Earnings Call Transcript
Neuraxis, INC (NRXS)
Earnings Call Transcript - NRXS Q2 2025
Operator, Operator
Good day, everyone, and welcome to the NeurAxis Report Second Quarter 2025 Financial Results. Please note that this conference is being recorded. Now it's my pleasure to turn the call over to Ben Shamsian. Please go ahead.
Operator, Operator
Thank you. Good morning, everyone. Thank you for joining us for NeurAxis Second Quarter 2025 Financial Results and Corporate Update Conference Call. Joining us on the call today is Brian Carrico, CEO of NeurAxis; and Tim Henrichs, CFO of NeurAxis. At the conclusion of today's prepared remarks, we will open the call to questions. If you are listening through the webcast, you can send in through the portal or simply email me. Today's event is being recorded and will be available for replay through the webcast information provided in the press release. Finally, I'd 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 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. 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, now I would like to turn over the event to Brian Carrico, Chief Executive Officer of NeurAxis. Brian, please proceed.
Brian Carrico, CEO
Thank you, Ben. Good morning, and thank you for attending the second quarter 2025 earnings call. During today's call, I will highlight the continued execution of our commercialization strategies for IB-Stim, our neuromodulation technology, and RED, our product for patients with evacuation disorder. These achievements have set the stage for strong growth in the recent quarters and even stronger growth in 2026 and beyond. We will recap Q2 and discuss the milestones and growth plans for the balance of 2025 as we come off an excellent quarter of both execution and growth. Following my remarks, Tim Henrichs, our CFO, will review our financial results for the second quarter of 2025. I want to begin today by focusing on how our efforts continue to translate to revenue growth and why we continue to be bullish on significant revenue growth as we achieve critical milestones and move closer to national insurance coverage and the effective date for the Category I CPT code. While our revenue growth has accelerated in recent quarters, the facts remain that we are still treating virtually no one within the addressable market because national policy coverage and the Category I CPT code have yet to be put in place. The positive change we do see here is largely due to accounts getting more comfortable with billing and coding, physicians seeing the academic society guidelines stating PENFS is one of only a few therapies with the highest rate of evidence, PENFS being the only FDA-approved or cleared treatment recommended in the guidelines, and only minimal medical policy coverage taking effect. On average, selling prices for patients receiving IB-Stim through financial assistance are about 65% below our list price. The insurance barrier continues to cause us to leave significant dollars on the table. As insurance coverage increases across the country, the percentage of sales through the full price purchase orders will also increase. This is why our number one priority continues to be written medical policy coverage as we now know the Category I CPT code will become effective on January 1. Our internal prior authorization team continues to grow and be successful as it reduces the administrative burden on hospital staff and allows greater access for patients and ultimately assist in acquiring a permanent CPT code. We believe that in time, most accounts will move their prior authorizations for IB-Stim to the NeurAxis team as we see more and more added each quarter. I now want to focus on and highlight the catalyst for what we expect to be continued revenue growth in the coming quarters. As we've said several times before, in the perfect world that we have been working toward and are nearing, patients could access blanket medical policy coverage and physicians could utilize a Category I CPT code. For IV stem to be successful at any institution, two key components must be in place. First, insurance coverage is essential to ensure patients can access treatment. Second, provider compensation through RVUs or relative value units is necessary to recognize physicians for their time and expertise. With the assignment of a Category I CPT code, physicians will now receive RVU credit for each placement, aligning clinical value with institutional incentives. Regarding blanket medical policy coverage, we have now reached about 53 million covered lives. We have consistently emphasized that policy-level coverage is the key driver for exponential revenue growth. The academic society and the physicians within the society who treat these patients throughout the U.S. children's hospitals have been aware and are supportive, thanks to robust clinical evidence and peer-reviewed publications in leading medical journals, including the recently published practice guidelines. Still, medical policy coverage