Neuraxis, Inc.

Good day and welcome to the NARACSIS first quarter fiscal year 2026 financial results conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I'd now like to turn the conference over to Ben Champsion, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Thank you for joining us for Neuraxis's first quarter 2026 financial results and corporate update conference call. Joining us on today's call is Brian Carrico, CEO of Neuraxis, and Tim Hendricks, CFO of Neuraxis. At the conclusion of today's prepared remarks, we will open the call to questions. Please follow the operator's instructions to ask questions. Today's event is being recorded and will be available for replay through the webcast information provided in the press release. Finally, I'd also like to call your attention to the customary SAREP harbor disclosures regarding forward-looking information. The conference call today will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations, and future potential financial operational results for NARAXA. Although management believes these statements are reasonable based on estimates, assumptions, and projections as of today, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties, and other factors, including but not limited to the factors set forth in the company's filings with the SEC. NeurAccess undertakes no obligation to update or revise any of these forward-looking statements. With that said, I would like to turn the event over to Brian Terrico, Chief Executive Officer of NeurAccess. Brian, please proceed.

Brian Terrico Thank you, Ben. Good morning to everyone joining us. Good to talk to everyone again. Quarter 1, 2026 was an important quarter for NeurAccess. I talked a little bit about this on the last earnings call six or seven weeks ago. It was our first full quarter of operating with the Category 1 CPT code for PENFS, and it gave us the clearest view to date of what drives adoption, what continues to limit broader utilization, and where we need to focus our resources. I will structure my remarks today around six key areas. Number one, revenue and first quarter highlights. Number two, insurance coverage status and payer progress. Number three, key performance indicators or KPIs. Number four, commercialization, including our current structure, new hires, and upcoming changes. Number five, the VA opportunity. And number six, a summary of our focused next steps. Following my remarks, Tim Hendricks, our CFO, will review our financial results for the first quarter, 2026. Before the first quarter, 2026, revenue was $1.6 million compared with $896,000 in Q1-25, representing an 80% year-over-year revenue growth. The quarter modestly exceeded our expectations, but the more important point is what we learned from the quarter. Quarter 1 confirmed proof of concept and that demand is strong where access barriers are reduced and healthcare providers are with the right combination of payer coverage, physician engagement, and operational capacity perform extremely well. We also saw strong improvement in average selling price during the quarter, driven by the continued mixed shift toward covered and reimbursed procedures and away from discounted financial assistance channels. That mixed shift is important because it supports stronger revenue quality, margin potential, and long-term scalability. Some key first quarter highlights include, as we've discussed, the Category 1 CPT code for PNFS became effective on January 1st, creating a more standard framework for procedure billing and reimbursement for children's hospitals and RVUs for physicians. We continue to operate with more than 100 million covered lives, including the major national health insurer policy announced in December representing approximately 45 million health plan members. Patients treated increased meaningfully following the CPT code launch, particularly at children's hospitals with strong policy coverage. We confirmed that written medical policy coverage remains essential. Payers generally do not provide reliable and consistent coverage based solely on the CPT code. We gained clear insight into the three factors that drive account-level success, written medical policy coverage, physician champions, and dedicated IB STEM clinic time. We identified the remaining gaps we need to close, including payer coverage, clinical reinforcement, market-level execution, C-suite and administrator education, and consistent communication with each institution. In short, the quarter moved us from theory to evidence where proof of concept continued to succeed. The barriers that historically limited IV stem adoption are now much better to find, and that gives us a far more actionable roadmap. So now I want to talk about insurance status. Insurance policy coverage remains the single most important driver of scalable growth. Corner one confirmed that a single substantial medical policy, while extremely valuable, is not sufficient by itself. Providers need confidence that coverage exists across a meaningful portion of their payer mix before they fully activate programs and allocate consistent clinic time. This is why our payer strategy remains our highest priority. We're focused on expanding written medical policy coverage while also improving the practical infrastructure that allows hospitals and providers to treat patients efficiently once coverage exists. Our payer outreach now includes multiple parallel channels, continued direct engagement with the payers and their medical policy teams. implementation of the CPT code 64567 on fee schedules across state Medicaid programs where new codes are not yet fully loaded, physician and KOL-driven advocacy to reinforce the clinical need in the published evidence, engagement with both pediatric and adult academic medical societies, guidance from former payer executives and medical directors to refine our message to access the right decision makers, and continued expansion of our internal prior authorization team to enhance administrative efficiency for providers and improve reimbursement confidence. We continue to make progress with large national payers. I will not disclose specific payer discussions today, but we recently gained improved access to medical directors and other decision makers at several of the largest remaining payers without existing policy coverage. Those conversations reinforce our belief that the challenge has often been access to the right decision makers rather than fundamental opposition to the therapy. Our message to payers remains consistent. IB STEM addresses a large unmet need in pediatric functional abdominal pain and related disorders, offers a favorable safety profile, and provides an alternative to off-label medication use, including drugs with FDA black box warnings. The clinical evidence, published treatment guidelines, Broad academic society and KOL support, the Category 1 CPT code, and existing payer precedent together create a strong foundation for additional policy coverage. That said, as we clearly know at this point, payer coverage adoption does not happen overnight. We expect policy updates and prior authorization improvements to unfold gradually. In parallel