Neuraxis, INC Q1 FY2026 Earnings Call

Good day, and welcome to the NeurAxis First Quarter Fiscal Year 26 Financial Results Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press *1 on a touch-tone phone. To withdraw your question, please press *2. Please note this event is being recorded. I would now like to turn the conference over to Behnam Shamsian, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Thank you for joining us for NeurAxis' First Quarter 26 Financial Results and Corporate Update Conference Call. Joining us on today's call is Brian Carrico, CEO of NeurAxis, and Timothy Henrichs, 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 would also like to call your attention to the customary safe 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 and operational results of NeurAxis. 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. NeurAxis 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 Carrico.

Chief Executive Officer of NeurAxis. Brian, please proceed.

Thank you, Ben, and good morning to everyone joining us. Good to talk to everyone again. Quarter 26 was an important quarter for NeurAxis. I talked a little bit about this on the last earnings call 6 or 7 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, Timothy Robert Henrichs, our CFO, will review our financial results for the first quarter of 2026. For the first quarter 26, revenue was $1.6 million, compared with $896 thousand in Q1 2025, representing 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 the demand is strong where access barriers are reduced and healthcare providers 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 mix shift toward covered and reimbursed procedures and away from discounted financial assistance channels. That mix shift is important because it supports stronger revenue quality, margin potential, and long-term scalability. Some key first quarter highlights include: as we have discussed, the Category 1 CPT code for PENFS became effective on January 1st. It created 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 a 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-Stim 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 IB-Stim adoption are now much better defined, and that gives us a far more actionable roadmap. Now I want to talk about insurance status. Insurance policy coverage remains the single most important driver of scalable growth. Quarter 1 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 are focused on expanding written medical policy coverage while also improving the practical aspects that allow hospitals and providers to treat patients efficiently once coverage exists. Our payer outreach now includes multiple parallel channels: continued direct engagement with payers and their medical policy teams; implementation of the CPT code 64.6 thousand on fee schedules across state Medicaid programs where new codes are not yet fully loaded; physician and KOL-driven advocacy to reinforce 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-Stim 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 64.6 thousand 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 a set of 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 will discuss is revenue: $1.6 million in Quarter 1 2026, $896 thousand in Quarter 1 2025. This is the top-line performance under the first quarter with Category 1 CPT code in effect. IB-Stim average selling price (ASP) is $1,020 versus $766 in 2025, up 33%. This shows reimbursement mix shift and revenue quality. Total covered lives remained steady at 101 million. Quarter 1 internal prior authorization approval percentage: this is 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; we do not 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 1, compared to a 12% approval rate throughout the year of 2025. Quarter 1 number of ordering accounts: we had 66 accounts order IB-Stim in the first quarter, compared to 56 accounts in 2025, up 18%. That shows the breadth of adoption and concentration risk. The final KPI I will share, and Timothy will talk about some of the financial KPIs, is quarter 1 revenue per ordering IB-Stim account. You could back into this number, but I will give it to you: $24 thousand per account on average that ordered in quarter 1 versus $16 thousand per account in Quarter 1 2025, up 53%. Now I want to talk about 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 IB-Stim clinic capacity. During the first quarter, we continued direct engagement with the children's hospitals that have previously treated with IB-Stim. 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 payer mix; at least one engaged physician champion who understands 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 disciplined 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 am 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 payer-access standpoint, our 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 and VA accounts within targeted geographies where coverage, demand, and strategic fit justify the investment. 