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What changed in Neuraxis, INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Neuraxis, INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+186 added−158 removedSource: 10-K (2025-03-20) vs 10-K (2024-04-16)

Top changes in Neuraxis, INC's 2024 10-K

186 paragraphs added · 158 removed · 131 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+40 added−4 removed255 unchanged
Biggest changeMedical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable neurological pain management generator, with percutaneously-implantable needle arrays; medical system and apparatus consisting of a non-implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical system and apparatus consisting of implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical system and apparatus consisting of a non-implantable modulating frequency generator and implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management, namely, patient stimulators for auricular and peri-auricular peripheral nerve field neuromodulation therapy; medical apparatus, appliances and instruments for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, headache control, control of phantom limb pain, stump pain, reflex sympathetic dystrophy (RSD), peripheral neuropathies and other types of sympathetically mediated pain Registered US IB-STIM 5926831 03-Dec-2019 10 Int. medical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered 17 Country Trademark Reg.
Biggest changeMedical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable neurological pain management generator, with percutaneously-implantable needle arrays; medical system and apparatus consisting of a non-implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical system and apparatus consisting of implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical system and apparatus consisting of a non-implantable modulating frequency generator and implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management, namely, patient stimulators for auricular and peri-auricular peripheral nerve field neuromodulation therapy; medical apparatus, appliances and instruments for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, headache control, control of phantom limb pain, stump pain, reflex sympathetic dystrophy (RSD), peripheral neuropathies and other types of sympathetically mediated pain Registered US IB-STIM 5926831 03-Dec-2019 10 Int. medical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered 18 US IB-STIM and Design 5926832 03-Dec-2019 10 Int. medical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; Medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered US IB-STIM AURICULAR STIMULATOR 5978411 04-Feb-2020 10 Int. medical apparatus, namely, electrical nerve stimulators; Medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; Medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; Medical device for peripheral nerve and nerve field stimulation; Medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; Medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered US IB-STIM AURICULAR STIMULATOR and Design 5978412 04-Feb-2020 10 Int. medical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered 19 Country Trademark App.
Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including the following: ● The FDA or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold; ● Patients do not enroll in clinical trials at the rate expected; ● Patients do not comply with trial protocols; ● Patient follow-up is not at the rate expected; ● Patients experience serious adverse events; ● Patients die during a clinical trial, even though their death may not be related to the products that are part of the trial; ● Device malfunctions occur with unexpected frequency or potential adverse consequences; ● Side effects or device malfunctions of similar products already in the market that change the FDA’s view toward approval of result in the imposition of new requirements or testing; 24 ● Institutional review boards and third-party clinical investigators may delay or reject the trial protocol; ● Third-party clinical investigators decline to participate in a trial or do not perform a trial on the anticipated schedule or consistent with the clinical trial protocol, investigator agreement, investigational plan, good clinical practices, the IDE regulations, or other FDA or IRB requirements; ● Third-party investigators are disqualified by the FDA; ● We or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans, or otherwise fail to comply with the IDE regulations governing responsibilities, records, and reports of sponsors of clinical investigations; ● Third-party clinical investigators have significant financial interests related to us or our study such that the FDA deems the study results unreliable, or the company or investigators fail to disclose such interests; ● Regulatory inspections of our clinical trials or manufacturing facilities, which may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials; ● Changes in government regulations or administrative actions; ● The interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness; or ● The FDA concludes that our trial design is unreliable or inadequate to demonstrate safety and effectiveness. 510(k) Clearance Process Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent,” as defined in the FDCA, to a legally marketed predicate device.
Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including the following: ● The FDA or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold; ● Patients do not enroll in clinical trials at the rate expected; ● Patients do not comply with trial protocols; ● Patient follow-up is not at the rate expected; ● Patients experience serious adverse events; ● Patients die during a clinical trial, even though their death may not be related to the products that are part of the trial; ● Device malfunctions occur with unexpected frequency or potential adverse consequences; ● Side effects or device malfunctions of similar products already in the market that change the FDA’s view toward approval of result in the imposition of new requirements or testing; 25 ● Institutional review boards and third-party clinical investigators may delay or reject the trial protocol; ● Third-party clinical investigators decline to participate in a trial or do not perform a trial on the anticipated schedule or consistent with the clinical trial protocol, investigator agreement, investigational plan, good clinical practices, the IDE regulations, or other FDA or IRB requirements; ● Third-party investigators are disqualified by the FDA; ● We or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans, or otherwise fail to comply with the IDE regulations governing responsibilities, records, and reports of sponsors of clinical investigations; ● Third-party clinical investigators have significant financial interests related to us or our study such that the FDA deems the study results unreliable, or the company or investigators fail to disclose such interests; ● Regulatory inspections of our clinical trials or manufacturing facilities, which may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials; ● Changes in government regulations or administrative actions; ● The interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness; or ● The FDA concludes that our trial design is unreliable or inadequate to demonstrate safety and effectiveness. 510(k) Clearance Process Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent,” as defined in the FDCA, to a legally marketed predicate device.
In addition, various states have enacted false claim laws analogous to the federal False Claims Act, although many of these state laws apply where a claim is submitted to any third-party payor and not merely a federal healthcare program. 31 The federal Health Insurance Portability and Accountability Act of 1996 created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
In addition, various states have enacted false claim laws analogous to the federal False Claims Act, although many of these state laws apply where a claim is submitted to any third-party payor and not merely a federal healthcare program. 32 The federal Health Insurance Portability and Accountability Act of 1996 created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Once applicable, the new regulations will among other things: ● Strengthen the rules on placing devices on the market and reinforce surveillance once they are available; 30 ● Establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● Improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● Set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the European Union, or EU; and ● Strengthen the rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
Once applicable, the new regulations will among other things: ● Strengthen the rules on placing devices on the market and reinforce surveillance once they are available; 31 ● Establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● Improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● Set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the European Union, or EU; and ● Strengthen the rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
There can be no assurance that submission of an IDE will result in the ability to commence clinical trials, and although the FDA’s approval of an IDE allows clinical testing to go forward for a specified number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and effectiveness, even if the trial meets its intended success criteria. 23 If the device under evaluation does not present a significant risk to human health, then the device sponsor is not required to submit an IDE application to the FDA before initiating human clinical trials, but must still comply with abbreviated IDE requirements when conducting such trials.
There can be no assurance that submission of an IDE will result in the ability to commence clinical trials, and although the FDA’s approval of an IDE allows clinical testing to go forward for a specified number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and effectiveness, even if the trial meets its intended success criteria. 24 If the device under evaluation does not present a significant risk to human health, then the device sponsor is not required to submit an IDE application to the FDA before initiating human clinical trials, but must still comply with abbreviated IDE requirements when conducting such trials.
United States Regulation The FDA regulates, among other things, the development, design, non-clinical and clinical testing, manufacturing, safety, effectiveness, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export and post-marketing surveillance of medical devices in the United States to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA. 22 FDA Premarket Clearance and Approval Requirements Unless an exemption applies, each new or significantly modified medical device commercially distributed in the United States requires FDA clearance of a 510(k) premarket notification.
United States Regulation The FDA regulates, among other things, the development, design, non-clinical and clinical testing, manufacturing, safety, effectiveness, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export and post-marketing surveillance of medical devices in the United States to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA. 23 FDA Premarket Clearance and Approval Requirements Unless an exemption applies, each new or significantly modified medical device commercially distributed in the United States requires FDA clearance of a 510(k) premarket notification.
For additional information, see “ Risk Factors – Because the Company is a ‘smaller reporting company,’ we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company” and “As a smaller reporting company,” we may at some time in the future choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public stockholders.” 21 Implications of Being an Emerging Growth Company We are an “emerging growth company” as defined in the JOBS Act.
For additional information, see “ Risk Factors – Because the Company is a ‘smaller reporting company,’ we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company” and “As a smaller reporting company,” we may at some time in the future choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public stockholders.” 22 Implications of Being an Emerging Growth Company We are an “emerging growth company” as defined in the JOBS Act.
Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness. 27 Ongoing Regulation by the FDA Even after the FDA permits a device to be marketed, numerous and pervasive regulatory requirements continue to apply.
Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness. 28 Ongoing Regulation by the FDA Even after the FDA permits a device to be marketed, numerous and pervasive regulatory requirements continue to apply.
The field of art pertains to an electrical stimulation device, including a stimulator containing a generator to deliver electrical pulses with defined parameters, and a power supply for supplying the electrical energy through four separate needles, and at least one of which is a needle array. 11 Pre-Clinical Data In an animal model of IBS, extracellular, electrophysiologic recordings were performed from neurons in the rat amygdala before and 15 minutes after PENFS treatment.
The field of art pertains to an electrical stimulation device, including a stimulator containing a generator to deliver electrical pulses with defined parameters, and a power supply for supplying the electrical energy through four separate needles, and at least one of which is a needle array. 10 Pre-Clinical Data In an animal model of IBS, extracellular, electrophysiologic recordings were performed from neurons in the rat amygdala before and 15 minutes after PENFS treatment.
Date Class/Goods Status US NEURO-STIM and Design 5105257 20-Dec-2016 10 Int. nerve stimulator apparatus Registered US NSS THE NEUROSTIM SYSTEM and Design 4905470 23-Feb-2016 10 Int. nerve stimulator apparatus Registered US THE NEURO-STIM SYSTEM and Design 5105258 20-Dec-2016 10 Int. nerve stimulator apparatus Registered US NSS 4852008 10-Nov-2015 10 Int.
Date Class/Goods Status US NEURO-STIM and Design 5105257 20-Dec-2016 10 Int. nerve stimulator apparatus Registered US NSS THE NEUROSTIM SYSTEM and Design 4905470 23-Feb-2016 10 Int. nerve stimulator apparatus Registered US NSS 4852008 10-Nov-2015 10 Int.
Eluxadoline: a schedule IV-controlled substance that is a mixed opioid receptor agonist/antagonist in the intestine approved for IBS-diarrhea 8 Devices 1. gammaCore: a transcutaneous, cervical vagal nerve stimulator cleared for cluster and migraine headaches. Recent studies using this device for adults with gastroparesis. 2. Transcranial Magnetic Stimulation: Multiple devices cleared to treat major depressive disorder and obsessive-compulsive disorder.
Eluxadoline: a schedule IV-controlled substance that is a mixed opioid receptor agonist/antagonist in the intestine approved for IBS-diarrhea 7 Devices 1. gammaCore: a transcutaneous, cervical vagal nerve stimulator cleared for cluster and migraine headaches. Recent studies using this device for adults with gastroparesis. 2. Transcranial Magnetic Stimulation: Multiple devices cleared to treat major depressive disorder and obsessive-compulsive disorder.
The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls. 28 The FDA has broad regulatory compliance and enforcement powers.
The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls. 29 The FDA has broad regulatory compliance and enforcement powers.
If adopted, the decision will enable data transfers from EU member states to the United Kingdom for a four-year period, subject to subsequent extensions. 34 Environmental Matters Based on our current operations, environmental protection requirements do not have a significant financial and operational effect on the capital expenditures, earnings and competitive position of our Company in the current financial year and are not expected to have a significant effect in the reasonably foreseeable future.
If adopted, the decision will enable data transfers from EU member states to the United Kingdom for a four-year period, subject to subsequent extensions. 35 Environmental Matters Based on our current operations, environmental protection requirements do not have a significant financial and operational effect on the capital expenditures, earnings and competitive position of our Company in the current financial year and are not expected to have a significant effect in the reasonably foreseeable future.
The EAD is no longer being manufactured, sold or distributed but reserved only for research purposes. 5 Pediatrics Industry Overview Pediatric providers, as a whole, had expressed concern about the lack of attention given to children with functional abdominal pain disorders (including IBS) and the limited treatment options available for a population that suffers from significant disabilities.
The EAD is no longer being manufactured, sold or distributed but reserved only for research purposes. 4 Pediatrics Industry Overview Pediatric providers, as a whole, had expressed concern about the lack of attention given to children with functional abdominal pain disorders (including IBS) and the limited treatment options available for a population that suffers from significant disabilities.
These indications consist of chronic nausea, post-concussion syndrome, chemotherapy-induced nausea and vomiting, cyclic vomiting syndrome. The chart below shows our status in the FDA review process for IB-Stim and each of the following pediatric indications: 1. Chronic nausea: RCT completed, and data being analyzed. ClinicalTrials.gov Identifier: NCT03675321, Defining Adolescent Nausea Through Brain-Gut Physiology and Non-Invasive Neurostimulation Response.
