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NeurAxis Reports Second Quarter 2023 Financial Results

NeurAxis, Inc.
NeurAxis, Inc.

CARMEL, Ind., Sept. 21, 2023 (GLOBE NEWSWIRE) -- 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.

ANNUNCIO PUBBLICITARIO

“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 Results
Revenue 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 Statements
Certain 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:

Company
NeurAxis, Inc.
info@neuraxis.com

Investor Relations
Gilmartin Group
IR@neuraxis.com


NeurAxis, Inc.
Condensed Statements of Operations
(unaudited)

 

For the Three Months Ended
June 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