to pursuing those remaining payers, our goal is to execute aggressively in markets where policy coverage exists and prepare the commercial infrastructure to scale as additional coverage comes online. We have also seen that some state Medicaid programs have yet to load CPT code 64567 on their fee schedules. This can delay program launches and affect hospital activation due to health equity considerations. Importantly, these are implementation issues rather than clinical adoption issues. In markets where policy coverage and fee schedule inclusion are in place, the CPT code is having the intended effect. Now I want to talk about KPIs. We will now provide set and meaningful KPIs each quarter going forward under the new CPT code environment. This section includes the metrics that best explain both current performance and future growth potential. The purpose of this KPI framework is not only to report historical performance, it is to help investors understand the mechanics of adoption, where coverage exists, whether providers have operational capacity, how patient submissions convert to treatments, and how reimbursed utilization affects revenue quality and margin potential. The first KPI I'll discuss is revenues. $1.6 million in quarter 126 versus $896,000 in quarter 125. This is the top-line performance under the first quarter with Category 1 CPT code in effect. IB STEM average selling price, ASP, is the second KPI. We're at $1,017 versus $766 in Q1 of 25, up 33%. This shows reimbursement mix shift and revenue quality. Total covered lives remain steady at 101 million. Quarter one, internal prior authorization approval percentage. This one's important. This measures percentage of full price approval submissions. Now remember, we do prior authorizations for a certain number of children's hospitals. that we have access to these numbers. We don't have access to children's hospitals across the country that do their own prior authorizations. But for the children's hospitals that we do prior authorizations for, we had a 32% approval rate in quarter one compared to a 12% approval rate throughout the year of 2025. Quarter one number of ordering accounts, we had 66% accounts order IB STEM in the first quarter compared to 56 accounts in quarter one of 2025, so up 18%. That shows the breadth of adoption and concentration risk. The final KPI I'll share, and Tim will talk about some of the financial KPIs, but the last commercial KPI I'll share is quarter one revenue per ordering IB STEM account. You could back into this number, but I'll give it to you. $24,000 per account on average that ordered in quarter one versus $16,000 per account in quarter one 2025, up 53%. Now I want to talk about the commercialization. Commercialization and commercial execution is now the primary driver of growth. We have moved from an access creation phase into an execution phase. And our commercial structure is being aligned around the markets and accounts where coverage, demand, and utilization potential are strongest. Our primary commercial focus remains on children's hospitals. This is where we have the strongest evidence base, the clearest coverage momentum, and the most immediate opportunity to scale utilization. We have prioritized accounts based on their utilization potential, reimbursement environment, and ability to dedicate IV stem clinic capacity. During the first quarter, we continued direct engagement with the children's hospitals that have previously treated with IV stem. Our team has been working with physicians, division chiefs, administrators, and financial stakeholders to communicate the clinical data, the reimbursement pathway, the procedural economics, and the operational requirements needed to consistently treat patients. The most successful accounts share three common characteristics, strong medical policy coverage across a meaningful portion of the hospital's payer mix, at least one engaged physician champion who understands the clinical data, and dedicated clinic time or a consistent workflow to identify, authorize, and treat eligible patients. Where one of those elements is missing, utilization is constrained. Our commercial model is therefore being built to identify the missing element at each account and address it directly, whether that means payer support, clinical reinforcement, operational workflow support, or economic education for administrators. We are also being disappointed about how we deploy resources. We are not expanding broadly into markets that lack sufficient payer coverage. Instead, we are focusing on depth in select markets where coverage and demand are already favorable, with the expectation that this approach will generate higher returns and more predictable growth. Within commercialization, I'm going to talk about the new hires and upcoming commercial changes. Based on what we learned in Q1, we are making several changes to align the organization for scale. First, we are strengthening commercial leadership and coordination. The sales organization is being aligned under a full-time vice president of sales role while marketing is being elevated under a full-time vice president of marketing role. This will create tighter coordination across field execution, messaging, account support, digital awareness, and market development from a comprehensive standpoint. Our payer access work will also continue to receive dedicated leadership focus including commercial payers, Medicaid, and managed Medicaid opportunities. Second, We are testing a more targeted regional coverage model. Frequency of visit matters. When we are in person, we are much more successful. To drive clinical buy-in and utilization, our team needs to be in front of clinicians and hospital support teams more consistently. We are piloting territories that allow a representative to cover both children's hospitals and VA accounts within targeted geographies where coverage, demand, and strategic fit justify the investments. This model will be tested and expanded as coverage improves. Third, we are increasing the rigor of our sales training. This includes internal and external training focused not only on product knowledge and clinical data, but payer dynamics, provider economics, and execution discipline. As additional policy coverage comes online, we need the team to be prepared to convert coverage into predictable utilization. Fourth, We are launching a focused initiative around integrative health programs within pediatric GI. Many of our most important referral sources already operate within this model, which emphasizes multidisciplinary care and reduced reliance on medication. We view these programs as an important entry point for broader and earlier IV stem adoption. To support this effort that we see as the future, We are adding a clinical adoption and patient access role with behavioral health expertise. This role will be relationship-driven and patient-focused, helping institutions expand access, integrate IB STEM earlier in the treatment pathway, and operationalize program growth. We will also continue to work with the academic medical societies and other external stakeholders to support a broader integrative care framework.