NeurAxis Reports Second Quarter 2023 Financial Results
September 21 2023 - 8:00AM
NeurAxis, Inc. (NYSE American: NRXS) (“NeurAxis” or the
“Company”), a medical technology company commercializing
neuromodulation therapies that address chronic and debilitating
conditions in children and adults, today reported financial results
for the second quarter ended June 30, 2023.
Recent Highlights:
- Announced a poster presentation
titled, “Percutaneous Electrical Nerve Field Stimulation Saves Cost
to Parents and Insurers of Adolescents with Irritable Bowel
Syndrome”, from the University of Michigan at the 2023 American
Neurogastroenterology and Motility Society (ANMS) Annual Meeting,
highlighting the cost-effectiveness of its PENFS or IB-Stim™
therapy in the treatment of irritable bowel syndrome in
adolescents. Noting:
- IB-Stim™ therapy increases the
number of healthy days, based on effective treatment of abdominal
pain symptoms, in adolescents suffering from IBS;
- Treatment with IB-Stim™ results in
approximately 60% or $4,744 of potential cost-savings to insurers;
and
- IB-Stim™ treatment also offers the
potential cost-saving opportunity of approximately 53% or $5,802 to
patients’ families.
- Highlighted two recently published
independent studies showing that IB-Stim™ therapy leads to
improvements in abdominal pain and disability in adolescents with
IBS and that the gut microbiome may play an important role.
- Announced the publication of
Prospective study of the effect of auricular percutaneous
electrical nerve field stimulation on quality of life in children
with pain related disorders of gut-brain interaction, a randomized,
double-blind, placebo-controlled trial to evaluate the efficacy of
IB-Stim™ in children with post-concussion symptoms, featured in the
September 2023 Frontiers in Pain Research. Noting:
- Patients (n=31) reported significant
reductions in abdominal pain, nausea, disability, and anxiety from
baseline to week 4 (p < 0.05);
- Parent assessments reported
significant improvement in the child’s quality of life based on
physical function, psychosocial function, and generic core scale
scores (p < 0.05); and
- Parents also reported reduced
abdominal pain, functional disability, and somatization in their
child. The global health scores also significantly improved based
on both patient and parent reports (p < 0.05).
- Completed initial public offering of
common stock which raised net proceeds of approximately $6.1
million.
“We are thrilled with the progress we have made,
especially now as a public company, with funds raised to steadily
drive our momentum,” said Brian Carrico, President and Chief
Executive Officer of NeurAxis. “The support we are receiving,
including our recently highlighted 10th peer reviewed publication,
out of a total 14 publications to-date, demonstrates our continuing
commitment to grow our body of clinical evidence. Further, as we
approach our target of 16 publications, we believe the foundation
of strong clinical evidence we have positions us for expanded payor
coverage and the adoption of IB-Stim™. We look forward to our
continuing progress to grow our business, in line with our goal to
make IB-Stim™ the standard of care for children with abdominal pain
related disorders of the gut-brain interactions.”
Second Quarter 2023 Financial
ResultsRevenue for the second quarter of 2023 was $646.0
thousand, representing a decrease of 5% compared to $682.6 thousand
in the second quarter of 2022. The decrease was primarily due to
ordering patterns of our major customers.
Gross profit for the second quarter of 2023 was
$578.2 thousand, representing a decrease of 4% compared to a gross
profit of $603.6 thousand in the second quarter of 2022. Gross
margin totaled 89.5% in the second quarter of 2023, compared to
88.4% in second quarter of 2022. The increase was primarily due to
slightly lower cost of sales.
Selling expenses for the second quarter of 2023
were $78.8 thousand, compared to $127.4 thousand in the second
quarter of 2022. The decrease was primarily due to lower commission
costs, with the commission rate being lowered at the beginning of
2023.
Second quarter research and development expenses
were $109.8 thousand, compared to $13.7 thousand in the second
quarter of 2022, reflecting increased spend primarily on new
product development.
General and administrative expenses for the
second quarter of 2023 were $1,507.2 thousand, compared to $1,132.1
thousand in the second quarter of 2022. The increase was primarily
due to higher professional fees.
