 installment payment to Masimo pursuant to the July 1, 2025 NSS-2 Bridge license termination agreement that allowed the Company to recapture the rights to a trademark and two patent applications.
Current report
Financing Activities– Net cash provided by financing activities decreased $1,912,155, or 19.6%, from $9,744,350 for the year ended December 31, 2024, to $7,832,195 for the year ended December 31, 2025, primarily due to (i) gross financing proceeds of $10,214,846 for the year ended December 31, 2024 from the issuance of Series B preferred stock and convertible notes in addition to the exercise of warrants compared to gross financing proceeds of $8,826,615 for the year ended December 31, 2025 through the issuance of common stock and the exercise of warrants and (ii) higher financing fees, offering costs and legal fees paid in 2025 versus 2024.
Current report
Critical Accounting Estimates
Current report
Management considers its allowance for credit losses, reserve for sales returns and reserve for excess and expired inventory to be the most critical accounting estimates and assumptions in understanding our financial statements because they involve significant judgments and uncertainties. Actual results could differ from management’s estimates. See Note 2 for further information on our most significant accounting policies.
Current report
Allowance for Credit Losses
Current report
The Company sells its IB-Stim and RED devices primarily to hospitals and private physician practices with payment generally due within 30 days. The Company does not offer discounts if the customer pays some or all of an invoiced amount prior to the due date. We maintain an allowance for credit losses to reflect our estimate of expected losses on accounts receivable from the sale of our medical devices. The estimate of expected credit losses is a considered a critical accounting estimate because it requires significant judgment and the use of assumptions about future customer payment behavior and economic conditions.
Current report
In estimating the allowance for credit losses, management regularly reviews its past due account receivable balances and evaluates many factors including, but not limited to, creditworthiness, past transaction and payment history, historical loss experience, current economic industry trends and payment terms. The Company performs that review by utilizing an aging schedule to assess the collectability of accounts. Actual credit losses may differ from estimated amounts. Differences between estimated and actual credit losses are recognized in earnings in the period in which such changes are identified. A change in the past due account balance by 10 percentage points as of December 31, 2025, would increase or decrease the allowance for credit losses by $558.
Current report
Allowance for Sales Returns
Current report
We recognize revenue net of estimated product returns upon customer receipt under FOB destination terms. Customers may return devices if the goods are found to be defective, nonconforming or otherwise do not meet the technical specifications. Historically, the Company has also allowed returns at the request of physicians, on a case-by-case basis, as long as the devices are returned in their original, unopened packaging. As a result, we record an allowance for sales returns which is considered a critical accounting estimate because it requires significant judgment and is sensitive to changes in assumptions.
Current report
In establishing the allowance for sales returns, management evaluates historical return rates by product and adjusts those rates to reflect current trends and conditions. Estimates are reassessed each reporting period based on actual return activity and updated information. Actual product returns may differ from estimated amounts. Differences between estimated and actual returns are recognized as adjustments to revenue in the period in which they become known. A change in the return rate of one percentage point as of December 31, 2025, would have increased or decreased the allowance by $5,593.
Current report
Allowance for Excess and Expired Inventory
Current report
Inventories are valued at the lower of cost or net realizable value. An allowance for excess and expired inventory is recorded to reflect inventory quantities that are not expected to be sold or that are expected to be sold below cost. The determination of this allowance is considered a critical accounting estimate because it requires significant judgment regarding future product demand and the timing of orders.
Current report
In estimating the allowance for excess and expired inventory, management considered a number of factors including, but not limited to, historical sales trends, product shelf life and expiration dates, regulatory and clinical requirements, backlog and anticipated demand and future orders. Actual inventory usage and obsolescence may differ from management’s estimates. Differences between estimated and actual inventory usage are recognized as adjustments to earnings in the period in which they become known. A change in the forecasted demand of 20 percentage points as of December 31, 2025, would have increased or decreased the allowance by $758.
Removed paragraphs (8)
Previous report
Selling expenses increased $1,139, or 0.4%, from $323,569 for the year ended December 31, 2023, to $324,708 for the year ended December 31, 2024, due to higher sales volume.