These indications consist of chronic nausea, post-concussion syndrome, chemotherapy-induced nausea and vomiting, cyclic vomiting syndrome. The chart below shows our status in the FDA review process for IB-Stim and each of the following pediatric indications: 1. Functional dyspepsia ( nausea ): RCT completed, and data being analyzed. ClinicalTrials.gov Identifier: NCT03675321, Defining Adolescent Nausea Through Brain-Gut Physiology and Non-Invasive Neurostimulation Response.
Even though a new product may have been cleared for commercial distribution by the FDA, we may find limited demand for our product unless reimbursement approval can be obtained and/or maintained from governmental and private third-party payors. 32 In addition to uncertainties surrounding coverage policies, there are periodic changes to reimbursement levels.
Even though a new product may have been cleared for commercial distribution by the FDA, we may find limited demand for our product unless reimbursement approval can be obtained and/or maintained from governmental and private third-party payors. 33 In addition to uncertainties surrounding coverage policies, there are periodic changes to reimbursement levels.
Below are the current standard treatments in children with functional abdominal pain and IBS. 6 Our Solutions We entered the pediatric market with clinical evidence, key opinion leaders and society endorsement, including a signed letter from the American Academy of Pediatrics and NASPGHAN supporting our request for insurers to pay for our IB-Stim device.
Below are the current standard treatments in children with functional abdominal pain and IBS. 5 Our Solutions We entered the pediatric market with clinical evidence, key opinion leaders and society endorsement, including a signed letter from the American Academy of Pediatrics and NASPGHAN supporting our request for insurers to pay for our IB-Stim device.
Clin Gastroenterol Hepatol. 2020;18:1987-1994). 14 Recently, the largest, prospective, multicenter registry for any drug or device in pediatric patients with pain associated DGBIs was published. It evaluated outcomes of pediatric patients (8-18 years) following a 4-week course of IB-Stim in a real-world clinical setting.
Clin Gastroenterol Hepatol. 2020;18:1987-1994). 13 Recently, the largest, prospective, multicenter registry for any drug or device in pediatric patients with pain associated DGBIs was published. It evaluated outcomes of pediatric patients (8-18 years) following a 4-week course of IB-Stim in a real-world clinical setting.
As part of the conversion to a Delaware corporation, the total number of shares of all classes of stock which the Corporation shall have authority to issue is 101,120,000 shares, consisting of (i) 100,000,000 shares of common stock, par value $0.001 per share, and (ii) 1,120,000 shares of Preferred Stock, par value $0.001 per share (“Preferred Stock”), 1,000,000 of which is designated as “Series A Preferred Stock” and 120,000 of which is designated as “Series Seed Preferred Stock”.
As part of the conversion to a Delaware corporation, the total number of shares of all classes of stock which the Corporation shall have authority to issue was 101,120,000 shares, consisting of (i) 100,000,000 shares of common stock, par value $0.001 per share, and (ii) 1,120,000 shares of Preferred Stock, par value $0.001 per share (“Preferred Stock”), 1,000,000 of which was designated as “Series A Preferred Stock” and 120,000 of which was designated as “Series Seed Preferred Stock”.
This study was published in the Lancet Gastroenterology Hepatology, (Kovacic K, et.al. Lancet Gastroenterol Hepatol. 2017;2:727-737). 13 A secondary endpoint in the same study used the functional disability index (FDI) to assess functional disability in those treated with PENFS and compared to sham treatment.
This study was published in the Lancet Gastroenterology Hepatology, (Kovacic K, et.al. Lancet Gastroenterol Hepatol. 2017;2:727-737). 12 A secondary endpoint in the same study used the functional disability index (FDI) to assess functional disability in those treated with PENFS and compared to sham treatment.
PMA applications are also subject to the payment of user fees, which for fiscal year 2021 includes a standard application fee of $365,657. 26 ● Overall, the FDA review of a PMA application generally takes between one and three years, but may take significantly longer.
PMA applications are also subject to the payment of user fees, which for fiscal year 2021 includes a standard application fee of $365,657. 27 ● Overall, the FDA review of a PMA application generally takes between one and three years, but may take significantly longer.
It is unclear how healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the ACA will impact the law or our business. 33 In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
It is unclear how healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the ACA will impact the law or our business. 34 In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
With controlled, repeatable, monitored production process, GMI has kit production capacity that is sufficient for all our projected needs. There is a new, dedicated, environmentally controlled build room built in 2022 for our equipment and production. All of our material are now maintained in this room.
With controlled, repeatable, monitored production process, GMI has kit production capacity that is sufficient for all our projected needs. There is a new, dedicated, environmentally controlled build room built in 2022 for our equipment and production. All of our materials are now maintained in this room.
The manufacturer may then apply the CE Mark to the device, which allows the device to be placed on the market throughout the EU. 29 Notified Body certificates of conformity are valid for a fixed duration (which shall not exceed five years).
The manufacturer may then apply the CE Mark to the device, which allows the device to be placed on the market throughout the EU. 30 Notified Body certificates of conformity are valid for a fixed duration (which shall not exceed five years).
The same underlying technology will be used for the remaining pipeline indications, but we may use a name other than “IB-Stim” for marketing and commercialization purposes. With one FDA indication—functional abdominal pain associated with IBS in adolescents 11-18 years old—on the market, additional clinical trials of PENFS in multiple pediatric conditions are underway focused on unmet healthcare needs in children.
The same underlying technology will be used for the remaining pipeline indications, but we may use a name other than “IB-Stim” for marketing and commercialization purposes. With one FDA indication—functional abdominal pain associated with IBS in adolescents 8-21 years old—on the market, additional clinical trials of PENFS in multiple pediatric conditions are underway focused on unmet healthcare needs in children.
Post-concussion syndrome: RCT currently enrolling patients. ClinicalTrials.gov Identifier: NCT04978571, A Prospective Study on the Effect of Auricular Percutaneous Electrical Nerve Field Stimulation (PENFS) in Patients with Post-Concussion Syndrome (PCS). A randomized, double blind, placebo-controlled trial to evaluate the efficacy of IB-Stim in children with post-concussion symptoms.
ClinicalTrials.gov Identifier: NCT04978571, A Prospective Study on the Effect of Auricular Percutaneous Electrical Nerve Field Stimulation (PENFS) in Patients with Post-Concussion Syndrome (PCS). A randomized, double blind, placebo-controlled trial to evaluate the efficacy of IB-Stim in children with post-concussion symptoms.
Furthermore, on September 9, 2021, the board authorized and increase of authorized shares of common stock from 10,800,000 to 13,400,000 in anticipation of a capital offering.
Furthermore, on September 9, 2021, the board authorized an increase of authorized shares of common stock from 10,800,000 to 13,400,000 in anticipation of a capital offering.
Nerve stimulator apparatus; nerve stimulator apparatus for FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co- morbidities, sleep disturbances, psychological disorders, including mood, anxiety, and satiety, pain control, headache control, control of phantom limb pain, stump pain, reflex sympathetic dystrophy (RSD), peripheral neuropathies and other types of sympathetically mediated pain Filed The Company has no unregistered trademarks.
Nerve stimulator apparatus; nerve stimulator apparatus for FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co- morbidities, sleep disturbances, psychological disorders, including mood, anxiety, and satiety, pain control, headache control, control of phantom limb pain, stump pain, reflex sympathetic dystrophy (RSD), peripheral neuropathies and other types of sympathetically mediated pain Filed: Allowed The Company has no core trademarks that are currently unregistered.
If the FDA agrees that the device is substantially equivalent, it will grant clearance to commercially market the device. 25 If the FDA determines that the device is substantially equivalent to a predicate device, it will grant 510(k) clearance to commercially market the device.
If the FDA agrees that the device is substantially equivalent, it will grant clearance to commercially market the device. 26 If the FDA determines that the device is substantially equivalent to a predicate device, it will grant 510(k) clearance to commercially market the device.
With one FDA indication (functional abdominal pain associated with IBS in adolescents 11-18 years old) on the market, additional clinical trials of PENFS in multiple pediatric conditions are underway focused on unmet healthcare needs in children, see “— Our Pipeline ” for more information.
With one FDA indication (functional abdominal pain associated with IBS in adolescents 8-21 years old) on the market, additional clinical trials of PENFS in multiple pediatric conditions are underway focused on unmet healthcare needs in children, see “ Our Pipeline ” for more information.
Nerve stimulator apparatus; nerve stimulator apparatus for FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co- morbidities, sleep disturbances, psychological disorders, including mood, anxiety, and satiety, pain control, headache control, control of phantom limb pain, stump pain, reflex sympathetic dystrophy (RSD), peripheral neuropathies and other types of sympathetically mediated pain Filed US NEURAXIS (STYLIZED) 10 Int.
Nerve stimulator apparatus; nerve stimulator apparatus for FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co- morbidities, sleep disturbances, psychological disorders, including mood, anxiety, and satiety, pain control, headache control, control of phantom limb pain, stump pain, reflex sympathetic dystrophy (RSD), peripheral neuropathies and other types of sympathetically mediated pain Filed: Allowed US NEURAXIS (STYLIZED) 97/356330 11-Apr-2022 10 Int.
We have developed three FDA cleared products, the IB-Stim (DEN180057, 2019), the NSS-2 Bridge (DEN170018, 2017), and the original 510(K) clearance (K140530, 2014), all of which were developed internally by the Company. ● The IB-Stim is a PENFS device that is indicated in patients 11-18 years of age with functional abdominal pain associated with irritable bowel syndrome.
We have developed three FDA cleared products, the IB-Stim (DEN180057, 2019), the RED (K242304, 2024), the NSS-2 Bridge (DEN170018, 2017), and the original 510(K) clearance (K140530, 2014), all of which were developed internally by the Company. ● The IB-Stim is a PENFS device that is indicated in patients 8-21 years of age with functional abdominal pain associated with irritable bowel syndrome.
Timing of FDA review and approval, if ever received, cannot be assured and the process and any approval is within the sole control and discretion of the FDA. 10 Products The IB-Stim is a percutaneous PENFS system intended to be used in patients 11-18 years of age with functional abdominal pain associated with IBS.
Timing of FDA review and approval, if ever received, cannot be assured and the process and any approval is within the sole control and discretion of the FDA. 9 Products The IB-Stim is a percutaneous PENFS system intended to be used in patients 8-21 years of age with functional abdominal pain associated with IBS.
To date, we have sold our IB-Stim product to approximately 57 children’s hospitals within our target market. 7 Competition The competitive landscape for therapies includes off-label drugs and drugs with FDA approved only for adults with IBS while there is no FDA indicated treatments for patients 11-18 years of age with functional abdominal pain associated with IBS and prescriptions often contain FDA black box labels.
To date, we have sold our IB-Stim product to approximately 77 children’s hospitals within our target market. 6 Competition The competitive landscape for therapies includes off-label drugs and drugs with FDA approved only for adults with IBS while there is no FDA indicated treatments for patients 8-21 years of age with functional abdominal pain associated with IBS and prescriptions often contain FDA black box labels.
Our first product, IB-Stim, is a PENFS system intended to be used in patients 11-18 years of age with functional abdominal pain associated with IBS.
Our first product, IB-Stim, is a PENFS system intended to be used in patients 8-21 years of age with functional abdominal pain associated with IBS.
The IB-Stim is intended to be used for 120 hours per week for three (3) consecutive weeks, and not to exceed four (4) weeks, through application to branches of Cranial Nerves V, VII, IX and X, and the occipital nerves identified by transillumination, as an aid in the reduction of pain when combined with other therapies for IBS (DEN180057, 2019).
The IB-Stim is intended to be used for 120 hours per week, using one (1) device per week, for four (4) consecutive weeks, through application to branches of Cranial Nerves V, VII, IX and X, and the occipital nerves identified by transillumination, as an aid in the reduction of pain when combined with other therapies for IBS (DEN180057, 2019).
A randomized, double blind, placebo-controlled trial to evaluate the efficacy of IB-Stim in children with functional nausea. The primary endpoint was to measure improvements in nausea using the Nausea Severity Scale after IB-Stim therapy compared to a placebo device. The study enrolled 110 participants and was conducted at Children’s Wisconsin/Medical College of Wisconsin. 9 2.
A randomized, double blind, placebo-controlled trial to evaluate the efficacy of IB-Stim in children with functional nausea. The primary endpoint was to measure improvements in nausea using the Nausea Severity Scale after IB-Stim therapy compared to a placebo device. The study enrolled 110 participants and was conducted at Children’s Wisconsin/Medical College of Wisconsin. 8 2. Post-concussion: RCT currently enrolling patients.
