Neuraxis, INC

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 and has market clearance from FDA for functional abdominal pain associated with IBS in children. Our RED device is an easy-to-use, office-based, point-of-care test that identifies patients with chronic constipation due to pelvic floor dyssynergia and has FDA market clearance for adults. Other indications in our pipeline are comprised of functional nausea in children, post-concussion syndrome in children, cyclic vomiting syndrome in children and functional abdominal pain associated with IBS in adults.

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 dyssynergia and has FDA market clearance 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 $2,122,796 and $1,755,234 for the three months ended September 30, 2025 and 2024, respectively, and $6,091,898 and $6,793,596 for the nine months ended September 30, 2025 and 2024, respectively. Although we had stockholders’ equity of $2,284,941 as of September 30, 2025, 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 device and seek FDA clearance of our device for other indications as we also fund selling and marketing efforts to expand the adoption of RED. 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 $1,761,432 and $2,278,684 for the three months ended March 31, 2026 and 2025, respectively. Although we had stockholders’ equity of $5,747,550 as of March 31, 2026, 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 are able to generate sufficient revenue to fund our operations, including FDA clearance of our IB-Stim device 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 three to four devices. Potential patients with future indications are expected to use four to six or more devices per patient. In an effort to treat all patients, the Company provides devices at a discount to lower income patients without healthcare insurance.

Current 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 patient being treated for functional abdominal pain associated with IBS, functional dyspepsia (FD) and/or associated FD with nausea symptoms will use four devices.

Previous wording

Given the current economic environment, we cannot predict whether inflation will have a material impact on our operations for the foreseeable future.

Current wording

Inflation did not have a material impact on our operations for any applicable period and we do not expect inflation to have a material impact on our operations for the foreseeable future.

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 and RED devices, 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 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 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 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 our IB-Stim device, 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 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 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 our IB-Stim device and new products to address other indications, and as we adopt new manufacturing processes and technologies.

Previous wording

We have four categories of expenses: cost of goods sold, selling, research and development, and general and administrative.

Current wording

We have four categories of expenses: cost of goods sold, selling, research and development (“R&D”), and general and administrative (“G&A”).

Previous 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 and other inventory charges totaled $11,598 and $2,030 for the three months ended September 30, 2025 and 2024, respectively, and $24,339 and $2,030 for the nine months ended September 30, 2025 and 2024, respectively. We have fixed-price contracts with the manufacturers of our devices.

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 charge is recorded. Expired inventory charges totaled $758 and $0 for the three months March 31, 2026 and 2025, respectively. We have fixed-priced contracts with the manufacturers of our devices.

Previous wording

Our selling expenses primarily consist of advertising, marketing and promotion of the Company’s products including salaries and related personnel costs and travel expenses. The Company reclassified $243,093 and $786,546 of General and Administrative Expenses to Selling Expenses in the Condensed Statements of Operations for the three and nine months ended September 30, 2024, respectively, to conform to current period presentation.

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 $366,165 of general and administrative expenses to selling expenses in the Condensed Statements of Operations for the three months ended March 31, 2025, to conform to current year presentation.

Previous 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 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 $53,825 and $164,396 of General and Administrative Expenses to Research and Development Expenses in the Condensed Statements of Operations for the three and nine months ended September 30, 2024, respectively, to conform to current period presentation. We expect to incur future research and development expenses for other indications, such as post-concussion syndrome and cyclic vomiting syndrome in children.

Current wording

Our research and development expenses primarily consist 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 $57,311 of general and administrative expenses to research and development expenses in the Condensed Statements of Operations for the three months ended March 31, 2025, 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, audit, insurance, investor relations, facility costs, utilities and travel costs.

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

The following table presents our statements of operations for the three and nine months ended September 30, 2025 and 2024, respectively:

Current wording

The following table presents our statements of operations for the three months ended March 31, 2026 and 2025, respectively:

Previous wording

Our net loss decreased $701,698, or 10.3%, from $6,793,596 for the nine months ended September 30, 2024, to $6,091,898 for the nine months ended September 30, 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 wording

Our net loss improved $517,252, or 22.7%, from $2,278,684 for the three months ended March 31, 2025, to $1,761,432 for the three months ended March 31, 2026, due to higher sales volume and the corresponding gross profit and the absence of a one-time, non-recurring charge in 2025 to settle a lawsuit, partly offset by higher selling expenses.

Previous wording

We had cash on hand of $4,377,109 and $3,696,870 as of September 30, 2025, and December 31, 2024, respectively. We maintained a working capital surplus of $1,840,599 and $1,832,858 as of September 30, 2025, and December 31, 2024, respectively. The increase in working capital was primarily due to proceeds from the issuance of common stock and the exercise of common stock warrants partially offset by liabilities incurred to settle a lawsuit and purchase the NSS-2 Bridge trademark during the nine months ended September 30, 2025.

Current wording

We had cash on hand of $7,078,659 and $4,965,072 as of March 31, 2026, and December 31, 2025, respectively. We maintained a working capital surplus of $5,328,867 and $2,941,091 as of March 31, 2026, and December 31, 2025, respectively. The increase in working capital was primarily due to (i) proceeds from the issuance of common stock pursuant to the At The Market capital facility and the exercise of warrants and (ii) higher accounts receivable driven by IB-Stim device sales.

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 September 30, 2025, we had stockholders’ equity of $2,284,941 and short-term borrowings of $195,658.

Current 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 March 31, 2026, we had stockholders’ equity of $5,747,550 and short-term borrowings of $100,735.

Previous wording

The following table summarizes our cash flow from operating, investing and financing activities for the nine months ended September 30, 2025 and 2024:

Current wording

The following table summarizes our cash flow from operating, investing and financing activities for the three months ended March 31, 2026 and 2025:

Previous wording

Investing Activities – Net cash used in investing activities decreased $2,488, or 9.0%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to lower office equipment purchases partially offset by expenditures to manufacture the RED device.

Current wording

Investing Activities– Net cash used in investing activities decreased $18,000, or 100.0%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, due to capital expenditures to manufacture the RED device in 2025 that did not recur in 2026 once the device was launched.

Previous wording

Financing Activities – Net cash provided by financing activities increased $654,013, or 14.4%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to proceeds received from the issuance of common stock and the exercise of common stock warrants in 2025 compared to the issuance of convertible notes in 2024.

Current wording

Financing Activities– Net cash provided by (used in) financing activities increased $3,413,189, or 4,886.8%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to proceeds from the issuance of common stock pursuant to the At The Market capital facility and the exercise of warrants during the three months ended March 31, 2026.