Previous report
General and administrative expenses increased $621,610, or 7.5%, from $8,328,315 for the year ended December 31, 2023, to $8,949,925 for the year ended December 31, 2024, due to(i) higher legal, insurance, investor relations, board of directors and stock exchange listing costs as a publicly held entity that the Company did not incur prior to its 2023 IPO, (ii) incremental headcount to build out the market access, sales and finance teams, (iii) severance charges related to the Company’s prior Chief Operating Officer, (iv) one-time advisory costs, (v) expenses related to the introduction of an annual short-term incentive program and (vi) higher advertising costs in order to expand market awareness, partially offset by the non-recurrence of 2023 post-IPO consulting and recruiting services and the payment of incentive bonuses contingent upon the 2023 IPO.
Previous report
Other (Expense) Income
Previous report
Other expense decreased $6,877,504 or 86.4%, from $7,962,188 for the year ended December 31, 2023, to $1,084,684 for the year ended December 31, 2024, due to the full conversion of the convertible notes upon the IPO on August 9, 2023, that eliminated any further debt discount, issuance cost, debt extinguishment and fair value derivative valuation net charges and lower interest expense and issuance cost amortization from a lower debt burden in 2024, partially offset by financing charges incurred to settle a 2023 convertible note dispute and other expense to settle certain claims of pre-IPO Series A Preferred Stock shareholders.
Previous report
Our net loss decreased $6,385,182, or 43.7%, from $14,626,683 for the year ended December 31, 2023, to $8,241,501 for the year ended December 31, 2024, primarily due to(i) higher sales volume, (ii) the elimination of debt discount, issuance cost and fair value derivative valuation net charges as a result of the conversion of notes upon the 2023 IPO and (iii) lower interest expense and issuance cost amortization from a lower debt burden in 2024, partially offset by (iv) financing charges incurred to settle a 2023 convertible note dispute and other expense to settle certain claims of pre-IPO Series A Preferred Stock shareholders and (v) higher general and administrative expenses due to the absence of 2023 post-IPO consulting and recruiting services and the payment of incentive bonuses relating to the 2023 IPO.
Previous report
Operating Activities – Net cash used in operating activities declined 595,714, or 8.9% from $6,693,978 for the year ended December 31, 2023, to $6,098,264 for the year ended December 31, 2024, primarily due to more issuances of common stock instead of cash for certain services in 2024 than in 2023 and lower interest payments in 2024 due to the conversion of debt in the 2023 IPO, partially offset by payments to past due vendors in 2024 for 2023 services.
Previous report
Investing Activities – Net cash used in investing activities decreased $44,005, or 61.3%, from $71,781 for the year ended December 31, 2023, to $27,776 for the year ended December 31, 2024, primarily due to the purchase of the Company’s trademark in 2023 that did not recur in 2024.
Previous report
Financing Activities– Net cash provided by financing activities increased $3,153,730, or 47.9%, from $6,590,620 for the year ended December 31, 2023, to $9,744,350 for the year ended December 31, 2024, primarily due to principal repayments on notes payable in 2023 that did not recur in 2024 and the Company subsequently raised capital from the IPO in 2023 to retire the notes payable and issued Convertible Series B Preferred Stock in 2024.
Reworded paragraphs (15)
Previous wording
We are a growth stage company focused on developing neuromodulation therapies to address chronic and debilitating conditions in children. Our mission is to provide solutions that create value and provide better and safer patient outcomes. Our IB-Stim device is a PENFS system intended to be used in patients 8-21 years of age with functional abdominal pain associated with IBS. Our device already has market clearance from FDA for functional abdominal pain associated with IBS in children. Other indications in our pipeline are comprised of functional nausea in children, post-concussion syndrome in children, and cyclic vomiting syndrome in children.