NNT means the number of patients that need to be treated for one patient to get the targeted improvement (≥30% improvement). 15 Reimbursement A PENFS procedure-specific Category III CPT Code (0720T) was published on December 30, 2021 and became effective for utilization on July 1,2022.
NNT means the number of patients that need to be treated for one patient to get the targeted improvement (≥30% improvement). 14 PENFS Reimbursement The American Medical Association (AMA) assigned a procedure-specific Category III CPT Code (0720T) to PENFS, which was published on December 30, 2021 and became effective for utilization on July 1, 2022.
Effect of percutaneous electrical nerve field stimulation on mechanosensitivity, sleep, and psychological comorbidities in adolescents with functional abdominal pain disorders. Neurogastroenterol Motil. 2022;34:e14358. We have only submitted one FDA De Novo request and have not submitted any additional 510(k) premarket notifications for our pipeline indications to date.
Effect of percutaneous electrical nerve field stimulation on mechanosensitivity, sleep, and psychological comorbidities in adolescents with functional abdominal pain disorders. Neurogastroenterol Motil. 2022;34:e14358. We have only submitted one FDA De Novo request and two 510(k) submissions and plan to submit additional 510(k) premarket notifications from our pipeline indications in the future.
We plan to extensively ramp-up our marketing efforts to patients and physicians as we gain additional indications. Patients/Customers Our current patient base is children 11-18 years of age and suffering from functional abdominal pain. Our customers are primarily children’s hospitals who serve these children. Intellectual Property Our intellectual property consists of patents, trademarks, and trade secrets.
We plan to extensively ramp-up our marketing efforts to patients and physicians as we gain additional indications. Patients/Customers Our current patient base is children 8-21 years of age and suffering from functional abdominal pain. Our customers are primarily children’s hospitals who serve these children.
There was a 65% decrease in the spontaneous firing of these neurons after 15 minutes of PENFS.This dampening of neurons in the CNS likely accounts for the modulation of pain responses in a model of post-inflammatory visceral and somatic hyperalgesia. 12 Clinical Data We have over 700 published patients specific to our first FDA indication which is functional abdominal pain associated with irritable bowel syndrome in patients 11-18 years of age.
This dampening of neurons in the CNS likely accounts for the modulation of pain responses in a model of post-inflammatory visceral and somatic hyperalgesia. 11 Clinical Data We have over 700 published patients specific to our first FDA indication which is functional abdominal pain associated with irritable bowel syndrome in patients 8-21 years of age.
Issue Date Anticipated Expiration Date Title Application Status Licensing Status US Neuraxis, Inc. 17/363620 30-Jun-2021 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME applied for US Neuraxis, Inc. 17/830411 02-Jun-2022 DEVICE AND METHOD FOR ERADICATING PATHOGENS IN NASAL PASSAGES applied for US Neuraxis, Inc. 17/589082 31-Jan-2022 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION AND AUDIO THERAPY DEVICE applied for US Neuraxis, Inc. 17/861646 11-Jul-2022 EXTERNAL AUDITORY CANAL THERAPY DEVICE applied for CA Neuraxis, Inc. 3143304 10-Dec-2021 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION DEVICE applied for CN Neuraxis, Inc. 202080060202.9 23-Jun-2020 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION DEVICE applied for EP Neuraxis, Inc. 20830917.9 10-Dec-2021 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION DEVICE applied for JP Neuraxis, Inc. 2021-576915 24-Dec-2021 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION DEVICE applied for US Neuraxis, Inc. 17/617364 08-Dec-2021 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION DEVICE applied for US Neuraxis, Inc. 15/488416 14-Apr-2017 10413719 17-Sep-2019 14-April-2037 METHODS OF TREATING DISEASE USING AURICULAR PERIPHERAL NERVE FIELD STIMULATION granted Out-licensed US Neuraxis, Inc. 16/534159 07-Aug-2019 11331473 17-May-2022 14-April-2037 METHODS OF TREATING DISEASE USING AURICULAR PERIPHERAL NERVE FIELD STIMULATION granted US Neuraxis, Inc. 15/595185 15-May-2017 9839577 12-Dec-2017 14-May-2034 SYSTEM AND METHOD FOR AURICULAR PERIPHERAL NERVE FIELD STIMULATION granted Out-licensed US Neuraxis, Inc. 15/811278 13-Nov-2017 10010479 03-Jul-2018 14-May-2034 SYSTEM AND METHOD FOR AURICULAR PERIPHERAL NERVE FIELD STIMULATION granted Out-licensed US Neuraxis, Inc. 14/277158 14-May-2014 9662269 30-May-2017 14-May-2034 SYSTEMS AND METHODS FOR AURICULAR PERIPHERAL NERVE FIELD STIMULATION granted Out-licensed US Neuraxis, Inc. 17/725,761 21-Apr-2022 AURICULAR NERVE FIELD STIMULATION DEVICE AND METHODS FOR USING THE SAME Pending 20 License Agreements TKBMN Exclusive License Agreement On May 7, 2020, the Company entered into an exclusive license agreement with TKBMN, LLC to obtain an exclusive license under certain patent rights (the “Patent Rights”) owned by TKBMN.
Issue Date Anticipated Expiration Date Title Application Status Licensing Status CA Neuraxis, Inc. 3096494 25-Apr-2019 AURICULAR NERVE FIELD STIMULATION DEVICE Applied for JP Neuraxis, Inc. 2021-509961 23-Oct-2020 7252319 27-March-2023 25-April-2039 AURICULAR NERVE FIELD STIMULATION DEVICE Granted US Neuraxis, Inc. 17/040766 23-Sep-2020 11369791 28-Jun-2022 21-Jun-2039 AURICULAR NERVE FIELD STIMULATION DEVICE Granted US Neuraxis, Inc. 17/715121 07-Apr-2022 12097371 24-Sept-2024 04-Jan-2040 AURICULAR NERVE FIELD STIMULATION DEVICE Granted US Neuraxis, Inc. 16/014169 21-Jun-2018 10322062 18-Jun-2019 14-May-2034 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME Granted Out-licensed US Neuraxis, Inc. 16/408004 09-May-2019 11077019 03-Aug-2021 16-July-2034 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME Granted Out-licensed US Neuraxis, Inc. 17/363620 30-Jun-2021 11654082 23-May-2023 29-July-2034 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME Granted Out-licensed US Neuraxis, Inc. 17/830411 02-Jun-2022 DEVICE AND METHOD FOR ERADICATING PATHOGENS IN NASAL PASSAGES Applied for US Neuraxis, Inc. 17/589082 31-Jan-2022 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION AND AUDIO THERAPY DEVICE Applied for 20 US Neuraxis, Inc. 17/861646 11-Jul-2022 EXTERNAL AUDITORY CANAL THERAPY DEVICE Applied for US Neuraxis, Inc. 17/617364 08-Dec-2021 EXTERNAL AUDITORY CANAL PHOTOBIOMODULATION DEVICE Applied for US Neuraxis, Inc. 15/488416 14-Apr-2017 10413719 17-Sep-2019 14-April-2037 METHODS OF TREATING DISEASE USING AURICULAR PERIPHERAL NERVE FIELD STIMULATION Granted Out-licensed US Neuraxis, Inc. 16/534159 07-Aug-2019 11331473 17-May-2022 14-April-2037 METHODS OF TREATING DISEASE USING AURICULAR PERIPHERAL NERVE FIELD STIMULATION Granted US Neuraxis, Inc. 15/595185 15-May-2017 9839577 12-Dec-2017 14-May-2034 SYSTEM AND METHOD FOR AURICULAR PERIPHERAL NERVE FIELD STIMULATION Granted Out-licensed US Neuraxis, Inc. 15/811278 13-Nov-2017 10010479 03-Jul-2018 14-May-2034 SYSTEM AND METHOD FOR AURICULAR PERIPHERAL NERVE FIELD STIMULATION Granted Out-licensed US Neuraxis, Inc. 14/277158 14-May-2014 9662269 30-May-2017 14-May-2034 SYSTEMS AND METHODS FOR AURICULAR PERIPHERAL NERVE FIELD STIMULATION Granted Out-licensed US Neuraxis, Inc. 17/725,761 21-Apr-2022 11813448 14-Nov-2023 14-April-2037 AURICULAR NERVE FIELD STIMULATION DEVICE AND METHODS FOR USING THE SAME Granted US Neuraxis, Inc. 18/154,375 13-Jan-2023 12029701 09-July-2024 14-May-2034 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME Granted Out-licensed US Neuraxis, Inc. 18/736,834 07-June-2024 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME Applied for Out-licensed US Neuraxis, Inc. 18/173,893 24-Feb-2023 AURICULAR NERVE FIELD STIMULATION DEVICE AND METHODS FOR USING THE SAME Applied for US Neuraxis, Inc. 18/377,968 09-Oct-2023 AURICULAR NERVE FIELD STIMULATION DEVICE AND METHODS FOR USING THE SAME Applied for CA Neuraxis, Inc. 3243826 07-Aug-2024 AURICULAR NERVE FIELD STIMULATION DEVICE AND METHODS FOR USING THE SAME Applied for 21 License Agreements TKBMN Exclusive License Agreement On May 7, 2020, the Company entered into an exclusive license agreement with TKBMN, LLC to obtain an exclusive license under certain patent rights (the “Patent Rights”) owned by TKBMN.
Employees As of December 31, 2023, we had 19 full-time employees.
Employees As of December 31, 2024, we had 21 full-time employees.
The total membership of these health insurers is approximately 9,000,000 covered lives; an additional health insurer, with approximately 7,000,000 members, will institute formal medical policy coverage for PENFS in the second quarter of 2024 bringing the total number of covered lives to approximately 16,000,000 over seven (7) commercial health insurers.
The total membership of these health insurers is approximately 45,000,000 covered lives. An additional health insurer, with approximately 6,000,000 members, will institute formal medical policy coverage for PENFS beginning the second quarter of 2025, bringing the total number of covered lives to approximately 51,000,000 across seventeen (17) commercial health insurers.
Patents The Company has eight (8) granted patents and nine (9) applied for patent applications in the United States and nine (9) applied for foreign patent applications. Country Owner Serial No. Actual Filing Date Patent No.
Patents The Company has twelve (12) granted patents in the United States and seven (7) applied for patent applications in the United States and one (1) granted foreign patent and two (2) applied for foreign patent applications. Country Owner Serial No. Actual Filing Date Patent No.
We also rely on the protection of laws regarding unregistered copyrights for certain content we create and trade secret laws to protect our proprietary technology.
To protect our intellectual property, we rely on a combination of laws and regulations, as well as contractual restrictions. Federal trademark law protects our registered trademarks. We also rely on the protection of laws regarding unregistered copyrights for certain content we create and trade secret laws to protect our proprietary technology.
No. Reg. Date Class/Goods Status US NEURAXIS 10 Int.
No. App. Date Class/Goods Status US NEURAXIS 97/327951 04-Mar-2022 10 Int.
IB-Stim is a US FDA Class II medical device that has received one regulatory clearance: IB-Stim (DEN180057, 2019), under the regulation name of “non-implanted nerve stimulator for functional abdominal pain relief.” Our Mission Our mission is to provide solutions that create value and provide better and safer patient outcomes.
IB-Stim is a US FDA Class II medical device that has received one regulatory clearance: IB-Stim (DEN180057, 2019), under the regulation name of “non-implanted nerve stimulator for functional abdominal pain relief.” Our second product, Rectal Expulsion Device (“RED”), is indicated to evaluate the neuromuscular function of a patient’s ability to expel its contents from the rectum and as a qualitative test for rectal hypersensitivity.
To further protect our intellectual property, we enter into confidentiality agreements with our executive officers and directors. 16 Trademarks The Company has 10 registered trademarks, eight (8) of which are being used in commerce: Country Trademark Reg. No. Reg.
To further protect our intellectual property, we enter into confidentiality agreements with our executive officers and directors. 17 Trademarks The Company has seven (7) registered trademarks, and two (2) allowed pending applications for registration: Country Trademark Reg. No. Reg.
The IB-Stim currently is the only product marketed and sold by the Company. ● The NSS-2 Bridge is a percutaneous nerve field stimulator, or PNFS, device indicated for use in the reduction of the symptoms of opioid withdrawal. The NSS-2 Bridge device was licensed to Masimo in April 2020, and we received a one-time licensing fee of $250,000 from Masimo.
