Neuraxis, Inc. (NRXS) 10-K Summary
Business Context and Reporting Period
Company: Neuraxis, Inc.
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Reporting Status: Smaller Reporting Company; Emerging Growth Company
Business Overview: Neuraxis is a growth-stage medical technology company focused on neuromodulation therapies for gastrointestinal (GI) disorders, specifically Disorders of Gut-Brain Interaction (DGBIs). The company's primary product is IB-Stim, a percutaneous electrical nerve field stimulation (PENFS) device FDA-cleared for functional abdominal pain associated with IBS and functional dyspepsia in patients aged 8 and older. A second product, RED (Rectal Expulsion Device), was launched in 2025 for evaluating neuromuscular function in constipation.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 |
|---|---|---|
| Net Sales | $3,569,282 | $2,685,925 |
| Gross Profit | $3,006,366 | $2,323,923 |
| Gross Margin | 84.2% | 86.5% |
| Operating Loss | $(7,829,908) | $(7,156,817) |
| Net Loss | $(7,800,555) | $(8,241,501) |
| Cash and Cash Equivalents | $4,965,072 | $3,696,870 |
| Working Capital | $2,941,091 | $1,832,858 |
| Total Debt (Short & Long Term) | $158,292 | $154,152 |
Note: The company reported a net loss decrease of 5.4% year-over-year despite higher operating expenses, driven by increased sales volume and the absence of certain one-time 2024 settlement charges.
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 32.9% to $3.57 million, driven by volume growth from both insured patients and financial assistance programs, as well as the commercial launch of the RED device.
- Margin Compression: Gross margin decreased from 86.5% to 84.2% due to higher discounting in financial assistance programs and expired RED inventory charges ($19,973).
- Expense Increases:
- Selling Expenses: Increased 55.2% to $2.28 million due to higher commissions, headcount, and marketing spend targeting insurance carriers ahead of the new CPT code.
- General & Administrative (G&A): Increased 6.4% to $8.06 million, primarily due to a $630,568 one-time charge to settle pending litigation and costs to enhance internal controls.
- Other Income: Shifted from a $1.08 million expense in 2024 to a $29,353 income in 2025, largely due to the absence of 2024 debt dispute settlements and the conversion of convertible notes to preferred stock.
Guidance, Outlook, and Risks
Outlook and Milestones:
- CPT Code Implementation: The company secured a Category I CPT Code (64567) for PENFS procedures, effective January 1, 2026. This is expected to streamline billing and expand access.
- Insurance Coverage: 24 commercial health insurers (approx. 100 million covered lives) have instituted formal medical policy coverage for PENFS.
- Pipeline: Clinical trials are underway for post-concussion syndrome, cyclic vomiting syndrome, post-operative pain, and fibromyalgia.
- Liquidity: Management believes existing cash ($4.97 million) is sufficient to meet operating needs only through the end of 2026. Additional capital will be required thereafter.
Risks and Contingencies:
- Going Concern: Auditors have expressed substantial doubt about the company's ability to continue as a going concern due to a history of losses and negative cash flows.
- Internal Controls: The company identified material weaknesses in internal control over financial reporting (ICFR) in 2024 and 2025, including ineffective approval processes and contract management. Remediation is ongoing but not yet complete.
- Legal Proceedings: A $750,000 settlement was reached in April 2025 regarding a RICO Act lawsuit (accrued as of Dec 31, 2025). A separate patent dispute regarding U.S. Patent No. 10,413,719 remains unresolved.
- Reimbursement: Future revenue depends heavily on the adoption of insurance coverage and the maintenance of CPT codes.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $4.97 million cash balance against the stated need for additional capital before the end of 2026.
- Internal Controls: Monitor progress on remediation of material weaknesses in ICFR, as failure to remediate could impact audit opinions and stock price.
- CPT Code Adoption: Track the actual utilization of CPT Code 64567 post-January 1, 2026, and its impact on reimbursement rates and sales velocity.
- Litigation Settlement: Confirm the execution and payment schedule of the $750,000 litigation settlement (12 monthly installments starting Jan 2026).
- Preferred Stock Dividends: Review the impact of cumulative dividends on Series B Preferred Stock (8.5% per annum) on net loss available to common shareholders.