Current wording
We are a growth stage company focused on developing neuromodulation therapies to address chronic and debilitating conditions in children. Our mission is to advance drug-free neuromodulation therapies that improve patient outcomes and reduce medication burden in complex disorders, while expanding access to effective care for populations with significant unmet needs. Our IB-Stim device is a PENFS system with FDA indications for patients 8 years and older with functional abdominal pain associated with IBS, functional dyspepsia (FD), and associated FD nausea symptoms. Our RED device is an easy-to-use, office-based, point-of-care test that identifies patients with chronic constipation due to pelvic floor dyssnergia and has FDA for adults. Other indications in our pipeline are comprised of post-concussion syndrome, cyclic vomiting syndrome, post-operative pain and fibromyalgia pain.
Previous wording
Since our inception, we have incurred significant operating losses. Our net loss was $8,241,501 and $14,626,683 for the years ended December 31, 2024 and 2023, respectively. Our auditors have expressed substantial doubt about our ability to continue as a going concern in their audit opinion. We expect to incur significant expenses and operating losses for the foreseeable future as we continue to pursue widespread insurance coverage of our IB-Stim and RED devices and seek FDA clearance of our device for other indications. There are a number of milestones and conditions that we must satisfy before we will be able to generate sufficient revenue to fund our operations, including FDA clearance of our IB-Stim device to treat future indications.
Current wording
Since our inception, we have incurred significant operating losses. Our net loss was $7,800,555 and $8,241,501 for the years ended December 31, 2025 and 2024, respectively. Although we had stockholders’ equity of $3,399,372, our auditors have expressed substantial doubt about our ability to continue as a going concern in their audit opinion. We expect to incur significant expenses and operating losses for the foreseeable future as we continue to pursue widespread insurance coverage of our IB-Stim and RED devices and seek FDA clearance of our device for other indications. There are a number of milestones and conditions that we must satisfy before we will be able to generate sufficient revenue to fund our operations, including FDA clearance of IB-Stim to treat future indications.
Previous wording
Our revenue is derived from the sale of our IB-Stim device to healthcare companies, primarily hospitals and clinics. Sales generally are not seasonal and only mildly correlated with economic cycles. Our IB-Stim device sells for $1,195 per device, and each child being treated for functional abdominal pain associated with IBS will use four.
Current wording
Our revenue is derived from the sale of IB-Stim to healthcare companies, primarily hospitals and clinics. Sales generally are not seasonal and only mildly correlated with economic cycles. IB-Stim sells for $1,195 per device, and each patient being treated for functional abdominal pain associated with IBS, functional dyspepsia (FD), and/or associated FD nausea symptoms will use four devices.
Previous wording
Our sales typically are made on a purchase order basis rather than through long-term purchase commitments. We enter into sales agreements with customers for IB-Stim devices based on purchase orders and standard terms, which vary slightly based on the customer’s form, and conditions of sale. Standard payment terms generally are that payment is due within 30 days. Our largest sales were to three customers representing approximately 40% and 45% of total sales for the years ended December 31, 2024 and 2023, respectively.
Current wording
Our sales typically are made on a purchase order basis rather than through long-term purchase commitments. We enter into sales agreements with customers for IB-Stim based on purchase orders and standard terms, which vary slightly based on the customer’s form, and conditions of sale. Standard payment terms generally are net 30 days. Our largest sales were to two customers representing approximately 28% and 35% of total sales for the years ended December 31, 2025 and 2024, respectively.
Previous wording
Our management uses gross profit and gross margin to evaluate the efficiency of operations and as a key component to determining the effectiveness and allocation of resources. We calculate gross profit as net sales less cost of goods sold, and gross margin as gross profit divided by net sales. Our gross margin has been and will continue to be affected by a variety of factors, primarily the average selling price of our IB-Stim device, production volume, order flows, change in mix of customers, third-party manufacturing costs related to components of our IB-Stim device, and cost-reduction strategies. We expect our gross profit to increase for the foreseeable future as our net sales grows, both through broader insurer acceptance of our IB-Stim device in the near term and approval of our technology for the treatment of other indications over the longer term. Our gross margin may fluctuate from quarter to quarter due to changes in average selling prices, particularly as we introduce enhancements to our IB-Stim device and new products to address other indications, and as we adopt new manufacturing processes and technologies.