in the Category I CPT code are imperative to expand treatment access. Additionally, and as expected, we have numerous payers currently in the review process, and we are cautiously optimistic that the recently published academic society guidelines will bring this evidence-based treatment to policy. The second part of the seamless treatment for patients, along with medical policy coverage is the Category I CPT code. Now I want to talk about the three major milestones that we hit in Q2, including the FDA indication expansion, the publication of the clinical practice guidelines, and the assignment of proposed Category I CPT values. As I just mentioned, we're coming off another strong quarter of year-over-year growth with Q2 coming in at 46%, marking the fourth consecutive quarter of double-digit growth, but more importantly, we hit multiple milestones and now the big picture comes more into focus. These milestones include the indication expansion to functional dyspepsia with nausea symptoms, nearly doubling our market opportunity, the NASPGHAN academic society guidelines being published, and the Category I CPT code with proposed work RVUs of 1.46 RVUs per placement and equally important, strong proposed reimbursement values for the PENFS or IB-Stim procedures. We have been laser-focused on these milestones for years, and they are all coming to fruition as expected as we lead up to the new CPT code becoming effective January 1. We continue to execute at a high level on our growth objectives, rooted in the continued foundation that strong published data will drive coverage expansion, leading to sustainable revenues and margins. We have laid out these objectives in previous calls and are now putting the final pieces in place to allow blanket insurance coverage and in turn, the scaling of PENFS revenues. In recent months, we've made significant achievements as we advance and hit milestones, aiming for cash flow breakeven and profitability. Regarding IB-Stim, we are primarily focused on revenue trajectory. And looking back 4 quarters, we had significant growth of 40% in Q3 of 2024, 43% in Q4 of 2024, 39% in Q1 of this year, and 46% in Q2 of 2025. We continue, as I mentioned earlier, to see only the very beginnings of recent medical policy coverage taking effect. Regarding the guidelines, I will start by saying the clinical practice guidelines are what we expected as we are the only FDA-approved or FDA-cleared treatment in the publication and therefore, the only FDA-approved or cleared treatment that is recommended. This is further validation of clinical acceptance within the pediatric gastroenterologist community. The most important recognition any medical technology can receive is independent guidelines by the academic society because this is an independent review of the literature and a grade is assigned, which the health insurers generally accept as the standard. We announced previously that a systematic review by the academic societies of ESPGHAN and NASPGHAN to the European Society and the North American Society combined were released, showing our technology has the highest grade certainty level and largest magnitude effect. This systematic review has now been published and again, we have been told by the largest payers that this publication is necessary for medical policy coverage. So the question, what are we doing now that the guidelines are out? And how do we see the guidelines affecting the timing of new policy covers? As soon as the guidelines were published, we repackaged all data, academic society support letters, and the guidelines and sent them to the payers where we still need policy coverage. As you may or may not know, payers have annual review dates that span the course of 12 months with some of those review dates coming in the next 60 days and some not coming until Q1 of 2026. For those that come late 2025 and early 2026, we have asked for an interim review and are cautiously optimistic we will be granted this request based on new data in the form of published academic society guidelines. As one example, one significant payer responded to our email request and said they would review the policy in the coming 90 days instead of late Q1 2026. We don't have an exact date, and we don't know when we will be notified of their decision, but they have committed to reviewing sooner. Now I want to talk about the Category I CPT code. As everyone is well aware, we have achieved the company's most important milestone to date in the form of a Category I CPT code, which will allow for more seamless coding, billing, and reimbursement. This is a permanent CPT code that becomes effective on January 1, 2026. The reason this code is so critical is that it brings a permanent code, making it much easier for providers to bill a procedure. It will bring reimbursement amounts for transparency and consistency, and it will provide RVUs, which is how most physicians' productivity is measured. One could argue that physicians in a children's hospital today are