Second quarter net loss was ($2,235.6) thousand,
or ($1.21) per common share, compared to ($1,516.5) thousand, or
($0.87) per common share, for the same period of 2022.
Forward-Looking StatementsCertain statements in
this press release are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical fact are
forward-looking statements. Forward-looking statements are based on
management’s current assumptions and expectations of future events
and trends, which affect or may affect the Company’s business,
strategy, operations or financial performance, and actual results
and other events may differ materially from those expressed or
implied in such statements due to numerous risks and uncertainties.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified.
There are a number of important factors that could cause actual
results, developments, business decisions or other events to differ
materially from those contemplated by the forward-looking
statements in this press release. These factors include, among
other things, the conditions in the U.S. and global economy, the
trading price and volatility of the Company’s stock, public health
issues or other events, the Company’s compliance with applicable
laws, the results of the Company’s clinical trials and perceptions
thereof, as well as factors described in the Risk Factors section
of NeurAxis’s public filings with the Securities and Exchange
Commission (SEC). Because forward-looking statements are inherently
subject to risks and uncertainties, you should not rely on these
forward-looking statements as predictions of future events. These
forward-looking statements speak only as of the date of this press
release and, except to the extent required by applicable law, the
Company undertakes no obligation to update or revise these
statements, whether as a result of any new information, future
events and developments or otherwise.
About NeurAxis, Inc.NeurAxis,
Inc., is a medical technology company focused on neuromodulation
therapies to address chronic and debilitating conditions in
children and adults. NeurAxis is dedicated to advancing science and
leveraging evidence-based medicine to drive adoption of its
IB-Stim™ therapy, which is its proprietary Percutaneous Electrical
Nerve Field Stimulation (PENFS) technology, by the medical,
scientific, and patient communities. IB-Stim™ is FDA cleared for
functional abdominal pain associated with irritable bowel syndrome
(IBS) in adolescents 11-18 years old. Additional clinical trials of
PENFS in multiple pediatric and adult conditions with large unmet
healthcare needs are underway. For more information, please
visit http://neuraxis.com.
Contacts:
CompanyNeurAxis,
Inc.info@neuraxis.com
Investor
RelationsGilmartin
GroupIR@neuraxis.com
NeurAxis, Inc. Condensed
Statements of Operations(unaudited)
|
For the Three Months EndedJune
30, |
|
|
For the Six Months Ended June
30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
$ |
646,021 |
|
|
$ |
682,581 |
|
|
$ |
1,451,131 |
|
|
$ |
1,452,848 |
|
Cost of Goods Sold |
|
67,813 |
|
|
|
79,009 |
|
|
|
163,713 |
|
|
|
154,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
578,208 |
|
|
|
603,572 |
|
|
|
1,287,418 |
|
|
|
1,298,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling Expenses |
|
78,791 |
|
|
|
127,424 |
|
|
|
186,723 |
|
|
|
263,304 |
|
Research and Development |
|
109,789 |
|
|
|
13,665 |
|
|
|
126,586 |
|
|
|
58,063 |
|
General and
Administrative |
|
1,507,169 |
|
|
|
1,132,065 |
|
|
|
2,987,923 |
|
|
|
2,160,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss |
|
(1,117,541 |
) |
|
|
(669,582 |