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 IB-Stim 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-Stim 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. Fifth, we are actively pursuing additional talent in areas that can accelerate adoption, including medical science liaisons to ensure the clinical evidence is well understood and top of mind; a market development specialist to communicate the economic and operational value of IB-Stim to administrators and hospital stakeholders, which has been very favorable based on Q1 feedback; digital marketing leadership to improve physician and patient awareness in targeted covered markets; sales professionals in markets with adequate payer coverage and clear utilization potential; and personnel with direct VA experience who can help accelerate adoption inside the federal system. Finally, we are preparing what we refer to internally as a strategic market initiative for select regions. This concept is to coordinate payer access, field execution, clinical education, market development, prior authorization support, digital awareness, and patient-facing messaging in the same targeted markets. The objective is to create local intensity. The overall principle is simple: coverage unlocks the opportunity, but execution determines the level of growth. As you can see, we have turned, as we said we would do, to a commercial focus and very much so a comprehensive commercial focus. Okay, last, I want to spend a few minutes on the VA opportunity. As previously announced, we were awarded a federal supply schedule contract enabling commercial access to the U.S. Department of Veterans Affairs. The VA healthcare system serves nearly 7 million active patients annually, and functional dyspepsia is estimated to affect approximately 3 percent of that population. Given typical VA adoption timelines, we did not expect meaningful Q1 orders. However, we are already seeing multiple VA facilities placing orders and many more moving through the activation process—more than we thought would be the case. That early activity is encouraging and reinforces our belief that the VA can become a meaningful channel over time. The pediatric commercial market remains our primary focus, but the VA represents a complementary opportunity with several attractive characteristics: a large patient population with significant unmet need, centralized federal purchasing infrastructure, a pathway that is not dependent on commercial payer coverage in the same way as the broader non-VA adult market, strong alignment with nondrug approaches for chronic functional GI conditions, and the potential to leverage experienced VA-focused personnel and clinical education resources. We are actively dedicating commercial resources to this channel and evaluating hires with proven VA commercialization experience. As utilization data and clinic adoption develops, we expect to expand our footprint in a disciplined way. More broadly, for the adult IB-Stim opportunity outside the VA, we continue to believe that broad medical policy coverage will likely require a large randomized controlled trial. We have executed an agreement with the Cleveland Clinic and Stanford University to conduct a randomized controlled trial evaluating IB-Stim in adult patients with functional dyspepsia. That study is designed to generate the evidence needed to support future adult medical policy coverage while our near-term commercial focus remains children's hospitals and the VA. To summarize, Q1 was successful for two reasons. First, performance modestly exceeded our expectations and demonstrated strong demand where access barriers are reduced. I should clarify: the strong demand is across the board; the strong results were where access barriers are reduced. Second, and more importantly, the quarter gave us a clear understanding of the drivers and constraints of adoption. The most important conclusions are: written medical policy coverage is essential to national scale and broad adoption that we all expect; the strongest accounts have payer coverage, a physician champion and dedicated IB-Stim clinic time; a CPT code alone does not create coverage, but it is a critical piece of the reimbursement infrastructure; commercial execution must be concentrated in markets where coverage and demand already exist; clinical reinforcement, administrator education, prior authorization support, and digital awareness are all necessary to convert access into utilization. The VA is emerging as a meaningful opportunity alongside our primary pediatric commercial focus. At this stage, success is straightforward in concept, though complex in execution: expand payer coverage and execute with intensity in the markets where strong coverage exists. We are moving decisively on both fronts. We have never been better positioned operationally, commercially, or strategically. While monthly revenue may fluctuate and payer coverage timing remains difficult to predict, the underlying demand is becoming increasingly clear. We believe the progress underway in 2026 represents the beginning of a multiyear growth cycle for NeurAxis. With that, I will now turn the call over to Timothy Robert Henrichs, Chief Financial Officer, to discuss the financial results in more detail.

