Neuraxis, INC Q3 FY2024 earnings call

• Achieved significant growth with 40% year-over-year revenue increase in Q3 2024. • Received a category one permanent CPT billing code effective January 1, 2026, simplifying billing and reimbursement. • Got FDA clearance to expand IVStim's age range from 11-18 years to 8-21 years, nearly doubling the market opportunity. • Submitted a 510(k) for RED (Rectal Expulsion Device) in early August 2024, with optimism for late 2024 commercialization. • Secured financing from reputable healthcare funds to ensure adequate funding. • Continues to expand insurance coverage, with covered lives reaching ~35 million and aiming to exceed 50 million by year-end. • Emphasized the process of translating data into insurance coverage and then to revenue, with academic society guidelines expected to accelerate this process.

In the third quarter of 2024, Neuraxis reported revenues of $667,000, representing a 40% year-over-year increase compared to $477,000 in the same period of 2023. Unit sales saw an approximate 50% year-over-year growth. Gross profit for the third quarter of 2024 was $570,000, up from $410,000 in the third quarter of 2023. However, gross margin decreased by 50 basis points year-over-year to 85.4% due to discounted financial assistance units outpacing full reimbursement units.

• Anticipate revenue growth to continue in the fourth quarter of 2024 and into 2025. • Aim to reach cash flow breakeven based on sales volume and strong gross margins. • Optimistic about RED's commercialization in late 2024, which has potential to drive significant revenues. • Expect continued growth in insurance coverage leading to increased revenues and progress toward profitability.

• Delay in insurance coverage expansion could slow revenue growth. • Potential delay in FDA approval for RED or other products. • Market competition in the neuromodulation and GI devices space could impact market share.

Q: Can you talk about the significance of receiving the category one code as well as the 510(k) extension?

A: The category one code is the result of years of work, making billing easier with a permanent reimbursement amount and RVUs. The 510(k) extension increases the age range for IVStim from 11-18 to 8-21, nearly doubling the treatable patient population.

Q: Does the age extension increase the covered lives?

A: Most payers' policies currently cover 11-18, and efforts are underway to expand to 8-21, which will effectively double the treatable population under those payers, but covered lives are reported based on standard policies and need payer policy changes.

Q: Are there studies showing no recidivism of the disease?

A: We don't use 'cure', but have long-term data at 12 months showing statistical significance with around 70% of patients having strong responses, though some may relapse.

Q: When will RED be commercialized?

A: Cautiously optimistic to begin commercialization in late 2024, with plans to launch quickly after FDA clearance.

Q: Can we expect G&A expenses to stay around $2 million a quarter?

A: From a cash perspective, yes, but GAAP may have incremental expenses for RED in 2025 and a long-term incentive plan, but revenue growth is expected to cover them.