The NSS-2 Bridge device was licensed to Masimo in April 2020, and we received a one-time licensing fee of $250,000 from Masimo.
We continue to work diligently with the American Academy of Pediatrics and other specialty medical societies on the pursuit of a Category I CPT Code for PENFS procedures. To expand patient access to PENFS procedures and IB-Stim technology, we launched our internal Prior Authorization team under our Guidance & Patient Support function in 2023.
Category III CPT Codes are temporary codes issued to define and track the utilization of new procedural technology. To expand patient access to PENFS procedures and IB-Stim technology, we launched our internal Prior Authorization team under our Guidance & Patient Support function in 2023.
Our trade secrets consist of product formulas, research, and development, and unpatentable know-how, all of which we seek to protect, in part, by confidentiality agreements. To protect our intellectual property, we rely on a combination of laws and regulations, as well as contractual restrictions. Federal trademark law protects our registered trademarks.
RED Reimbursement RED is billable under CPT 91120. The documentation is Rectal Hypersensitivity at 52-60mL: present/absent. Intellectual Property Our intellectual property consists of patents, trademarks, and trade secrets. Our trade secrets consist of product formulas, research, and development, and unpatentable know-how, all of which we seek to protect, in part, by confidentiality agreements.
This continues to address the Prior Authorization process barriers for providers and children’s hospitals and streamlines a patient’s access to our Patient Advocacy and Financial Assistance offerings, if needed. Six (6) commercial health insurers, including certain Blue Cross Blue Shield licensees, have instituted formal medical policy coverage for PENFS.
This continues to address the Prior Authorization process barriers for providers and children’s hospitals and streamlines a patient’s access to our Patient Advocacy and Financial Assistance offerings, if needed. In September of 2024, the AMA’s CPT Editorial Panel accepted addition of Category I CPT Code (placeholder 64X11) for PENFS and deletion of Category III CPT Code 0720T.
The ability of the IB-Stim to produce systemic effects by modulating the central nervous system has been demonstrated in a pre-clinical animal model of IBS (see Business— Pre-Clinical Data ).
Syncope=1 in sham group Castillo et.al., 2023 Irritable bowel syndrome 27 11-18 4 Abdominal pain, Microbiome Metabolism None Chogle et.al., 2023 Irritable bowel syndrome, functional dyspepsia 31 11-18 4 Quality of life, disability, anxiety None Krasaelap, et.al., 2020 Irritable bowel syndrome 51 11-18 4 Abdominal pain, global symptoms, disability None Santucci et.al.,2021 Functional abdominal pain 20 11-19 4 Abdominal pain, sleep, nausea, anxiety None Chogle et.al., 2023 (Registry) Irritable bowel syndrome, functional dyspepsia 292 8-18 4 Abdominal pain, nausea, disability None Santucci et.al.,2023 Irritable bowel syndrome, functional dyspepsia, FAP 101 11-21 4 Abdominal pain, nausea, disability None The ability of the IB-Stim to produce systemic effects by modulating the central nervous system has been demonstrated in a pre-clinical animal model of IBS (see Business— Pre-Clinical Data ).
Removed
See Neurostimulation for abdominal pain-related functional gastrointestinal disorders in adolescents: a randomized, double-blind, sham-controlled trial , Kovacic K, et.al., Lancet Gastroenterol Hepatol. 2017;2:727-737; Efficacy of Auricular Neurostimulation in Adolescents With Irritable Bowel Syndrome in a Randomized, Double-Blind Trial , Krasaelap A et.al., Clin Gastroenterol Hepatol. 2020;18:1987-1994; Effect of percutaneous electrical nerve field stimulation on mechanosensitivity, sleep, and psychological comorbidities in adolescents with functional abdominal pain disorders , Santucci et.al., Neurogastroenterol Motil. 2022;34:e14358.
Added
RED (K242304, 2024) helps identify patients with rectal hypersensitivity who experience a desire or urge to defecate at lower volumes of distension. RED is intended to be used in a clinical setting by trained health care providers in adult populations. Our Mission Our mission is to provide solutions that create value and provide better and safer patient outcomes.
Removed
Category III CPT Codes are temporary codes issued to define and track the utilization of new procedural technology. In collaboration with the American Medical Association, we withdrew our initial Category I CPT Code application submitted in 2023.
Added
On August 9, 2023, the Company consummated an initial public offering (“IPO”), conducted on a firm commitment basis, pursuant to which it sold 1,098,667 shares of its common stock at a price of $6.00 per share, resulting in gross proceeds to the Company of $6,592,002 .
Removed
Date Class/Goods Status US IB-STIM and Design 5926832 03-Dec-2019 10 Int. medical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; Medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered US IB-STIM AURICULAR STIMULATOR 5978411 04-Feb-2020 10 Int. medical apparatus, namely, electrical nerve stimulators; Medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; Medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; Medical device for peripheral nerve and nerve field stimulation; Medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; Medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered US IB-STIM AURICULAR STIMULATOR and Design 5978412 04-Feb-2020 10 Int. medical apparatus, namely, electrical nerve stimulators; medical device, namely, a non- implantable modulating frequency generator, providing neuromodulation therapy to cranial and peripheral nerves; medical apparatus consisting of percutaneously implantable arrays for transmitting current into auricular and peri-auricular tissue; medical device for peripheral nerve and nerve field stimulation; medical device consisting of a non-implantable modulating frequency generator and percutaneously implantable needle arrays for transmitting current into auricular and peri-auricular tissue for use in pain management and FGID (functional gastrointestinal disorders), namely, patient stimulator for auricular and peri-auricular peripheral nerve field neuromodulation therapy; medical apparatus, for peripheral nerve field stimulation in cranial and peripheral nerves and occipital nerve branches, for pain control, FGID, irritable bowel, functional dyspepsia, functional abdominal pain, nausea, functional nausea, abdominal migraine, Crohn’s Disease, visceral hypersensitivity, chronic inflammatory bowel disease, changes in FGID co-morbidities, sleep disturbances, psychological disorders, including mood and anxiety, satiety and changes in autonomic nervous system and other types of sympathetically mediated pain Registered 18 Country Trademark Reg.
Added
Net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses paid by the Company, were $4,110,721 . All shares sold in our IPO were registered pursuant to a registration statement on Form S-1 (File No. 333- 269179), as amended, declared effective by the SEC on August 9, 2023.
Removed
Issue Date Anticipated Expiration Date Title Application Status Licensing Status CA Neuraxis, Inc. 3096494 25-Apr-2019 AURICULAR NERVE FIELD STIMULATION DEVICE applied for CN Neuraxis, Inc. 201980027574.9 25-Apr-2019 AURICULAR NERVE FIELD STIMULATION DEVICE applied for EP Neuraxis, Inc. 19850021.7 25-Apr-2019 AURICULAR NERVE FIELD STIMULATION DEVICE applied for JP Neuraxis, Inc. 2021-509961 23-Oct-2020 AURICULAR NERVE FIELD STIMULATION DEVICE applied for KR Neuraxis, Inc. 10-2020-7034010 25-Apr-2019 AURICULAR NERVE FIELD STIMULATION DEVICE applied for US Neuraxis, Inc. 17/040766 23-Sep-2020 11369791 28-Jun-2022 21-Jun-2039 AURICULAR NERVE FIELD STIMULATION DEVICE granted US Neuraxis, Inc. 17/715121 07-Apr-2022 AURICULAR NERVE FIELD STIMULATION DEVICE applied for US Neuraxis, Inc. 63/314028 25-Feb-2022 AURICULAR NERVE FIELD STIMULATION DEVICE AND METHODS FOR USING THE SAME applied for US Neuraxis, Inc. 63/315371 01-Mar-2022 AURICULAR NERVE FIELD STIMULATION DEVICE AND METHODS FOR USING THE SAME applied for US Neuraxis, Inc. 16/014169 21-Jun-2018 10322062 18-Jun-2019 14-May-2034 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME granted Out-licensed US Neuraxis, Inc. 16/408004 09-May-2019 11077019 03-Aug-2021 14-May-2034 AURICULAR PERIPHERAL NERVE FIELD STIMULATOR AND METHOD OF OPERATING SAME granted Out-licensed 19 Country Owner Serial No.
Added
On August 15, 2024, the Company’s shareholders (i) authorized 5,000,000 shares of preferred stock of which 4,000,000 were designated at $0.001 par value “Series B Preferred Stock” inclusive of cumulative dividends, due and payable quarterly at the Company’s discretion either in cash or common stock when declared, at a rate of 8.5% per annum through June 30, 2025, (ii) retired 1,000,000 shares of Series A Preferred Stock and (iii) retired 120,000 shares of Series Seed Preferred Stock.
Added
On November 11, 2024, the holders of a majority of the then-outstanding shares of Series B Preferred Stock authorized (i) an increase in the number of designated Series B Preferred Stock to 5,000,000 shares and (ii) an extension of the 8.5% cumulative dividend period to December 31, 2026.
Added
The stated value of the Series B Preferred Stock is $2.38 per share.
Added
As of March 13, 2025, there are 4,280,939 shares of Series B Preferred Stock issued and outstanding, which are convertible (based on the stated value of each share and the conversion price both equalling $2.38) into 4,280,939 shares of common stock, subject to a maximum ownership cap of between 4.99% and 19.99% of the shares outstanding (following conversion by the holder) set at the discretion of each holder of Series B Preferred Stock.
Added
Each holder of Series B Preferred Stock is entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series B Preferred Stock held by such holder. Solely for purposes of voting rights, the conversion price is $3.80 per share.
Added
The 4,280,939 shares of Series B Preferred Stock outstanding therefore represent 2,681,208 votes of common stock, subject to a maximum voting percentage cap of between 4.99% and 19.99% of the votes outstanding (inclusive of all 2,681,208 votes plus the shares outstanding on the record date for any particular shareholder meeting) set at the discretion of each holder of Series B Preferred Stock.
Added
IB-Stim currently is one of two products marketed and sold by the Company. ● RED is indicated to evaluate the neuromuscular function and rectal hypersensitivity in patients with chronic constipation.
Added
RED is a point-of-care test that helps determine why patients may not respond to conventional laxative therapy and helps identify patients that will respond to pelvic floor therapy. ● The NSS-2 Bridge is a percutaneous nerve field stimulator, or PNFS, device indicated for use in the reduction of the symptoms of opioid withdrawal.
Added
The following table presents a summary of IB-STIM studies performed to date: Author DGBI N= Ages # of devices Outcomes Major adverse events Karento et al, 2023 Cyclic Vomiting Syndrome 30 8-18 years 6 Abdominal pain, nausea, FD None Santucci et al., 2023 Functional Dyspepsia 84 11-21 4 Abdominal pain, nausea, anxiety, disability None Bora et.al2,.2023 Irritable bowel syndrome 20 11-18 4 IBS severity scale, Microbiome diversity None Kovacic et.al.,2017 IBS, FD, FAP, abdominal migraine 115 11-18 4 Abdominal pain, disability, global symptoms.
Added
There was a 65% decrease in the spontaneous firing of these neurons after 15 minutes of PENFS.
Added
The finalized Category I CPT Code for PENFS, and associated valuations, will be announced publicly in Q4 of 2025. The new code will become effective for utilization on January 1, 2026. Sixteen (16) commercial health insurers, including certain Blue Cross Blue Shield licensees, have instituted formal medical policy coverage for PENFS.
Added
Rectal Expulsion Device (RED) The Rectal Expulsion Device (RED) enables comprehensive constipation care for every gastroenterology practice. The mission is to develop the best tool for clinical decision making with the physician and patient in mind. RED was designed to be the most efficient, accurate, and cost-effective diagnostic tool for patients with chronic constipation.
Added
The goal is for every Gastroenterologist practice to be able to safely and confidently perform meaningful anorectal testing without it impacting clinical workflow or requiring a large capital expense. Eight (8) million patients each year present with constipation. Of those eight million patients, 700,000 patients present to the Emergency Room.
Added
Clinical Background Constipation is one of the most encountered gastrointestinal complaints in clinical practice. A recent systematic review reported that the prevalence of chronic constipation (CC) in North America is between 10-15%. This condition causes significantly reduced quality of life, reduced work-related productivity and billions of dollars in health expenditures.
Added
Clinical practice guidelines recommend empiric treatment of chronically constipated patients with fiber supplements or laxative therapies. Approximately 40% of patients do not adequately respond to empiric laxative therapy. In these patients, anorectal physiology testing is essential.