) |
|
|
(2,013,814 |
) |
|
|
(1,182,889 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing charges |
|
— |
|
|
|
(872,763 |
) |
|
|
(2,772 |
) |
|
|
(872,763 |
) |
Interest expense |
|
(194,690 |
) |
|
|
(34,450 |
) |
|
|
(356,378 |
) |
|
|
(60,550 |
) |
Change in fair value of warrant liability |
|
(36,050 |
) |
|
|
61,520 |
|
|
|
198,757 |
|
|
|
(569,561 |
) |
Change in fair value of derivative liability |
|
860 |
|
|
|
— |
|
|
|
192,157 |
|
|
|
— |
|
Amortization of debt discount and issuance cost |
|
(887,937 |
) |
|
|
(12,944 |
) |
|
|
(3,550,592 |
) |
|
|
(12,944 |
) |
Extinguishment of debt liabilities |
|
— |
|
|
|
— |
|
|
|
1,129,498 |
|
|
|
— |
|
Other income |
|
2 |
|
|
|
11,689 |
|
|
|
1,552 |
|
|
|
11,956 |
|
Other expense |
|
(258 |
) |
|
|
— |
|
|
|
(7,430 |
) |
|
|
— |
|
Total other income (expense), net |
|
(1,118,073 |
) |
|
|
(846,948 |
) |
|
|
(2,395,208 |
) |
|
|
(1,503,862 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
$ |
(2,235,614 |
) |
|
$ |
(1,516,530 |
) |
|
$ |
(4,409,022 |
) |
|
$ |
(2,686,751 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-share
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
$ |
(1.21 |
) |
|
$ |
(0.87 |
) |
|
$ |
(2.39 |
) |
|
$ |
(1.56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
2,003,322 |
|
|
|
1,970,054 |
|
|
|
2,003,322 |
|
|
|
1,970,054 |
|
NeurAxis, Inc. Condensed
Balance Sheet(unaudited)
|
June 30, |
|
|
|
|
|
2023 (Unaudited) |
|
|
December 31,2022 |
|
Assets |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
51,440 |
|
|
$ |
253,699 |
|
Accounts receivable, net |
|
237,170 |
|
|
|
174,399 |
|
Inventories |
|
44,205 |
|
|
|
48,133 |
|
Prepaids and other current assets |
|
21,333 |
|
|
|
726 |
|
Total current assets |
|
354,148 |
|
|
|
476,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment, at
cost: |
|
417,912 |
|
|
|
405,845 |
|
Less - accumulated depreciation |
|
(332,651 |
) |
|
|
(317,834 |
) |
Property and equipment, net |
|
85,261 |
|
|
|
88,011 |
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
Deferred offering costs |
|
941,143 |
|
|
|
736,736 |
|
Operating lease right of use asset |
|
85,823 |
|
|
|
101,382 |
|
Intangible assets, net |
|
73,316 |
|
|
|
77,558 |
|
Total
Assets |
$ |
1,539,691 |
|
|
$ |
1,480,644 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
2,438,117 |
|
|
$ |
1,592,116 |
|
Accrued expenses |
|
1,174,381 |
|
|
|
834,062 |
|
Notes payable |
|
249,389 |
|
|
|
202,834 |
|
Current portion of operating lease payable |
|
41,261 |
|
|
|
33,395 |
|
|
|
|
|
|
|
|
|
Notes payable - related party |
|
58,051 |
|
|
|
58,051 |
|
Notes payable - convertible notes, net of unamortized discount of
$4,421,424 and $3,327,213 as of June 30, 2023 and December 31,
2022 |
|
1,217,465 |
|
|
|
228,342 |
|
Customer deposits |
|
61,317 |
|
|
|
59,174 |
|
Derivative liabilities |
|
2,275,029 |
|
|
|
1,735,700 |
|
Warrant liabilities |
|
3,916,884 |
|
|
|
2,234,384 |
|
Total current liabilities |
|
11,431,894 |
|
|
|
6,978,058 |
|
|
|
|
|
|
|
|
|
Non-current Liabilities: |
|
|
|
|
|
|
|
Operating lease payable, net of current portion |
|
51,635 |
|
|
|
76,199 |
|
Note payable, net of current portion |
|
38,797 |
|
|
|
— |
|
Total non-current liabilities |
|
90,432 |
|
|
|
76,199 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
11,522,326 |
|
|
|
7,054,257 |
|
Commitments and contingencies
(see note 14) |
|
|
|
|
|
|
|
Stockholders’
Deficit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Series A Preferred
stock, $0.001 par value; 1,000,000 shares authorized; 506,637
issued and outstanding as of June 30, 2023 and December 31,