Timothy? Please proceed.

Thank you, Brian, and I appreciate everyone joining us on this call today. These financial results were included within our press release which was issued earlier this morning and were also provided in more detail within our 10-Q, also filed this morning. Similar to prior calls, I will dive into key areas such as our financial results, liquidity position, and elements of an outlook given the momentum we saw here in 2026. We have continued our growth streak as 2026 marks the seventh straight quarter of double-digit revenue growth year over year. Fiscal year 25's milestones, including the Category 1 CPT code that became effective January 1, FDA indication expansion into more clinical treatments in the adult population, the federal supply schedule opening the Veterans Affairs health system to IB-Stim and PENFS, and significantly more medical payer coverage set us up well for a 2026 growth story of not only revenue, but gross margin expansion and operating expense leverage. We believe we are positioned very well to deliver on our commitments to both our patients and investors. So let's dive into the financial highlights in more detail. Our revenue in Q1 2026 of $1.6 million was up 80% compared to $896 thousand in 2025. In fact, Q1 2026 marked the strongest quarterly revenue performance in the company's history. IB-Stim unit deliveries for Q1 2026 increased 32% compared to the prior year due to volume growth from patients with full reimbursement coverage, a continuation of what we saw in 2025 and a market shift from our historical mix of the company's discounted financial assistance program, outpacing the growth of higher-margin full reimbursement payers in the past. As a direct result of that payer mix shift, our IB-Stim average selling price increased 33% as Brian mentioned previously, from $766 per device in 2025 to $1,020 per device in Q1 2026. Our largest insurance payer, which we picked up in 2025, was a key contributor in the lift of the ASP in addition to broader acceptance of the IB-Stim device as a result of the Category 1 CPT code. And given the Category 1 CPT code has been effective only since January 1, we expect a positive mix shift on revenue and gross margin that I will discuss next to continue. Gross margin in 2026 was 86.4%, compared to 84.4% in 2025. The 200-basis-point expansion is a direct result of the adoption of the Category 1 CPT code and increased payer coverage as our unit growth shifted from discounted financial assistance to full reimbursement payers. Although our current market strategy is targeting all payers, our efforts to achieve more insurance coverage are particularly focused on the largest payers. We expect that success in that venture will continue to push our gross margins higher in future quarters due to the adoption trend we experienced here in 2026. Total operating expenses in 2026 were $3.1 million, an increase of 3% compared to $3.0 million in 2025. We measure, manage and present our operating expenses along three functions: selling, research and development, and general and administrative. Consistent with 2025, we reclassified $366 thousand from general and administrative expenses into selling and research and development costs respectively in 2026 to conform to the current period and provide a more transparent presentation as these costs are leading indicators of our future success. Selling expenses in the first quarter of 2026 were $824 thousand, a 65% increase compared to $500 thousand in 2025. The increase is due to sales commissions that are directly related to our higher sales volume and additional sales reps and marketing personnel to leverage the IB-Stim Category 1 CPT code and increased payer coverage. Research and development expenses in 2026 were $100 thousand, a decrease of 16% compared to $118 thousand in 2025. The decrease is reflective of proceeds received for devices used in 2026 clinical research studies. Excluding those proceeds, year over year, R&D expenses would have increased 45%. General and administrative expense of $2.2 million in 2026 declined 9% compared to $2.4 million in 2025. The decrease was due to the absence of a one-time nonrecurring legal settlement charge in 2025, partially offset by incremental stock compensation expense from the third year of a three-year vesting plan, higher benefit costs, and consulting fees related to the federal supply schedule agreement allowing us to sell to the U.S. Department of Veterans Affairs. Our operating loss in Q1 2026 was 17% lower compared to a $2.3 million loss in 2025, and our net loss in 2026 was 18% lower compared to $2.3 million in 2025. Our higher gross profit from increased quarterly sales year over year and the absence in 2026 of a one-time nonrecurring legal settlement charge incurred in 2025 was partially offset by higher selling expenses directly attributable to the higher volume in 2026. As for liquidity, cash on hand as of March 31, 2026, was $7.1 million. Our free cash outflow in 2026 was $1.2 million, $391 thousand better than our quarterly burn rate of $1.6 million in 2025 due to a lower operating loss, primarily a result of the growth due to the Category 1 CPT code and increased payer coverage, as well as more efficient working capital utilization. Since then, we have continued to improve our liquidity position into 2026 by raising an incremental $2.1 million to our at-the-market equity facility and through continued exercise of warrants from investors. Our current cash balance is approximately $8 million. Our balance sheet provides us with sufficient capital to execute on our growth plans with no near-term need for additional financing at this time. We do believe we will achieve cash flow breakeven in the future, but that goal is dependent on the continuation of our growth trajectory to reduce our current cash burn. Our current burn in the first three quarters of 2025 was approximately $1.5 million, increasing to $2 million as we appropriately built working capital such as inventory in anticipation of the January 1, 2026 effective date for the PENFS Category 1 CPT code. That compares to our current cash burn of $1.2 million in 2026 as evidence of our progress toward that goal. And with that, I will turn the call back over to Brian.

