Neuraxis, INC Leases Disclosure
10. Leases
Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the implicit interest rate is generally not readily determinable, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar economic environment. Lease expense for the operating lease is recognized on a straight-line basis over the lease term.
Leases may include renewal options, and the renewal option is included in the lease term if the Company concludes that it is reasonably certain that the option will be exercised. Certain leases may contain rent escalation clauses, either fixed or adjusted periodically for inflation of market rates, that are factored into the calculation of lease payments to the extent they are fixed and determinable at lease inception. The Company also has variable lease payments that do not depend on a rate or index, primarily for items such as common area maintenance and real estate taxes, which are recorded as expenses when incurred.
The Company’s leases are comprised of operating leases for office space. At the inception of the lease, the Company determines whether the lease contract conveys the right to control the use of identified property for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating leases are recorded as operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the Balance Sheets. The Company did not have any finance leases at December 31, 2025 and 2024.
The Company has two leases consisting of office space in Batesville and Carmel, Indiana. The lease in Batesville, Indiana commenced on August 1, 2025, and has an initial term of three years, with automatic one year renewals subject to an annual 4% rent escalation, unless 60 day notice of vacating is given. On May 19, 2025, the Company terminated its prior lease in Versailles, Indiana, with a monthly lease payment of $1,800, effective July 31, 2025, without penalty due to relocation of the office space to Batesville, Indiana, with the same landlord. The current monthly lease payment is $2,000 with no escalations during the initial lease term. During the year ended December 31, 2025, the Company derecognized the right of use asset and operating lease liabilities of $29,014 and $29,286, respectively, related to the terminated lease in Versailles, Indiana. Correspondingly, the Company recognized a right of use asset and operating lease liabilities of $63,170 and $37,970, respectively, during the year ended December 31, 2025, related to the new lease in Batesville, Indiana. On June 13, 2025, the Company prepaid $25,200 towards the Batesville, Indiana monthly lease payments which will be amortized over the initial lease term. The lease in Carmel, Indiana commenced January 1, 2024, with an initial term of five years and five months. The monthly lease payment started at $6,721 with an annual increase of 2.5%. The Company was only obligated to pay an amount equal to 50% of the monthly base rent for the first 10 months of the term.
For the years ended December 31, 2025 and 2024, the Company recognized $99,899 and $96,177 of operating lease expense, including short-term lease expense and variable lease costs.
The following table presents information related to the Company’s operating leases:
| December 31, 2025 | December 31, 2024 | |||||||
| Operating lease right-of-use assets | $ | 261,565 | $ | 284,656 | ||||
| Current portion of operating lease payable | 65,752 | 62,754 | ||||||
| Operating lease liabilities | 202,566 | 256,499 | ||||||
| Total | $ | 268,318 | $ | 319,253 | ||||
| Weighted-average remaining lease term (in years) | 3.31 | 2.75 | ||||||
| Weighted-average discount rate | 15.0 | % | 15.0 | % | ||||
As of December 31, 2025, the maturities of the Company’s operating lease liabilities were as follows:
| 2026 | $ | 100,347 | ||
| 2027 | 102,456 | |||
| 2028 | 98,127 | |||
| 2029 | 38,025 | |||
| Total lease payments | 338,955 | |||
| Less: imputed interest | (70,637) | |||
| Total present value of lease payments | $ | 268,318 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 20, 2025 | |
| 2023 | Apr 16, 2024 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.