treating patients for free because there is not currently work RVUs associated with this time. This will no longer be the case come January 1. As mentioned earlier, the code has been assigned by the American Medical Association CPT Panel and will become effective January 1. Most importantly, the proposed RVU and payment values were released in July, and we are very pleased with those numbers. Furthermore, the Category I code is expected to remove the prior authorization response of no authorization required barrier. Currently, our Category III code receives a no authorization required response about 70% of the time. When a no authorization required is received, the first thing that happens is the patient has no opportunity to get treatment. The current situation means that about 70% of those patients who want to get treatment have no opportunity to get treatment, and we expect this to be nearly eliminated with the Category I CPT code. Now I want to talk about the FDA milestone, the FDA expansion. We've expanded the IB-Stim label to include a patient population beyond the previous 11 to 18 to 8 to 21, which we had mentioned earlier, significantly increasing the number of children we can treat. And just this past quarter, we expanded our FDA indication for functional dyspepsia with nausea symptoms in children 8 to 21 years of age. This is critical because it nearly doubles our market opportunity. Additionally, this indication will rely on the same Category I CPT code, the same children's hospitals, the same call point within the children's hospital as the pediatric gastroenterologist physician and will utilize the same commercial sales force and marketing force that we have in place today. We expect revenue growth to accelerate meaningfully as we move toward our goal of cash flow breakeven based on two catalysts, the continued increase of payer medical policy coverage combined with the new CPT code becoming effective. I want to now speak about RED, the rectal expulsion device product, which we continue to believe to be a great opportunity for NeurAxis. We're still in the soft launch phase, but getting closer to a hard launch commercial effort. The current treatment involves much trial and error by the physician as to which treatment will work, and RED will allow the physician to choose the best treatment option for patients with chronic constipation after the first visit, which is a win for the patient. Because the technology already has a Category I CPT code assigned to the procedure and strong national reimbursement, we are beginning to see the providers not only bring this clinically, but be able to see financial benefit to the practice. As we continue the soft launch, we are learning a lot about the workflow and reimbursement, which will allow us to go into a hard commercial launch with the necessary information. In summary, we couldn't be more pleased with continued execution, especially the milestones this past quarter relative to future growth. We have been talking for some time about these critical milestones and seeing them come to life is good for all shareholders, but most importantly, for the 1 million debilitated patients in need of PENFS or IB-Stim. As we look ahead, our priorities remain focused on continuing to secure broad medical policy coverage and advancing disciplined commercial execution to drive utilization and scale. I will now turn the call over to our CFO, Tim Henrichs, to discuss the financials.
Timothy Robert Henrichs, CFO
Thank you, Brian, and let me add my welcome to everyone joining us on this call. These financial results were included within our press release, which was issued earlier and were also provided in more detail within our 10-Q. I will add some color on key areas of the financial results as well as an outlook on certain areas. The second quarter of 2025 marked the fourth straight quarter of double-digit revenue growth year-over-year, and this growth is marginally reflective of the significant milestones that we recently achieved through the FDA indication expansion to functional dyspepsia with nausea, the published NASPGHAN Academic Society guidelines, and the release of the proposed Category I CPT code, RVUs, and reimbursement. We are proud of these achievements and our market penetration, albeit small at this point, despite the fact that we are in the early stages of our ramp as we expect the number of covered lives to continue to grow as we approach the new CPT code effective date of January 1. In addition, we continue to be optimistic with the commercialization of RED through our soft launch in 2025. We expect revenues to continue to grow in the second half of the year as new physician offices set up clinics and continue to place orders as they work the device and procedure into their patient workflow. These operational and clinical achievements, coupled with our current revenue growth trend, strong gross margins, and operating expense leverage demonstrate that our goal as a company to reach cash flow breakeven