2022 |
|
507 |
|
|
|
507 |
|
Convertible Series Seed
Preferred Stock, $0.001 par value; 120,000 shares authorized;
115,477 issued and outstanding as of June 30, 2023 and December 31,
2022 |
|
115 |
|
|
|
115 |
|
Common stock, $0.001 par
value; 100,000,000 shares authorized; 1,963,322 issued and
outstanding as of June 30, 2023 and December 31, 2022 |
|
1,963 |
|
|
|
1,963 |
|
Additional paid in
capital |
|
28,355,230 |
|
|
|
28,355,230 |
|
Accumulated deficit |
|
(38,340,450 |
) |
|
|
(33,931,428 |
) |
|
|
|
|
|
|
|
|
Total stockholders’ deficit |
|
(9,982,635 |
) |
|
|
(5,573,613 |
) |
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders’ Deficit |
$ |
1,539,691 |
|
|
$ |
1,480,644 |
|
NeurAxis, Inc. Condensed
Statement of Cash Flows (unaudited)
|
For the Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
Net Loss |
$ |
(4,409,021 |
) |
|
$ |
(2,117,190 |
) |
Adjustments to reconcile net loss to net |
|
|
|
|
|
|
|
cash used by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount and issuance cost |
|
3,550,592 |
|
|
|
12,944 |
|
Depreciation and amortization |
|
20,060 |
|
|
|
16,695 |
|
Provisions for losses on accounts receivable |
|
3,927 |
|
|
|
29,580 |
|
Non-cash lease expense |
|
15,559 |
|
|
|
13,296 |
|
Stock based compensation |
|
— |
|
|
|
24,121 |
|
Extinguishment of debt liability |
|
(1,129,498 |
) |
|
|
— |
|
Finance Charges |
|
2,772 |
|
|
|
872,763 |
|
Change in fair value of derivative liabilities |
|
(192,157 |
) |
|
|
— |
|
Change in fair value of warrant liabilities |
|
(198,757 |
) |
|
|
569,563 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
(66,698 |
) |
|
|
(131,764 |
) |
Inventory |
|
3,928 |
|
|
|
(13,616 |
) |
Prepaids and other current assets |
|
(20,607 |
) |
|
|
(138 |
) |
Accounts payable |
|
846,001 |
|
|
|
(118,561 |
) |
Accrued expenses |
|
340,317 |
|
|
|
266,486 |
|
Customer deposits |
|
2,143 |
|
|
|
(12,720 |
) |
Operating lease liability |
|
(16,698 |
) |
|
|
(13,791 |
) |
Net cash used by operating activities |
|
(1,248,137 |
) |
|
|
(1,171,895 |
) |
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities |
|
|
|
|
|
|
|
Additions to property and equipment |
|
(12,067 |
) |
|
|
— |
|
Additions to intangible assets |
|
(1,000 |
) |
|
|
(49,815 |
) |
Net cash used by investing activities |
|
(13,067 |
) |
|
|
(49,815 |
) |
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities |
|
|
|
|
|
|
|
Principal payments on notes payable |
|
(2,724,479 |
) |
|
|
(86,453 |
) |
Proceeds from notes payable |
|
159,831 |
|
|
|
— |
|
Proceeds from convertible notes, net of fees |
|
3,828,000 |
|
|
|
1,087,500 |
|
Offering costs paid |
|
(204,407 |
) |
|
|
(26,549 |
) |
Net cash used in financing activities |
|
1,058,945 |
|
|
|
974,498 |
|
|
|
|
|
|
|
|
|
Net Decrease in Cash
and Cash Equivalents |
|
(202,259 |
) |
|
|
(247,212 |
) |
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at
Beginning of Period |
|
253,699 |
|
|
|
320,858 |
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents at End of Period |
$ |
51,440 |
|
|
$ |
73,646 |
|
Supplemental
Disclosure of Non-cash Cash Activities |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
57,202 |
|
|
$ |
55,550 |
|
Cash paid for income taxes |
|
— |
|
|
|
— |
|
Supplemental Schedule
of Non-cash Investing and Financing Activities |
|
|
|
|
|
|
|
Fair value of warrant liabilities of warrants from convertible
notes |
$ |
1,881,257 |
|
|
$ |
884,118 |
|
Fair value of derivative liabilities of conversion feature from
convertible notes |
|
1,860,984 |
|
|
|
1,075,098 |
|
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