Added
There is a clinical need for an easy-to-use, office-based, point-of-care, anorectal function test that can measure rectal sensitivity and be used as a rectal expulsion device to assess pelvic floor dysfunction. Current testing methods typically require elaborate volumetric testing equipment to assess sensation and expulsion, which makes them not practical in the clinical setting.
Added
The current standard is to refer patients to specialized motility centers for evaluation, resulting in sub-optimal number of patients with constipation undergoing anal-rectal testing.
Added
In the current clinical setting, only about 2% of all patients with constipation are referred for anal-rectal testing and thus, a large number with pelvic floor dysfunction and rectal hypersensitivity are missed and/or fail to get proper treatment.
Added
The design of RED allows for it to be used as a self-inflating expulsion device and as a balloon to assess patients who experience rectal hypersensitivity. When it is opened to atmospheric pressure, RED safely self inflates and contains a specially selected foam that mimics the “feel” of stool.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. Due to accounting resource constraints, we have had limited review controls.
Biggest changeOur internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. 46 We document, review and improve our internal controls and procedures for compliance with Section 404 of the Sarbanes-Oxley Act, which requires annual management assessment of the effectiveness of our internal control over financial reporting.
In particular, our products may not achieve market acceptance for current or future indications because of the following additional factors: ● achieving patient acceptance could be difficult because not all patients are willing to comply with requirements of treatment with our products, and other patients may forego our products for financial, privacy, cosmetic, visibility or mobility reasons; 38 ● achieving patient compliance may be difficult because the recommended use of our products is 120 hours per week for three (3) consecutive weeks, and not to exceed four (4) weeks, which to some extent restricts physical mobility because our products cannot be worn in all circumstances, and the patient or a caregiver must ensure that it remains continuously operable and this may also impact the pool of patients to whom physicians may be willing to prescribe our products; ● there may be certain perceived limitations to our study designs or data obtained from our clinical studies; ● efficacy may also be limited in instances where patients take a break from the device when experiencing skin rashes, or while bathing or swimming (because our products should not be immersed in water); and ● patients may decline therapy or prescribers may be unwilling to prescribe our products due to certain adverse events attributable to the device reported in clinical studies by patients treated with our products.
In particular, our products may not achieve market acceptance for current or future indications because of the following additional factors: ● achieving patient acceptance could be difficult because not all patients are willing to comply with requirements of treatment with our products, and other patients may forego our products for financial, privacy, cosmetic, visibility or mobility reasons; 39 ● achieving patient compliance may be difficult because the recommended use of our products is 120 hours per week for three (3) consecutive weeks, and not to exceed four (4) weeks, which to some extent restricts physical mobility because our products cannot be worn in all circumstances, and the patient or a caregiver must ensure that it remains continuously operable and this may also impact the pool of patients to whom physicians may be willing to prescribe our products; ● there may be certain perceived limitations to our study designs or data obtained from our clinical studies; ● efficacy may also be limited in instances where patients take a break from the device when experiencing skin rashes, or while bathing or swimming (because our products should not be immersed in water); and ● patients may decline therapy or prescribers may be unwilling to prescribe our products due to certain adverse events attributable to the device reported in clinical studies by patients treated with our products.
The commercial success of our products and our ability to generate and maintain revenues from the sale of our products will depend on a number of factors, including: ● our ability to develop and obtain additional regulatory clearances and further commercialize our products for additional indications; ● our ability to expand into new markets and future indications; ● the acceptance of our products by patients and the healthcare community, including physicians and third-party payers (both private and governmental), as therapeutically effective and safe; ● the accomplishment of various scientific, engineering, clinical, regulatory and other goals, which we sometimes refer to as milestones, on our anticipated timeline; 35 ● the relative cost, safety and efficacy of alternative therapies; ● our ability to obtain and maintain sufficient coverage or reimbursement by private and governmental third-party payers and to comply with applicable health care laws and regulations; ● the ability of our third-party manufacturers to manufacture our products in sufficient quantities with acceptable quality; ● our ability to provide marketing, distribution and customer support for our products; ● the potential presence of competitive products in our active indications; ● results of future clinical studies relating to our products or other competitor products for similar indications; ● compliance with applicable laws and regulatory requirements; ● the maintenance of our existing regulatory clearance; and ● the consequences of any reportable adverse events involving our products.
The commercial success of our products and our ability to generate and maintain revenues from the sale of our products will depend on a number of factors, including: ● our ability to develop and obtain additional regulatory clearances and further commercialize our products for additional indications; ● our ability to expand into new markets and future indications; ● the acceptance of our products by patients and the healthcare community, including physicians and third-party payers (both private and governmental), as therapeutically effective and safe; ● the accomplishment of various scientific, engineering, clinical, regulatory and other goals, which we sometimes refer to as milestones, on our anticipated timeline; 36 ● the relative cost, safety and efficacy of alternative therapies; ● our ability to obtain and maintain sufficient coverage or reimbursement by private and governmental third-party payers and to comply with applicable health care laws and regulations; ● the ability of our third-party manufacturers to manufacture our products in sufficient quantities with acceptable quality; ● our ability to provide marketing, distribution and customer support for our products; ● the potential presence of competitive products in our active indications; ● results of future clinical studies relating to our products or other competitor products for similar indications; ● compliance with applicable laws and regulatory requirements; ● the maintenance of our existing regulatory clearance; and ● the consequences of any reportable adverse events involving our products.
The extent to which the pandemic may impact our business and clinical studies will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing guidelines, business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease.
The extent to which a pandemic may impact our business and clinical studies will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing guidelines, business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease.
Additionally, when evaluating internal controls over financial reporting, the Company may identify additional material weaknesses that it may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act.
Additionally, when evaluating internal controls over financial reporting, the Company may identify material weaknesses that it may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act.
Our products and our systems and infrastructure face certain risks, including from cyber security breaches and data leakage . We increasingly rely upon technology systems and infrastructure. Our technology systems, including our products, are potentially vulnerable to breakdown or other interruption by fire, power loss, system malfunction, unauthorized access and other events.
Our products and our systems and infrastructure face certain risks, including cyber security breaches and data leakage . We increasingly rely upon technology systems and infrastructure. Our technology systems, including our products, are potentially vulnerable to breakdown or other interruption by fire, power loss, system malfunction, unauthorized access and other events.
Regardless of the merits or eventual outcome, liability claims may result in: ● decreased demand for our products; ● injury to our reputation; ● withdrawal of clinical study participants and inability to continue clinical studies; ● initiation of investigations by regulators; 46 ● costs to prepare for and defend the related litigation; ● a diversion of management’s time and our resources; ● substantial monetary awards to study participants or patients; ● product recalls, withdrawals or labeling, marketing or promotional restrictions; ● loss of revenues; ● exhaustion of any available insurance and our capital resources; ● the inability to commercialize any device candidate; and ● a decline in our share price.
Regardless of the merits or eventual outcome, liability claims may result in: ● decreased demand for our products; ● injury to our reputation; ● withdrawal of clinical study participants and inability to continue clinical studies; ● initiation of investigations by regulators; 47 ● costs to prepare for and defend the related litigation; ● a diversion of management’s time and our resources; ● substantial monetary awards to study participants or patients; ● product recalls, withdrawals or labeling, marketing or promotional restrictions; ● loss of revenues; ● exhaustion of any available insurance and our capital resources; ● the inability to commercialize any device candidate; and ● a decline in our share price.
If we experience any delay in the receipt or deficiency in the quality of products supplied to us by third-party suppliers, or if we have to switch to replacement suppliers, we may face additional regulatory delays and the manufacture and delivery of our products would be interrupted for an extended period of time, which would materially adversely affect our business, prospects, financial condition and results of operations. 40 We currently do not own a manufacturing facility and rely on a sole manufacturer for the production of our product .
If we experience any delay in the receipt or deficiency in the quality of products supplied to us by third-party suppliers, or if we have to switch to replacement suppliers, we may face additional regulatory delays and the manufacture and delivery of our products would be interrupted for an extended period of time, which would materially adversely affect our business, prospects, financial condition and results of operations. 41 We currently do not own a manufacturing facility and rely on a sole manufacturer for the production of our product .
If the restrictions under the lock-up agreements are waived, our common stock may become available for resale, subject to applicable law, including without notice, which could reduce the market price for our common stock. 58 Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock.
If the restrictions under the lock-up agreements are waived, our common stock may become available for resale, subject to applicable law, including without notice, which could reduce the market price for our common stock. 59 Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock.
We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock. 59 Because the Company is a “smaller reporting company,” we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company.
We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock. 60 Because the Company is a “smaller reporting company,” we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company.
Our failure to secure or maintain adequate coverage or reimbursement for our products by third-party payers in the U.S. or in the other jurisdictions in which we market our products could have a material adverse effect on our business, revenues and results of operations and cause our stock price to decline. 39 We may not be successful in maintaining reimbursement codes necessary to facilitate accurate and timely billing for our products or physician services attendant to our products .
Our failure to secure or maintain adequate coverage or reimbursement for our products by third-party payers in the U.S. or in the other jurisdictions in which we market our products could have a material adverse effect on our business, revenues and results of operations and cause our stock price to decline. 40 We may not be successful in maintaining reimbursement codes necessary to facilitate accurate and timely billing for our products or physician services attendant to our products .
Recalls of our products would divert managerial and financial resources and could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 53 If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions .
Recalls of our products would divert managerial and financial resources and could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 54 If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions .
In our future sales and distribution agreements with other companies, we generally may not have control over the resources or degree of effort that any of these third parties may devote to our products, and if they fail to devote sufficient time and resources to the marketing of our products, or if their performance is substandard, our revenues may be adversely affected. 37 The success of our business may be dependent on the actions of our collaborative partners.
In our future sales and distribution agreements with other companies, we generally may not have control over the resources or degree of effort that any of these third parties may devote to our products, and if they fail to devote sufficient time and resources to the marketing of our products, or if their performance is substandard, our revenues may be adversely affected. 38 The success of our business may be dependent on the actions of our collaborative partners.
Our failure or the failure of third-party participants in our studies to comply with their obligations to follow protocols and/or legal requirements may also result in our inability to use the affected data in our submissions to regulatory authorities. 36 The timely completion of clinical studies depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion.
Our failure or the failure of third-party participants in our studies to comply with their obligations to follow protocols and/or legal requirements may also result in our inability to use the affected data in our submissions to regulatory authorities. 37 The timely completion of clinical studies depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion.
Delays in receipt or failure to receive approvals/certification, or the failure to comply with any other existing or future regulatory requirements, could reduce our sales, profitability and future growth prospects. 51 In addition to FDA requirements, we will spend considerable time and money complying with other federal, state, local and foreign rules, regulations and guidance and, if we are unable to fully comply with such rules, regulations and guidance, we could face substantial penalties .
Delays in receipt or failure to receive approvals/certification, or the failure to comply with any other existing or future regulatory requirements, could reduce our sales, profitability and future growth prospects. 52 In addition to FDA requirements, we will spend considerable time and money complying with other federal, state, local and foreign rules, regulations and guidance and, if we are unable to fully comply with such rules, regulations and guidance, we could face substantial penalties .
Healthcare fraud and abuse laws also are complex and even minor, inadvertent irregularities, or even the perception of impropriety, can potentially give rise to claims that a statute has been violated. 52 Any violation of these laws could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline.
Healthcare fraud and abuse laws also are complex and even minor, inadvertent irregularities, or even the perception of impropriety, can potentially give rise to claims that a statute has been violated. 53 Any violation of these laws could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline.
Accordingly, patent applications assigned to us may not result in patents being issued, any issued patents assigned to us may not provide us with competitive protection or may be challenged by others, and the current or future granted patents of others may have an adverse effect on our ability to do business and achieve profitability. 56 Moreover, others may independently develop similar products, may duplicate our products, or may design around our patent rights.
Accordingly, patent applications assigned to us may not result in patents being issued, any issued patents assigned to us may not provide us with competitive protection or may be challenged by others, and the current or future granted patents of others may have an adverse effect on our ability to do business and achieve profitability. 57 Moreover, others may independently develop similar products, may duplicate our products, or may design around our patent rights.
The occurrence of any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 50 Over time, we expect to make modifications to our products that are designed to improve efficacy, reduce side effects, enhance the user experience or for other purposes.
The occurrence of any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 51 Over time, we expect to make modifications to our products that are designed to improve efficacy, reduce side effects, enhance the user experience or for other purposes.