remains achievable. With that, I'll go into the financial highlights in more detail. Revenues in the second quarter of 2025 were $894,000, up 46% compared to $612,000 in the second quarter of 2024. Revenue for the 6 months ended June 30, 2025, increased $531,000 to $1.8 million, up 42% compared to $1.3 million for the 6 months ended June 30, 2024. Unit sales increased approximately 58% and 53% for the 3 and 6 months ended June 30, 2025, respectively, compared to prior year due to volume growth from patients with health insurance coverage and the company's financial assistance program that provides discounts to patients without coverage. Given the achievement of the recent milestones, we expect revenue growth to continue in the second half of the year prior to the effective date of the Category I CPT code, given the strong demand and acceptance on the part of health care providers and patients for our products. Gross margin in the second quarter of 2025 was 83.6% compared to 88% in the second quarter of 2024. Although we saw an increase in sales volume, the 440 basis point decrease year-over-year was due to higher discounting in the company's financial assistance program provided to patients without health insurance coverage and expired RED inventory. The higher discounting was a function of financial assistance patients with lower income levels than we've experienced in the past. Gross margin for the 6 months ended June 30, 2025, of 84% decreased from 88.2% for the 6 months ended June 30, 2024, due to a higher growth rate of the financial assistance programs over patients with full health insurance coverage, higher discounting in the company's financial assistance program provided to patients without health coverage for PENFS and expired RED inventory. Despite the current decline in gross margin due to a higher mix of financial assistance patients, we expect our gross margin to recover into next year because when the new CPT code becomes effective on January 1, the devices currently sold at a discount will eventually fully transition to full revenue with insurance coverage. This will boost both our future revenues and gross margin. Total operating expenses in the second quarter of 2025 were $2.5 million, a decrease of 10% compared to $2.7 million in the second quarter of 2024, primarily due to the absence of certain one-time nonrecurring severance, consulting, and advisory costs incurred in 2024 and lower accounting, investor relations, insurance, and advertising costs as new hires have internally absorbed certain services, partially offset by third-party costs incurred to enhance the company's internal control environment, higher selling expenses due to higher sales volume, and higher R&D expenditures. Total operating expenses for the 6 months ended June 30, 2025, of $5.5 million increased 7% compared to $5.1 million for the 6 months ended June 30, 2024, due to the settlement of a lawsuit. Excluding the one-time legal settlement charge, the company's operating expenses would have decreased 5% compared to the prior year. Selling expenses in the second quarter of 2025 were $142,000, a 128% increase compared to $62,000 in the second quarter of 2024. Selling expenses for the 6 months ended June 30, 2025, of $276,000, a 94% increase compared to $142,000 for the 6 months ended June 30, 2024. The increases in both cases were due to higher sales volume and temporary commission structures to facilitate growth and adoption in new states. Research and development expenses in the second quarter of 2025 were $58,000, an increase of 7% compared to $54,000 in the second quarter of 2024. Research and development expenditures for the 6 months ended June 30, 2025, were $108,000, an increase of 80% compared to $60,000 for the 6 months ended June 30, 2024. The increases were due to higher year-over-year spending on a medical research project and the cost to develop the RED device that was soft launched in 2025. General and administrative expenses of $2.3 million in the second quarter of 2025 were 14% lower than the $2.6 million in the second quarter of 2024. The decrease was due to the absence of certain one-time nonrecurring severance, consulting, and advisory costs incurred in 2024 and lower accounting, investor relations, and insurance costs as new hires have internally absorbed certain services, partially offset by third-party costs incurred to enhance the company's internal control program. General and administrative expenses of $5.1 million for the 6 months ended June 30, 2025, were 4% higher than the $4.9 million for the 6 months ended June 30, 2024, due to one-time nonrecurring charge to settle a lawsuit, third-party costs incurred to enhance the company's internal control environment, and the introduction of annual short-term and long-term incentive plans in 2024 that were not outstanding for the full fiscal year, partially offset by the absence of certain one-time nonrecurring severance, consulting, and advisory costs incurred in 2024 and lower