Neuraxis, INC Segments Disclosure

15. Segment Information

 

The Company evaluates the following factors to identify its reportable segments: (i) nature of products and services, (ii) type of customer for the products and services, (iii) sales, production and distribution methods of the products and services and (iv) the nature of the regulatory environment, if applicable. Based on an evaluation of these factors, management concluded that the Company’s operations are managed through one reportable segment, IB-Stim, that derives its revenues in the United States from a PENFS device that is used to treat patients 8-21 years of age with functional abdominal pain associated with irritable bowel syndrome and in patients 8 years and older with functional abdominal pain associated with functional dyspepsia and related nausea symptoms. The accounting policies of the IB-Stim segment are the same as those described in the Summary of Significant Accounting Policies (see Footnote 2). The Chief Operating Decision Maker (“CODM”) regularly evaluates the performance of the IB-Stim segment for the purpose of allocating resources based on net sales and operating loss, both of which are reported in the Statements of Operations. The CODM uses net sales to evaluate IB-Stim’s adoption and utilization by insurance carriers and physicians. As Neuraxis is an emerging growth company, operating loss is used to monitor the Company’s cost structure in order to achieve future segment profitability. Both net sales and operating loss are measured against an annual budget on a periodic basis to assess achievement toward annual compensation incentive targets. The Company’s CODM is its President and Chief Executive Officer.

 

The following reconciles the reportable segment net sales and operating loss to the Company’s reported net loss:

 Schedule of Reconciles the Company’s Net Sales and Operating Loss

		2025				2024
		For the Years Ended December 31,
		2025				2024
Net Sales		$	3,569,282			$	2,685,925
Cost of Goods Sold			562,916				362,002
Gross Profit			3,006,366				2,323,923
Selling Expenses (a)			2,279,974				1,468,884
Research and Development (a)			493,611				433,614
Wages and Benefits (a)			4,550,833				4,380,434
Professional Services (a)			1,296,368				1,945,331
Legal Settlement			630,568				--
Depreciation			37,691				26,346
Amortization			21,810				11,485
Other Operating Expenses (a) (b)			1,525,419				1,214,646
Segment Operating Loss			(7,829,908)				(7,156,817)
Other Income (Expense):
Financing charges			(30,240)				(230,824)
Interest expense			(73,969)				(174,328)
Change in fair value of warrant liability			(7,634)				(941)
Change in fair value of derivative liability			—				—
Amortization of debt discount and issuance cost			—				(126,387)
Extinguishment of debt liabilities			—				—
Other income			141,196				33,620
Other expense			—				(585,824)
Total other income (expense), net			29,353				(1,084,684)
Net Loss		$	(7,800,555)			$	(8,241,501)

 

	(a)	The significant expense categories and amounts align with the segment-level information provided on a regular basis to the CODM.
	(b)	Other operating expenses include advertising, rent and utilities, insurance, depreciation and amortization, travel, software subscription fees, board fees and bad debt expense.

 

Total segment assets for IB-Stim amounted to $6,404,036 and $4,757,572 as of December 31, 2025 and 2024, respectively. Total segment capital expenditures for IB-Stim amounted to $131,150 and $27,776 for the years ended December 31, 2025 and 2024, respectively. Total segment depreciation and amortization amounted to $59,501 and $37,831 for the years ended December 31, 2025 and 2024, respectively.

 

Significant segment non-cash charges settled in common stock include (i) consulting and advisory fees totaling $146,423 and $754,685 for the years ended December 31, 2025 and 2024, respectively, and (ii) hiring grants totaling $7,268 and $227,000 for the years ended December 31, 2025 and 2024, respectively.

 

 

Neuraxis, Inc.

Notes to Financial Statements