Investors must be willing to accept a substantial degree of uncertainty and must be willing to rely upon the Company’s board of directors and management to complete an appropriate business strategy to commercially exploit targeted business opportunities. 44 We may not be able to compete with treatments now being marketed and developed, or which may be developed and marketed in the future by other companies.
Investors must be willing to accept a substantial degree of uncertainty and must be willing to rely upon the Company’s board of directors and management to complete an appropriate business strategy to commercially exploit targeted business opportunities. 45 We may not be able to compete with treatments now being marketed and developed, or which may be developed and marketed in the future by other companies.
Third-party payers, healthcare systems, government agencies or other groups often issue reimbursement codes to facilitate billing for products and physician services used in the delivery of healthcare. Our technology specific CAT III CPT Code (0720T) was published on December 30, 2021 and effective on July 1, 2022.
Third-party payers, healthcare systems, government agencies or other groups often issue reimbursement codes to facilitate billing for products and physician services used in the delivery of healthcare. Our IB-STIM technology specific CAT III CPT Code (0720T) was published on December 30, 2021 and effective on July 1, 2022.
This could also result in litigation, fines, penalties and adverse publicity that could cause reputational harm and loss of customer trust, which could have a material adverse effect on our business, financial condition and results of operations. 47 We are increasingly dependent on information technology systems and are subject to privacy and security laws.
This could also result in litigation, fines, penalties and adverse publicity that could cause reputational harm and loss of customer trust, which could have a material adverse effect on our business, financial condition and results of operations. 48 We are increasingly dependent on information technology systems and are subject to privacy and security laws.
Although IB-Stim already has market clearance from FDA for functional abdominal pain associated with IBS in children, we will require additional FDA clearances to market our products for treating other indications. 49 In addition, before our products can be marketed in the EU, our products must obtain a CE Certificate from a notified body.
Although IB-Stim already has market clearance from FDA for functional abdominal pain associated with IBS in children, we will require additional FDA clearances to market our products for treating other indications. 50 In addition, before our products can be marketed in the EU, our products must obtain a CE Certificate from a notified body.
The failure of these third parties to carry out their obligations could delay or prevent the development, approval, and commercialization of our product candidates or result in enforcement action against us. 57 Risks Related to Our Common Stock We may not be able to maintain a listing of our common stock on NYSE American.
The failure of these third parties to carry out their obligations could delay or prevent the development, approval, and commercialization of our product candidates or result in enforcement action against us. 58 Risks Related to Our Common Stock We may not be able to maintain a listing of our common stock on NYSE American.
Failure to do so could materially harm our business. 42 Customer or third-party complaints or negative reviews or publicity about our company or our products could harm our reputation and brand. We are heavily dependent on customers who use our IB-Stim device to provide good reviews and word-of-mouth recommendations to contribute to our growth.
Failure to do so could materially harm our business. 43 Customer or third-party complaints or negative reviews or publicity about our company or our products could harm our reputation and brand. We are heavily dependent on customers who use our IB-Stim device to provide good reviews and word-of-mouth recommendations to contribute to our growth.
Depending on decisions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could further negatively impact the value of our patents, narrow the scope of available patent protection or weaken the rights of patent owners. 55 Future regulatory action remains uncertain.
Depending on decisions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could further negatively impact the value of our patents, narrow the scope of available patent protection or weaken the rights of patent owners. 56 Future regulatory action remains uncertain.
Any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 41 As we expand, we may experience difficulties managing our growth . Our anticipated growth will place a significant strain on our management and on our operational and financial resources and systems.
Any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 42 As we expand, we may experience difficulties managing our growth . Our anticipated growth will place a significant strain on our management and on our operational and financial resources and systems.
In the future, our insurance coverage may be expensive or not be available on acceptable terms or in sufficient amounts, if at all. 48 We may choose to, or may be required to, suspend, repeat or terminate our clinical studies if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the studies are not well designed .
In the future, our insurance coverage may be expensive or not be available on acceptable terms or in sufficient amounts, if at all. 49 We may choose to, or may be required to, suspend, repeat or terminate our clinical studies if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the studies are not well designed .
As the COVID-19 pandemic continues around the globe, we have experienced and will likely continue to experience disruptions that could severely impact our business and clinical studies, which could include: ● delays and/or difficulties in onboarding active patients and enrolling patients in our clinical studies; ● delays and/or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● declines in prescriptions written due to a perception that our products are difficult to administer remotely or if patients are unwilling to travel to treatment sites or receive in-home treatment assistance from us or other caregivers; ● reductions in third-party reimbursements, which could materially affect our revenue, as most of our patients rely on third-party payers to cover the cost of our products and a material number of our patients could lose access to their private health insurance plan if they or someone in their family lose their job; ● diversion of healthcare resources away from conducting clinical studies, including the diversion of hospitals serving as our clinical study sites and hospital staff supporting the conduct of our clinical studies; 43 ● interruption of key clinical study activities, such as clinical study site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; ● staff disruptions and turnover internally and at treatment sites and third-party providers who provide support, either directly as a result of illness or indirectly as a result of vaccine mandates and other changes in terms of employment; ● delays in receiving approval from local regulatory authorities or IRBs to initiate our planned clinical studies; ● delays in clinical sites receiving the supplies and materials needed to conduct our clinical studies; ● interruption in shipping that may affect the transport of active patient and clinical study materials; ● changes in local regulations as part of a response to the COVID-19 outbreak that may require us to change the ways in which our clinical studies are conducted, which may result in unexpected costs, or to discontinue the clinical studies altogether; ● delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; ● disruption of our supply chain as our suppliers and common carriers are unable to meet our requirements to provide us the materials we need for clinical study and active patient care needs; ● indirect consequences of the COVID-19 pandemic on the economy in general, such as an increase in bankruptcies of our key suppliers, or the inability of our third-party payers to meet their obligations reimburse us in a timely fashion or at all; ● postponements and cancellations of key conferences and meetings and travel restrictions could interfere with our ability to interact with key thought leaders in the field, leading to a disruption in the rate of adoption of our technology; ● access restrictions at offices, hospitals, and treatment centers, and stakeholder illness could interfere with the ability of our sales force to engage in face-to-face visits with providers, leading to a disruption in the rate of adoption of our technology; ● increases in expenditures for technology and other tools necessary to provide patient care in an environment where both patient and care-giver travel is restricted and access to in-person interaction is limited; ● refusal of the FDA to accept data from clinical studies in affected geographies outside the United States; and ● patient delays in seeking or receiving treatment, either due to fear of infection or lack of access to treatment and study sites, leading to fewer diagnoses of the indications our products are approved to treat or more advanced procession of the disease, which may contraindicate the use of our products or disqualify the patient from participating in a given study.
A pandemic could disruption and impact our business and clinical studies, which could include: ● delays and/or difficulties in onboarding active patients and enrolling patients in our clinical studies; ● delays and/or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● declines in prescriptions written due to a perception that our products are difficult to administer remotely or if patients are unwilling to travel to treatment sites or receive in-home treatment assistance from us or other caregivers; ● reductions in third-party reimbursements, which could materially affect our revenue, as most of our patients rely on third-party payers to cover the cost of our products and a material number of our patients could lose access to their private health insurance plan if they or someone in their family lose their job; ● diversion of healthcare resources away from conducting clinical studies, including the diversion of hospitals serving as our clinical study sites and hospital staff supporting the conduct of our clinical studies; 44 ● interruption of key clinical study activities, such as clinical study site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; ● staff disruptions and turnover internally and at treatment sites and third-party providers who provide support, either directly as a result of illness or indirectly as a result of vaccine mandates and other changes in terms of employment; ● delays in receiving approval from local regulatory authorities or IRBs to initiate our planned clinical studies; ● delays in clinical sites receiving the supplies and materials needed to conduct our clinical studies; ● interruption in shipping that may affect the transport of active patient and clinical study materials; ● changes in local regulations as part of a response to a pandemic that may require us to change the ways in which our clinical studies are conducted, which may result in unexpected costs, or to discontinue the clinical studies altogether; ● delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; ● disruption of our supply chain as our suppliers and common carriers are unable to meet our requirements to provide us the materials we need for clinical study and active patient care needs; ● indirect consequences of a pandemic on the economy in general, such as an increase in bankruptcies of our key suppliers, or the inability of our third-party payers to meet their obligations reimburse us in a timely fashion or at all; ● postponements and cancellations of key conferences and meetings and travel restrictions could interfere with our ability to interact with key thought leaders in the field, leading to a disruption in the rate of adoption of our technology; ● access restrictions at offices, hospitals, and treatment centers, and stakeholder illness could interfere with the ability of our sales force to engage in face-to-face visits with providers, leading to a disruption in the rate of adoption of our technology; ● increases in expenditures for technology and other tools necessary to provide patient care in an environment where both patient and care-giver travel is restricted and access to in-person interaction is limited; ● refusal of the FDA to accept data from clinical studies in affected geographies outside the United States; and ● patient delays in seeking or receiving treatment, either due to fear of infection or lack of access to treatment and study sites, leading to fewer diagnoses of the indications our products are approved to treat or more advanced procession of the disease, which may contraindicate the use of our products or disqualify the patient from participating in a given study.
ITEM 1A. RISK FACTORS Risks Relating to Our Business and Our Product Our business and prospects depend entirely on our current product, IB-Stim. Even though we have received FDA clearance for our product, it will remain subject to ongoing regulatory review.
ITEM 1A. RISK FACTORS Risks Relating to Our Business and Our Product Our business and prospects depend entirely on our current products, IB-Stim and RED. Even though we have received FDA clearance for our products, it will remain subject to ongoing regulatory review.
Any of these events could negatively affect our business, prospects, financial condition and results of operations. 54 Third parties may assert that our products, the methods employed in the use of our products or other activities infringe on their patents.
Any of these events could negatively affect our business, prospects, financial condition and results of operations. 55 Third parties may assert that our products, the methods employed in the use of our products or other activities infringe on their patents.
The response to the pandemic may result in permanent changes to the environment in which we operate as described above in ways we are unable to predict. The COVID-19 pandemic may also have the effect of heightening many of the other risks described herein. Developing medical technology entails significant technical, regulatory and business risks .
The response to a pandemic may result in permanent changes to the environment in which we operate as described above in ways we are unable to predict. A pandemic may also have the effect of heightening many of the other risks described herein. Developing medical technology entails significant technical, regulatory and business risks .
In addition, if the Company fails to remediate any material weakness, including the material weaknesses described above, our financial statements could be inaccurate and the Company could face restricted access to capital markets. Our small size and internal control deficiencies may adversely affect our financial condition, results of operation and access to capital.
In addition, if the Company fails to remediate any identified material weakness, our financial statements could be inaccurate and the Company could face restricted access to capital markets. Our small size and internal control deficiencies may adversely affect our financial condition, results of operation and access to capital.
We may not be able to maintain the CPT code for physician services related to our products.
RED is billable under Category I CPT Code 91120. We may not be able to maintain the CPT code for physician services related to our products.
We have material weaknesses in our internal control over financing reporting. If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.
We had material weaknesses in our internal control over financing reporting during the years ended December 31, 2024 and 2023, that are unremediated as of December 31, 2024. If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.
The COVID-19 pandemic could materially adversely impact our business .
A pandemic could materially adversely impact our business .
Testing and maintaining internal controls can divert our management’s attention from other matters that are important to the operation of our business.
To comply with the requirements of being a public company, the Company has undertaken various actions to implement internal controls and procedures. Testing and maintaining internal controls can divert our management’s attention from other matters that are important to the operation of our business.
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The global status of the COVID-19 pandemic continues to rapidly evolve.
Added
In September of 2024, the AMA’s CPT Editorial Panel accepted addition of Category I CPT Code (placeholder 64X11) for PENFS and deletion of Category III CPT Code 0720T. The finalized Category I CPT Code for PENFS, and associated valuations, will be announced publicly in Q4 of 2025. The new code will become effective for utilization on January 1, 2026.
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These constraints have resulted in (1) a lack of segregation of duties, since we have a limited administrative staff, (2) lack of internal controls structure review and (3) misapplication of U.S. GAAP.
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As a result of these constraints and the restatement our unaudited financial statements as of and for the three and nine month periods ended September 30, 2023, management concluded material weaknesses in our internal control over financial reporting existed as of December 31 2023 and, accordingly, our internal control over financial reporting and disclosure controls and procedures were not effective as of such date.