Current wording
Our management uses gross profit and gross margin to evaluate the efficiency of operations and as a key component to determining the effectiveness and allocation of resources. We calculate gross profit as net sales less cost of goods sold, and gross margin as gross profit divided by net sales. Our gross margin has been and will continue to be affected by a variety of factors, primarily the average selling price of IB-Stim, production volume, order flows, change in mix of customers, third-party manufacturing costs related to components of our devices and cost-reduction strategies. We expect our gross profit to increase in the foreseeable future as our net sales grows, both through broader insurer acceptance of IB-Stim in the near term and approval of our technology for the treatment of other indications over the longer term. Our gross margin may fluctuate from quarter to quarter due to changes in average selling prices and the mix of patient healthcare coverage (e.g., discounts are provided to lower income patients without healthcare insurance), particularly as we introduce enhancements to IB-Stim and new products to address other indications, and as we adopt new manufacturing processes and technologies.
Previous wording
Costs of goods sold consist of costs paid for the IB-Stim device to our contract manufacturer along with shipping and handling costs and expired inventory charges. Expired inventory expense is related to our FDA clearance for our device in the treatment of functional abdominal pain associated with IBS in children. Specifically, a certain component of our IB-Stim device is cleared for a two-year period after the date the device is manufactured, and if the device is not sold in such period, we must take the device out of inventory and write it off. The cost of expired inventory was $25,008 for the year ended December 31, 2023, representing 8.2% of our costs of goods sold. The Company did not have any expired inventory in the year ended December 31, 2024. We have a fixed-price contract with the manufacturer of our IB-Stim device to produce the device. We expect production costs to remain relatively constant and only nominal inventory expirations in the foreseeable future.
Current wording
Costs of goods sold consist of costs paid for the IB-Stim and RED devices to our contract manufacturers along with shipping and handling costs and expired inventory charges. Expired inventory expense is related to the FDA clearance period from the date our devices are manufactured, and if the device is not sold in such period, a reserve is recorded. Expired inventory charges totaled $19,973 and $0 for the years ended December 31, 2025 and 2024. We have fixed-price contracts with the manufacturers of our devices.
Previous wording
Our core selling expenses primarily consist of commissions.
Current wording
Our selling expenses primarily consist of advertising, marketing and promotion of the Company’s products including salaries, commissions and other related personnel costs including travel expenses. The Company reclassified $1,144,176 of general and administrative expenses to selling expenses in the Consolidated Statements of Operations for the year ended December 31, 2024, to conform to current year presentation.
Previous wording
Research and development expense is attributable to our clinical trials and related efforts to have our IB-Stim device cleared by the FDA for other indications. We expect future R&D expenses for other indications, such as functional nausea, post-concussion syndrome and cyclic vomiting syndrome in children.
Current wording
Research and development expenses consist primarily of clinical research studies, new product development, costs of materials and supplies used in research and development activities and salaries and other related personnel costs for employees engaged in research and development activities to have our IB-Stim and RED devices cleared by the FDA for other indications. The Company reclassified $227,507 of general and administrative expenses to research and development expenses in the Consolidated Statements of Operations for the year ended December 31, 2024, to conform to current year presentation. We expect future R&D expenses for other indications, such as post-concussion syndrome, cyclic vomiting syndrome, post-operative pain and fibromyalgia pain.
Previous wording
General and administrative expense primarily consists of wages and benefits, professional fees including legal and audit, insurance, investor relations, advertising, facility costs, utilities and travel.
Current wording
General and administrative expense primarily consists of wages and benefits, professional fees including legal and audit, insurance, investor relations, facility costs, utilities and travel.
Previous wording
Net sales increased $225,876, or 9.2%, from $2,460,049 for the year ended December 31, 2023, to $2,685,925 for the year ended December 31, 2024, primarily due to volume growth from our financial assistance programs that provide discounts to patients without insurance coverage.