Thank you, Timothy. With that, operator, we will be happy to take any questions.

We will now begin the question-and-answer session. To ask a question, you may press *1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press *2. The first question today comes from Chase Knickerbocker with Craig Hallum. Please go ahead.

Good morning. Thanks for taking the questions. Maybe I wanted to start on breadth versus depth—kind of how you are seeing that trend, Brian, not only since the last update, but if you could maybe give us your thoughts as things have started to materialize now, you know, four or five months into the year. How you expect 2026 to play out from a depth with your best customers and then how that is trending and then how you expect to expand accounts maybe based on the pipeline of those accounts that are starting to establish IB-Stim clinic days. Thanks.

Yeah. Morning, Chase. Let's talk breadth first. For breadth, I will give you an example. I think our record in 2025 was something like 37 or 39 accounts ordering in one month, and in Q1, it was something like 44, and we have seen that expand. I am not going to get into Q2 specifics, but we have seen that expand. So we are seeing more accounts. I think our average in 2025 was something like 30 accounts, and I believe Q1 average was high thirties. So that is up 25% to 30%. We are seeing more accounts order, and that is primarily directly related to the Category 1 CPT code and the ability to bill. So we are seeing more accounts order. From a depth standpoint, we were pretty top-heavy. We were more top-heavy in Q1 with our top 10, 15, or 20 accounts than we were in 2025. That makes sense because the top accounts that had IB-Stim clinic time were bought in, and the Category 1 code allowed them, combined with the big payers that came through, to get more approvals. So they were already active. When you have newer accounts coming on, they always start slowly—treat one patient a month or two patients a month—and then they begin to grow. So as Q1 went on, we saw more accounts ordering, and we saw the accounts at the top continuing to order more as they got more comfortable with the Category 1 code and the insurance coverage that is in place. That has expanded into Q2. We continue to see both new accounts ordering and more mature accounts increasing volume. Everyone across the board continues to order more as they get comfortable with the Category 1 code. So both breadth and depth are increasing. We are not trying to sell to 260 children's hospitals tomorrow. We are being laser-focused in areas where we have good insurance policy coverage, a champion in place, and IB-Stim clinic time because we know the opportunity there is significant and they are comfortable with the billing and reimbursement. That is our real focus: depth. Of course, we are adding new accounts, and you will see that in the KPIs as we move throughout the year. But we are really focused on when I talk about this comprehensive model of involving new hires and the economic side, meeting with stakeholders, and getting physicians, chiefs, chairs, chief revenue officers, and CFOs in a room. That is generally at the top 10, 15, 20 accounts where we know the revenue opportunity is significant. They are seeing strong reimbursement where there is policy coverage, and we are trying to grow deep and wide as quickly as possible in those accounts. Simultaneously, in parallel, we are opening new accounts and beginning to have those conversations. There are multiple levels of development for a new account: they become a new account, then as time goes on and they see reimbursement they get more comfortable with placements and clinic time, and they begin to expand the program. That is really what we learned in quarter 1. We suspected it, but now we have learned more detail around that, and that is why we are adding specific people to carry out specific roles to grow depth because the opportunity in one average-sized children's hospital is immense, not to mention the bigger programs.

And so if we think about, you know, you mentioned the payer dynamics in the quarter and what it might take to get broad swaths of volume from specific accounts, do you have a sense of what that tipping point of coverage has to be in an account before that account is one of your top 10 from a depth perspective? Like, what it takes for them to really adopt IB-Stim as standard of care.