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Specifically, management identified a material accounting error that understated extinguishment of debt expense and net loss in the Statements of Operations and understated additional paid in capital in the Balance Sheet as of and for the three and nine month periods ended September 30, 2023 as described and restated in Note 19 to the audited financial statements included in this Form 10-K.
Removed
Our management is composed of a small number of individuals resulting in a situation where limitations on segregation of duties exist. All responsibility for accounting entries and the creation of financial statements is held by a single person, though the Company engages multiple accounting consultants for accounting, tax and audit support.
Removed
To remedy this situation, we would need to hire additional staff or financial consultant support. 45 We document, review and improve our internal controls and procedures for compliance with Section 404 of the Sarbanes-Oxley Act, which require annual management assessment of the effectiveness of our internal control over financial reporting.
Removed
To comply with the requirements of being a public company, the Company has undertaken various actions, and will take additional actions, such as remediating the material weaknesses described above, implementing additional internal controls and procedures and hiring internal audit staff or financial consultants.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur key cybersecurity processes include the following: ● Risk-based controls for information systems and information on NeurAxis’ networks: We seek to maintain an information technology infrastructure that implements physical, administrative and technical controls that are calibrated based on risk and designed to protect the confidentiality, integrity and availability of our information systems and information stored on NeurAxis’ networks, including customer information, personal information, PHI/PII, intellectual property and proprietary information. ● Cybersecurity incident policies: We have cybersecurity incident policies, an incident response plan and a dedicated team to respond to cybersecurity incidents, including experienced counsel.
Biggest changeOur key cybersecurity processes include the following: ● Risk-based controls for information systems and information on NeurAxis’ networks: We seek to maintain an information technology infrastructure that implements physical, administrative and technical controls that are calibrated based on risk and designed to protect the confidentiality, integrity and availability of our information systems and information stored on NeurAxis’ networks, including customer information, personal information, PHI/PII, intellectual property and proprietary information.
NeurAxis, through experienced cybersecurity and HIPAA/HITECH counsel, has developed a security manual and a privacy policy. 60 ● Training: We provide security awareness training to help our employees understand their information protection and cybersecurity responsibilities at NeurAxis.
NeurAxis, through experienced cybersecurity and HIPAA/HITECH counsel, has developed a security manual and a privacy policy. 61 ● Training: We provide security awareness training to help our employees understand their information protection and cybersecurity responsibilities at NeurAxis.
The Security Officer has over 12 years of experience in managing and leading IT or cybersecurity teams and participates in various cyber security trainings frequently.
The Security Officer has over 13 years of experience in managing and leading IT or cybersecurity teams and participates in various cyber security trainings frequently.
We face certain ongoing risks from cybersecurity threats, including active interactions with children’s hospitals while assisting with insurance prior approvals, that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, cash flows or financial condition. CYBERSECURITY GOVERNANCE. NeurAxis’ Board of Directors is responsible for oversight of cybersecurity risk.
We face certain ongoing risks from cybersecurity threats, including active interactions with children’s hospitals while assisting with insurance prior approvals, that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, cash flows or financial condition.
NeurAxis has a “real time” cybersecurity partner that monitors our servers 24/7/365 for any attempted intrusions. We have not identified risks from known cybersecurity threats, that have materially affected us, including our operations, business strategy, results of operations, cash flows or financial condition.
We have not identified risks from known cybersecurity threats, that have materially affected us, including our operations, business strategy, results of operations, cash flows or financial condition.
Added
NeurAxis added physical safeguards in the form of biometric entry systems to access server rooms and 24/7 surveillance at both NeurAxis locations. ● Cybersecurity incident policies: We have cybersecurity incident policies, an incident response plan and a dedicated team to respond to cybersecurity incidents, including experienced counsel.
Added
NeurAxis has a “real time” cybersecurity partner that monitors our servers 24/7/365 for any attempted intrusions. NeurAxis routinely reviews the Office of Civil Right (OCR) audit requirements to assess any gaps within our cybersecurity, privacy and security programs.
Added
As of the fiscal year ended December 31, 2024, the Company had not experienced any material cybersecurity incidents that have had a significant impact on our operations, data integrity, results of operations, or financial performance. CYBERSECURITY GOVERNANCE. NeurAxis’ Board of Directors is responsible for oversight of cybersecurity risk.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease office space in Versailles, Indiana, pursuant to two lease agreements with Hashbo Properties, LLC. The original lease term of each agreement commenced January 1, 2022 for a period of one year with automatic one year renewals unless termination notice is provided 60 days in advance.
Biggest changeWe also lease office space in Versailles, Indiana, pursuant to an agreement that commenced January 1, 2022 for a term of one year with automatic one year renewal options, unless 60 day notice of vacating is given. The monthly base rent is $1,800 with an annual 4% escalator upon renewal. 62
The term of this lease commenced on January 1, 2024 and is scheduled to end on May 31, 2029. Over the term of the lease, the monthly base rent is $6,721 with an annual 2.5% escalator. We received a 50% reduction in our monthly rent for the first 10 months of the lease.
Over the term of the lease, the monthly base rent is $6,721 with an annual 2.5% escalator. We received a 50% reduction in our monthly rent for the first 10 months of the lease.
ITEM 2. PROPERTIES O ur corporate headquarters are located in Carmel, Indiana, where we lease office space for employees, pursuant to a lease agreement with SePRO Development Company II, LLC. The term of this lease commenced on March 1, 2021 and ended on February, 28, 2024.
ITEM 2. PROPERTIES Our corporate headquarters are located in Carmel, Indiana, where we lease office space for employees, pursuant to a lease agreement with Zeller-Carmel Property, LLC. The term of this lease commenced on January 1, 2024 and is scheduled to end on May 31, 2029.
Removed
Over the term of the lease, monthly base rent was $1,676 through March 1, 2023 and $1,717 thereafter. Prior to the end of the lease term, the Company moved its corporate headquarters to another location in Carmel, Indiana, pursuant to a lease agreement with Zeller-Carmel Property, LLC.
Removed
The monthly base rent is $2,308 with an annual 4% escalator upon renewal. 61

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

7 edited+2 added−2 removed7 unchanged
Biggest changeOn June 14, 2022, the Court granted the Company’s motion for summary judgment and dismissed the Complaint. On July 14, 2022, plaintiffs Ritu Bhambhani and Sudhir Rao filed a notice of appeal with the Fourth Circuit Court of Appeals. The Company filed a motion to dismiss.
Biggest changeOn June 14, 2022, the Court granted the Company’s motion for summary judgment and dismissed the Complaint. On July 14, 2022, plaintiffs Ritu Bhambhani and Sudhir Rao filed a notice of appeal with the Fourth Circuit Court of Appeals. On June 3, 2024, the Fourth Circuit denied the plaintiff’s appeal and entered judgment against the plaintiffs.
The remaining claims are still pending, and no trial date has been set for the case. The Court has vacated its Scheduling Order at the parties’ request so that the parties could try to resolve the disputes in both cases through an independent third-party mediator. No mediation date has been set.
The remaining claims are still pending, and no trial date has been set for the case. The Court has vacated its Scheduling Order at the parties’ request so that the parties could try to resolve the disputes in both cases through an independent third-party mediator.
On July 14, 2022, plaintiffs Ritu Bhambhani, LLC; Box Hill Surgery Center, LLC; Pain and Spine Specialists of Maryland, LLC; and SimCare ASC, LLC initiated a lawsuit against the Company and others in the United States District Court for the District of Maryland.
Also on July 14, 2022, plaintiffs Ritu Bhambhani, LLC; Box Hill Surgery Center, LLC; Pain and Spine Specialists of Maryland, LLC; and SimCare ASC, LLC initiated a lawsuit against the Company and others in the United States District Court for the District of Maryland.
Plaintiffs claim to have suffered damages when Medicare administrative contractors declined to pay plaintiffs for their use of the device. On September 28, 2022, the Company filed a motion to dismiss all claims. On May 25, 2023, the Court issued an Order and a Memorandum Opinion which dismissed the plaintiffs’claims related to the RICO Act.
Plaintiffs claim to have suffered damages when Medicare administrative contractors declined to pay plaintiffs for their use of the device. On September 28, 2022, the Company filed a motion to dismiss all claims. On May 25, 2023, the Court issued an Order and a Memorandum Opinion which dismissed the plaintiffs’ claims related to the RICO Act.
The Complaint states that the Company, distributors of the Company’s product, and medical billing and coding consultants allegedly made misrepresentations to the plaintiffs that the Company’s NeuroStim device and related procedures could be billed to, and reimbursed by, Medicare and other insurance payors as a surgically implantable neurostimulator.
The Complaint stated that the Company, distributors of the Company’s product, and medical billing and coding consultants allegedly made misrepresentations to the plaintiffs that the Company’s NeuroStim device and related procedures could be billed to, and reimbursed by, Medicare and other insurance payors as a surgically implantable neurostimulator.
As of April 16, 2024, other than those described below, there were no pending or threatened legal proceedings that could reasonably be expected to have a material effect on the results of the Company’s operations.
As of the date of issuance, other than those described below, there were no pending or threatened legal proceedings that could reasonably be expected to have a material effect on the results of the Company’s operations.
While it is too early to predict the ultimate outcome of this matter, we believe the Company has meritorious defenses and intends to defend this matter vigorously. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 62 PART II
While it is too early to predict the ultimate outcome of these matters, we believe the Company has meritorious defenses and intends to defend these matters vigorously. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Removed
On January 4, 2023, the Court issued an order that stated it was deferring a ruling on the motion to dismiss the appeal and that it would address those arguments at the same time that it addressed the substantive merits of the case.
Added
On June 25, 2024, the Fourth Circuit entered its mandate declaring that its judgment against the plaintiffs took effect that day. The plaintiffs did not seek any further review or appeal of that judgment.
Removed
While it is too early to predict the ultimate outcome of this matter, we continue to believe we have meritorious defenses, that the dismissal of the Complaint should be upheld, and intend to continue to defend this matter vigorously.
Added
Mediation has not yet resulted in a resolution of the case. 63 In January 2024, Dr. Arturo Taca served notice to the Company that asserted an interest in its U.S. Patent No. 10,413,719 valued at $2,000,000 based on his own work in neurostimulation. The Company denied both the neurostimulation patent and compensation claims. The case remains unresolved.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 62 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 63 Item 6. Reserved 63 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 64 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 64 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 64 Item 6. Reserved 64 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 65
Removed
Financial Statements and Supplementary Data 68 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 68 Item 9A. Controls and Procedures 68 Item 9B. Other Information 69

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+3 added−6 removed2 unchanged
Biggest changeRecent Sales of Unregistered Securities On November 9, 2023, the Company entered into a securities purchase agreement (the “SPA”) with Flagstaff International, LLC (“Flagstaff International”) for the issuance and purchase of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock Financing”), at price per share of $2.38 (the “Series B Preferred Financing”).
Biggest changeRecent Sales of Unregistered Securities On November 14, 2024, the Company entered into security purchase agreements with five accredited investors for the issuance and purchase of 45,653 shares of the Company’s Series B Preferred Stock, par value $0.001 per share, for an aggregate purchase price of $108,664.
The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries and holders of unissued shares common stock. The last reported sales price for our Common Stock as reported on the NYSE American on April 12, 2024 was $3.10.
The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries and holders of unissued shares common stock. The last reported sales price for our Common Stock as reported on the NYSE American on March 13, 2025 was $2.10.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders of Common Stock Our common stock is listed on the NYSE American, under the symbol “NRXS”. As of April 12, 2024, there were approximately 425 record holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders of Common Stock Our common stock is listed on the NYSE American, under the symbol “NRXS”. As of March 13, 2025, there were approximately 682 record holders of our common stock.
Removed
The aggregate purchase price is $3,000,000, to be paid in 15 monthly installments of $200,000 each, commencing on the later of January 10, 2024 or a date after stockholders approve of an amendment to the Company’s Certificate of Incorporation to authorize the creation of the Series B Preferred Stock (the “Stockholder Approval”).
Added
On December 26, 2024, the Company issued 10,000 shares of common stock to an accredited investor for their services in bringing RED to market. On January 3, 2025 and March 6, 2025, the Company granted 360,902 and 373,275 restricted stock units (RSUs), respectively, to certain employees pursuant to the 2022 NeurAxis, Inc.
Removed
The Series B Preferred Stock is convertible at any time into shares of common stock of the Company without any further consideration. The closing of this transaction is subject to the Stockholder Approval following which the Company will file the Series B Preferred Stock Certificate of Designation with the Secretary of State of the State of Delaware.