accounting, investor relation and insurance costs as new hires internally absorb certain services. Excluding the one-time legal settlement charge, general and administrative expenses would have decreased 9% year-over-year. In addition to our ability to grow revenue prior to the effective date of the CPT code, we are also pleased with our progress in achieving operating expense leverage without sacrificing that top line growth. Our goal of reaching cash flow breakeven is not only a function of revenue growth, but will be accelerated by our demonstrated ability to deliver operating expense leverage. Operating loss in the second quarter of 2025 was $1.7 million, a decrease of 22% compared to a $2.2 million loss in the second quarter of 2024. The operating loss for the 6 months ended June 30, 2025, of $4 million was relatively flat compared to the 6 months ended June 30, 2024. Excluding the one-time legal settlement charge, the company's operating loss for the 6 months ended June 30, 2025, would have improved 16% compared to the 6 months ended June 30, 2024. Net loss in the second quarter of 2025 was $1.7 million, a decrease of 42% compared to $2.9 million in the second quarter of 2024. The net loss for the 6 months ended June 30, 2025, was $4 million, a decrease of 21% compared to a $5 million loss for the 6 months ended June 30, 2024. Excluding the one-time legal settlement charge, the company's net loss for the 6 months ended June 30, 2025, would have improved 34% over the 6 months ended June 30, 2024. Cash on hand as of June 30, 2025, was $6 million. We secured $5 million in the quarter through an equity-only financing round backed by both existing and new institutional investors. In addition, we raised an incremental $1 million through the exercise of common stock warrants. Cash used in operations for the 6 months ended June 30, 2025, of $3.1 million was $124,000 higher than the $2.9 million cash used in operations for the 6 months ended June 30, 2024, primarily due to higher inventory purchases to support sales growth and the 2025 payments of the 2024 short-term incentive program, partially offset by increased cash collections. Our $3.1 million year-to-date cash burn is consistent with our previous guidance of $1.5 million per quarter, and we have no long-term debt.
Brian Carrico, CEO
Thank you, Tim. To summarize, while we have recently achieved several critical milestones, we are still in the very early stages of what we expect to be substantial top and bottom line growth over the coming quarters. Our disciplined execution of the commercialization strategy is starting to deliver tangible results as evidenced by the accelerating growth in the past quarters. We are also strengthening the foundation for future expansion, highlighted by the Category I CPT code, expanded indications, and RVU assignment and values to reimbursement. With that, operator, we'd be happy to take any questions.
Operator, Operator
One moment for our first question please. It comes from the line of Chase Knickerbocker with CHLM.
Chase Richard Knickerbocker, Analyst
Congrats on the quarter. So maybe just first, Brian, could you share any kind of perceptions that have come across in conversations with any of these larger insurance plans that you've been talking to post guideline publishing as far as their perceptions on the guidelines and kind of how they're thinking about it? And if you don't have that kind of direct feedback, anything that you think is worthwhile sharing as far as what the perceptions of the guidelines may be from those key stakeholders?
Brian Carrico, CEO
Yes, Chase, I would say that over the last 2 to 3 years, we have built a good relationship from a response standpoint with the majority of the 12 payers that we're still targeting. Since we've released the guidelines, I believe we've gotten responses from all 12. The responses have been, I would say, faster than normal. For example, one payer has agreed to do an interim review due to the guidelines. We take that as positive. I believe we have 17 insurance plans nationally at this point. Full transparency, I would say the responsiveness to the emails and the guidelines from the payers has been very favorable. Two or three payers have expressed very favorable responses, and the likelihood for coverage in the fall is very good. So overall, it's positive. But again, this is one thing we cannot control: how quickly payers write policy coverage or if they wait until their annual review or conduct an interim review. As a reminder, these 12 primary payers account for roughly 175 million to 185 million covered lives. There has been nothing negative from them, so I hope that addresses your question.
Chase Richard Knickerbocker, Analyst
No, it does, Brian. Maybe just kind of off that, do you have any goals as far as how you hope to have that coverage come in as far as what it looks like from a prior authorization perspective? Any sort of steps that you're expecting now, post seeing the guidelines, and speaking with physicians?