Current wording
Net sales increased $883,357, or 32.9%, from $2,685,925 for the year ended December 31, 2024, to $3,569,282 for the year ended December 31, 2025, primarily due to volume growth from (i) both patients with health insurance coverage and those participating our financial assistance programs that provide discounts to patients without health insurance coverage and (ii) device sales from the Company’s launch of the RED product in 2025. Although unit growth from the discounted financial assistance programs outpaced the full health insurance reimbursement programs, the Company’s overall growth was function of new customers (both hospitals and private physical practices), new insurance carrier coverage in certain locations across the United States and higher prior authorization approval rates of the Company’s Category III CPT Code.
Previous wording
Gross profit increased $167,219, or 7.8%, from $2,156,704 for the year ended December 31, 2023, to $2,323,923 for the year ended December 31, 2024, due to higher sales volume. Despite the increase in sales volume, the decrease in gross margin from 87.7% for the year ended December 31, 2023, to 86.5% for the year ended December 31, 2024, was due to higher growth in the Company’s financial assistance programs that are discounted to patients without insurance coverage compared to the Company’s undiscounted full reimbursement customers.
Current wording
Gross profit increased $682,443, or 29.4%, from $2,323,923 for the year ended December 31, 2024, to $3,006,366 for the year ended December 31, 2025, due to higher sales volume. Despite the increase in sales volume, the decrease in gross margin from 86.5% for the year ended December 31, 2024, to 84.2% for the year ended December 31, 2025, was due to higher discounting in the Company’s financial assistance programs provide to patients without insurance coverage, a higher unit growth rate of the discounted financial assistance programs compared to the full reimbursement health insurance programs and expired RED inventory.
Previous wording
Research and development expenses increased $36,792, or 21.7%, from $169,315 for the year ended December 31, 2023, to $206,107 for the year ended December 31, 2024, due to costs to bring the RED product to market and higher costs on a medical research project.
Current wording
Research and development expenses increased $59,997, or 13.8%, from $433,614 for the year ended December 31, 2024, to $493,611 for the year ended December 31, 2025, due to costs to higher year-over-year spending on a medical research project, improved IB-Stim design features and costs to develop the RED device.
Previous wording
Our operating loss increased $492,322, or 7.4%, from $6,664,495 for the year ended December 31, 2023, to $7,156,817 for the year ended December 31, 2024, primarily due to higher general and administrative expenses partially offset by higher sales volume.
Current wording
Our operating loss increased $673,091, or 9.4%, from $7,156,817 for the year ended December 31, 2024, to $7,829,908 for the year ended December 31, 2025, primarily due to higher selling and general and administrative expenses partially offset by higher gross profit from sales volume.
Previous wording
We had cash on hand of $3,696,870 and $78,560 as of December 31, 2024 and 2023, respectively. We maintained a working capital surplus of $1,832,858 and negative working capital of $1,643,058 as of December 31, 2024 and 2023, respectively. The increase in working capital was primarily due to the issuance of $5,000,000 of Convertible Series B Preferred Stock in November 2024 that significantly improved the Company’s liquidity position.
Current wording
We had cash on hand of $4,965,072 and $3,696,870 as of December 31, 2025 and 2024, respectively. We maintained a working capital surplus of $2,941,091 and $1,832,858 as of December 31, 2025 and 2024, respectively. The increase in working capital was primarily due to the sale and issuance of 3,108,170 shares of common stock pursuant to the shelf registration statement and warrant exercises for gross proceeds of $8,826,615 offset by cash used in operations of $6,432,843 for the year ended December 31, 2025 which improved the Company’s liquidity position.
Previous wording
We have incurred losses since inception and have funded our operations primarily with a combination of sales, debt, and the sale of capital stock. As of December 31, 2024, we had stockholders’ equity of $2,067,748, short-term outstanding borrowings of $154,152 and no long-term debt.
Current wording
We have incurred losses since inception and have funded our operations primarily with a combination of sales, debt, the exercises of warrants and the sale of capital stock. As of December 31, 2025, we had stockholders’ equity of $3,399,372, short-term outstanding borrowings of $148,293 and long-term debt of $9,999.