Added
Omnibus Securities and Incentive Plan, as amended on August 15, 2024. The RSUs vest annually over a three-year cliff-vesting period and are payable in shares of the Company’s common stock. The RSUs fully vest upon (i) death or disability or (ii) change of control. Dividend equivalents accrue on RSUs and are paid upon vesting.
Removed
Following the issuance of the Series B Preferred Stock, it will rank senior to the common stock with respect to payments upon the liquidation, dissolution and winding up of the Company. As of December 31, 2023, Flagstaff International, LLC has not yet paid for or been issued any Series B Preferred Stock shares.
Added
On January 17, 2025, the Company issued (i) 39,471 shares of common stock to its independent board members for their service from April 1, 2024 through December 31, 2024 and (ii) 186,166 shares of common stock to an accredited investor upon conversion of 502,647 common stock warrants in a cash less exercise transaction.
Removed
The Company previously issued (i) warrants exercisable for an aggregate of 793,655 shares of common stock with an exercise price of $5.25 per share to Leonite Fund I, LP, Emmis Capital II, LLC, Bigger Capital Fund, LP, District 2 Capital Fund, LP, and Exchange Listing, from June through November 2022 (the “2022 Warrants”), (ii) warrants exercisable for an aggregate of 505,570 shares of common stock with a strike price at $5.25 per share to certain investors from March through July 2023 (the “the 2023 Warrants”), and (iii) 120,235 warrants to the placement agent for the 2023 financing with the same terms as the 2023 Warrants (the “PA Warrants”, and together with the 2022 Warrants and the 2023 Warrants, the “Warrants”).
Removed
In connection with the Series B Preferred Stock Financing, pursuant to Section 2(c) of the 2022 Warrants and pursuant to Section 3(b) of the 2023 Warrants and the PA Warrants, as a result of the execution of the SPA, the Company adjusted the exercise price of each Warrant to $2.38 per share and issued (i) new 2023 Warrants to purchase 609,760 shares of common stock and (ii) new PA Warrants to purchase 144,990 shares of common stock pursuant to Section 3(b) of such warrants.
Removed
The number of shares of the Company’s common stock issuable upon exercise of the 2022 Warrants remain unchanged.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

22 edited+6 added−5 removed11 unchanged
Biggest changeOperating Loss Our operating loss increased $3,292,257, or 97.6%, to $6,664,495 in the year ended December 31, 2023 primarily due to lower sales volume and higher general and administrative expenses. 66 Other (Expense) Income Other expense increased $6,554,365, or 465.6%, to $7,962,188 in the year ended December 31, 2023 due to the full amortization of the unamortized debt discount upon the IPO, a loss on the extinguishment of debt upon the IPO, higher interest expense and a lower year-over-year change in the fair value of the derivative financial instrument liability partially offset by the absence of convertible note financing fees in the year ended December 31, 2023 and a larger year-over-year change in the fair value of the warrant liability.
Biggest changeOperating Loss 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. 67 Other (Expense) Income 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.
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.
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.
The primary activity that will drive all customers and revenues is the adoption of insurance coverage by commercial insurance carriers nationally, so this is a top priority of the Company. These activities, including our planned research and development efforts, will require significant uses of working capital through the rest of 2024 and beyond.
The primary activity that will drive all customers and revenues is the adoption of insurance coverage by commercial insurance carriers nationally, so this is a top priority of the Company. These activities, including our planned research and development efforts, will require significant uses of working capital through the rest of 2025 and beyond.
We expect our gross profit to increase for the foreseeable future as our revenue 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.
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.
Based on our current operating plans, we believe that our existing cash at the time of this filing will only be sufficient to meet our anticipated operating needs through the end of 2024. Additionally, we will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company.
Based on our current operating plans, we believe that our existing cash at the time of this filing will only be sufficient to meet our anticipated operating needs before the end of 2025. Additionally, we will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company.
Gross Profit and Gross Margin 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 revenue less cost of goods sold, and gross margin as gross profit divided by revenue.
Gross profit and Gross Margin 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 IB-Stim device is a PENFS system intended to be used in patients 11-18 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.
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.
Our largest sales were to three hospitals representing approximately 45% and 52% of total sales for the years ended December 31, 2023 and 2022, respectively. 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.
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. 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.
Expenses We have four categories of expenses: cost of goods sold, selling expenses, research and development (“R&D”), and general and administrative (“G&A”). Costs of goods sold consist of costs paid for the IB-Stim device to our contract manufacturer along with periodic inventory adjustments and expired inventory write-offs.
Expenses We have four categories of expenses: cost of goods sold, selling, research and development (“R&D”), and general and administrative (“G&A”). 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.
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 six or more devices per patient. Our sales typically are made on a purchase order basis rather than through long-term purchase commitments.
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. Our sales typically are made on a purchase order basis rather than through long-term purchase commitments.
Other indications in our pipeline are comprised of functional nausea in children, post-concussion syndrome in children, and cyclic vomiting syndrome in children. For more information, see “ Business—Our Pipeline ” and “—Products .” Since our inception, we have incurred significant operating losses. Our net loss was $14,626,683 and $4,780,061 million for the years ended December 31, 2023 and 2022, respectively.
Other indications in our pipeline are comprised of functional nausea in children, post-concussion syndrome in children, and cyclic vomiting syndrome in children. 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.
Liquidity and Capital Resources We had cash on hand of $78,560 and $253,699 as of December 31, 2023 and 2022, respectively. We maintained negative working capital of $1,643,058 and $6,501,101 as of December 31, 2023 and 2022, respectively.
Liquidity and Capital Resources 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.
This additional corporate governance time required of management could limit the amount of time our management has to implement our business plan and may delay our anticipated growth plans. 67 The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Net cash used in operating activites $ (6,693,978 ) $ (2,298,004 ) Net cash used in investing activities (71,781 ) (61,205 ) Net cash provided by financing activities 6,590,620 2,292,050 Net decrease in cash and cash equivalents (175,139 ) (67,159 ) Cash and cash equivalents at beginning of period 253,699 320,858 Cash and cash equivalents at end of period $ 78,560 $ 253,699 Operating Activities – Net cash used in operating activities increased $4,395,974, or 191.3%, in the year ended December 31, 2023 primarily due to higher general and administrative expenses and the payment of vendors and employee bonuses, partially offset by the issuance of common stock for non-cash consideration of IPO services.
This additional corporate governance time required of management could limit the amount of time our management has to implement our business plan and may delay our anticipated growth plans. 68 The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Net cash used in operating activities $ (6,098,264 ) $ (6,693,978 ) Net cash used in investing activities (27,776 ) (71,781 ) Net cash provided by financing activities 9,744,350 6,590,620 Net increase (decrease) in cash and cash equivalents 3,618,310 (175,139 ) Cash and cash equivalents at beginning of period 78,560 253,699 Cash and cash equivalents at end of period $ 3,696,870 $ 78,560 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.
Results of Operations Comparison of Year Ended December 31, 2023 and Year Ended December 31, 2022 The following table presents our statements of operations for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Net sales $ 2,460,049 $ 2,684,735 Cost of goods sold 303,345 297,060 Gross profit 2,156,704 2,387,675 Selling expenses 323,569 410,883 Research and development 169,315 225,610 General and administrative 8,328,315 5,123,420 Operating loss (6,664,495 ) (3,372,238 ) Other (expense) income, net: Financing charges (2,772 ) (2,322,216 ) Interest expense (476,416 ) (318,666 ) Change in fair value of warrant liability 844,854 606,049 Change in fair value of derivative financial instruments 198,551 713,989 Amortization of debt discount and issuance cost (4,881,622 ) (98,935 ) Extinguishment of debt liabilities (3,649,561 ) - Other income 4,778 11,956 Total other (expense) income, net (7,962,188 ) (1,407,823 ) Net loss $ (14,626,683 ) $ (4,780,061 ) 65 Net Sales Net sales declined $224,686, or 8.4%, to $2,460,049 in the year ended December 31, 2023 due to (i) management’s focus on gaining further insurance coverage for our products, funding and the initial public offering and (ii) fewer shipments to certain customers as they manage through the insurance reimbursement process.
Results of Operations Comparison of Year Ended December 31, 2024, and Year Ended December 31, 2023 The following table presents our statements of operations for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Net sales $ 2,685,925 $ 2,460,049 Cost of goods sold 362,002 303,345 Gross profit 2,323,923 2,156,704 Selling expenses 324,708 323,569 Research and development 206,107 169,315 General and administrative 8,949,925 8,328,315 Operating loss (7,156,817 ) (6,664,495 ) Other (expense) income, net: Financing charges (230,824 ) (2,772 ) Interest expense, net (174,328 ) (476,416 ) Change in fair value of warrant liability (941 ) 844,854 Change in fair value of derivative financial instruments — 198,551 Amortization of debt discount and issuance costs (126,387 ) (4,881,622 ) Extinguishment of debt liabilities — (3,649,561 ) Other (expense) income, net (552,204 ) 4,778 Total other (expense) income, net (1,084,684 ) (7,962,188 ) Net loss $ (8,241,501 ) $ (14,626,683 ) 66 Net Sales 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.
We expect production costs to remain relatively constant and only nominal inventory expirations in the foreseeable future. 64 Our core selling expenses primarily consist of commissions and shipping costs. These expense items are generally correlated with sales.
We expect production costs to remain relatively constant and only nominal inventory expirations in the foreseeable future. 65 Our core selling expenses primarily consist of commissions. 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.
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. 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.
We expect future R&D expenses for other indications, such as functional nausea, post-concussion syndrome and cyclic vomiting syndrome in children. 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.
General and Administrative General and administrative expense increased $3,204,895, or 62.6%, to $8,328,315 in the year ended December 31, 2023 due to (i) incremental headcount to build out market access and patient assistance teams including recruiting costs, (ii) higher insurance, investor relations and board of director costs post-IPO, (iii) one-time IPO advisory costs and (iv) higher advertising costs in order to expand market awareness.
General and Administrative 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.
Investing Activities – Net cash used in investing activities increased $10,576, or 17.3%, in the year ended December 31, 2023 due to purchases of equipment, trademarks and licenses.
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.
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, 2023, we had an stockholders’ deficit of $1,403,241 with no outstanding long-term debt.
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. We have incurred losses since inception and have funded our operations primarily with a combination of sales, debt, and the sale of capital stock.
Financing Activities – Net cash provided by financing activities increased $4,298,570, or 187.5%, in the year ended December 31, 2023 due to proceeds from the issuance of common stock via an IPO and convertible notes partially offset by repayments of notes payable and the payment of IPO costs.
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.
Expired inventory has not been material to our results, averaging 1% or less of revenue over the past five years. We have a fixed-price contract with the manufacturer of our IB-Stim device to produce the device.
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.
Gross Profit and Gross Margin Gross profit declined $230,971, or 9.7%, to $2,156,704 in the year ended December 31, 2023 due to (i) lower sales volume and (ii) gross margin declining 120 bps from 88.9% to 87.7% in the years ended December 31, 2023 and 2022, respectively, due to growth in our patient assistance program that provides discounts to patients without insurance coverage.
Gross Profit and Gross Margin 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.
Removed
We ramped up production in 2018 and 2019 to meet expected demand and avoid any inventory shortages. This resulted in some excess inventory that did expire. The costs of expired inventory were $25,008 and $10,026 for the years ended December 31, 2023 and 2022, respectively, representing 8.2% and 3.4% of our costs of goods sold, respectively.
Added
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.
Removed
Selling Expenses Selling expenses declined $87,314, or 21.3%, to $323,569 in the year ended December 31, 2023 due to (i) lower sales volume and (ii) a reduction in the commission rate paid to the sales team in the middle of the year ended December 31, 2022.
Added
Selling Expenses 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.
Removed
Research and Development Research and development expense declined $56,295, or 25.0%, to $169,315 in the year ended December 31, 2023 due to more patient trials conducted in the year ended December 31, 2023 as the Company prepared for more FDA submissions.
Added
Research and Development 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.
Removed
Net Loss Our net loss increased $9,846,622, or 206.0%, to $14,626,683 in the year ended December 31, 2023 primarily due to lower sales volume, higher general and administrative expenses, the full amortization of the debt discount upon the IPO and the loss on the extinguishment of debt upon the IPO.
Added
Net Loss 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.
Removed
The increase in working capital was primarily due to the conversion of notes payable upon the IPO along with the corresponding elimination or reduction of the fair value liability of warrants and derivatives and payments of employee bonuses and to vendors with proceeds from the IPO.
Added
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.
Added
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.

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