Well, to be more front-line, it's got to be a minimum 50%, closer to 60% or 70%. Now the good news, Chase, is that we are seeing significant approvals and coverage and payment for Medicaid now that many state Medicaids do not write explicit policy coverage. Now that the CPT code 64.6 thousand is on the fee schedule in many states—I'd even say most at this point, although there are delays—that helps significantly because Medicaid can be anywhere from 20% to 40% of an account depending on geography. Historically, from our internal prior authorizations in 2025, about 19% of the patients we received were Medicaid and 81% were commercial. So just because a hospital's payer mix is 40% Medicaid does not mean this particular patient population is 40% Medicaid; it's generally in the 20% range. To answer your question more directly: it needs to be at least about 50% and really closer to 60% or 70% for them to be able to offer this broadly. That level significantly reduces reliance on patient assistance programs and increases reimbursement certainty.

Understood. And then maybe just one last one for me. Timothy, can you maybe give us some thoughts on how you see SG&A trending given some of the incremental hires we discussed on the call?

Yeah. On the SG&A front, in the first quarter we were in more of a holding pattern as we waited to see what was going to happen with the Category 1 CPT code. Now that we know growth is there, as Brian pointed out, we have in some cases begun to hire on the sales and marketing front so that we can continue to drive the top line. As we look through the rest of the year, I do expect selling and marketing expenses to tick up, which is different from our viewpoint in the first quarter when we were waiting to see the CAT 1 code take effect. The second thing to call out is that in the second quarter we do expect to have a charge, a stock compensation charge as we disclosed in the subsequent event section of our financial statements which has been put forth to shareholders and which we will know on June 10th. It involves cancellation of stock options and the exchange/reissuance of restricted stock units. There will be a charge in excess of $4 million that I expect. The exact amount is a fair value measurement per GAAP and we will not know it exactly until June 10, but that is the expected range. There will be that charge in the second quarter, but again it will be one-time and largely noncash. So I expect G&A to hold at the trend that we have, I expect selling and marketing expenses to ramp up, and then we will have that one-time charge in the second quarter when we report next in the August timeframe.

Understood. Thanks, guys.

We now have a few questions that were sent in. First: will you provide VA revenue separately in the future? What is your projected burn rate? And what is the revenue required to reach profitability?

Yeah. I will start with the VA conversation. Likely, at some point in the future, we will break down VA versus pediatric children's hospitals. We might do that; I do not know exactly when. At some point, we will likely break that down. We are putting commercial focus—both marketing and sales, medical science liaisons—and bringing people in who have relationships in that area. As far as cash flow breakeven, that is a Timothy question.

I think there are two questions there. Investors often care about cash flow breakeven versus P&L breakeven; that would need clarification. On the burn rate, in the first quarter our burn rate came down to $1.2 million based on what we saw in the first quarter. I expect that to continue to decline through the rest of the year and into 2026. From a guidance perspective on a quarterly basis, I think we will be looking at about a million dollars or less for the rest of the year. To think about cash flow breakeven: our operating loss for the quarter was about $1.7 million. Our variable margin rate is approximately 75%. So if you take that $1.7 million and divide by 75%, that gives you about $2.2 million for the quarter. Turned out for a full year, that equates to about $9 million of incremental revenue needed above the current pace in the first quarter. Our first quarter revenue was $1.6 million, which annualizes to about $6.4 million. Adding the $9 million incremental needed puts the rough revenue target for cash flow breakeven at about $15 million, given our current SG&A and variable margin assumptions. That is the current trajectory based on our SG&A and our variable margin rate and assumes no material changes to fixed costs beyond our planned investments.

The next question refers to the KPIs: what is the target prior authorization approval rate?

Well, the target is, of course, 100%, but realistically no product or therapy achieves 100% coverage. We need to get into the 80% range. There are four or five key payers that would probably get us there. It takes significant time, energy, and resources, including connections to ex-medical directors and ex-executives to address this. In the last few months we have learned more than ever that this is not about payers saying no; it's about getting the attention of the right people and having the conversation. We are making significant progress and are extremely confident in where we are, but I cannot give you an exact timeline.

Again, if you have a question, please press *1. At this point, there are no more questions in the queue. Therefore, I would like to turn the call over to Brian Carrico for closing remarks.

I appreciate everyone joining. If you have additional thoughts or questions, please schedule a time through Behnam Shamsian or myself. Happy to have conversations around the talking points we had today. Everyone, have a great rest of your day and rest of your week. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.