Brian Carrico, CEO
Well, as some callers may know, based on previous plans, some most plans require a prior authorization, and some do not. Most plans require a step therapy where patients have to fail one or more medications. After the guidelines, which clearly show that the medications have low to no evidence, our expectation is that those medication requirements will be removed. I believe that will be a longer process, and it won't happen in every policy initially. The push from the academic society and physicians is that IB-Stim should be used earlier in the treatment cycle as a first line option. Many children's hospitals are already offering it that way. So the guidelines have been extremely helpful, and our expectation is to have the medications removed as a first-line treatment by the payers. However, there will be variability across different policies.
Chase Richard Knickerbocker, Analyst
Got it. And maybe just on the sales force. If we think about the next stage of growth and kind of preparing for that with some sales force expansion, is the trigger for something like that a larger coverage policy coming in? Or maybe talk about how you see the ramping of the business as far as the trigger for the sales force expansion?
Brian Carrico, CEO
The urgency on the payer policy side is met in parallel with the urgency on the commercial side. On the commercial side, we've had these relationships for several years, and the bias among these physicians is high. So yes, we plan to expand the sales force as we get larger insurance policy coverages. That said, many children's hospitals today do not allow lunches, dinners, etc. So much of the work is done through Zoom, phone calls, academic meetings, etc. Our focus between now and January 1 will involve a multi-pronged approach from our marketing director, which includes key opinion leaders speaking nationally to ensure physicians are well-informed, not just in daily practice but across their entire division. The goal is to establish multiple IB-Stim clinic days within practices to ensure efficient patient treatment scheduling. Therefore, marketing and clinician outreach are equally important as expanding the sales force. We are investing significantly into marketing, key opinion leader engagement, and speaking series scheduled for early January to maintain visibility and drive demand for this technology.
Lindsay Leeds, Analyst
Congratulations on the milestones you achieved in Q2. I wanted to ask about the 65% discount rate on most of the devices you are selling today, and that about 70% of these devices are not covered by insurance. Could you elaborate on this and whether the devices being purchased now are primarily paid for in cash?
Brian Carrico, CEO
Yes, let me break that down. This can be very confusing if I don't go from macro to micro. From a macro level right now, if our prior authorization team receives 100 patients, about 70 of those off the top get a no authorization required response. This means they can't be treated unless they pay full cash price of $2,900, which is the price without insurance, and that option is seldom utilized since patients typically prefer to use their health coverage. Among the remaining 30, it's a 50-50 split between full approval and the patient assistance program. So about 15 out of the 30 are receiving the full price at $1,195, and the other 15 go through the patient assistance program, where federal guidelines related to income determine their assistance. On average, they are paying about 65% below the full price. Hence, when you mix that, it translates roughly to an approximately $850 average selling price. So, the 70% denied in the prior authorization process significantly impacts how much revenue we can capture. Eventually, we expect to see increased acceptance rates as more positive policies roll out with the new Category I code.
Lindsay Leeds, Analyst
That was a great explanation. So let's say there's not coverage for the device today with an insurer, is there any recourse at all?
Brian Carrico, CEO
Yes, if a patient goes through prior authorization and receives a denial, they can appeal the decision. Once the patient gets a prior authorization response, there are 1 of 3 outcomes: approved, denied, or no auth required. If the patient is denied, appeals can be pursued; if approved, then the treatment can proceed. If it’s no authorization required, sadly, the patient can either opt for the full cash price, which many times is not pursued. We don’t have access to the agreements between the children's hospitals and payers along with medications involved, but we do encourage patients to utilize the appeal processes where applicable.
Lindsay Leeds, Analyst
Is there any movement with you getting approval for adults to use the IB-Stim device?
Brian Carrico, CEO
Yes, that's in our pipeline. We've submitted that to the FDA, and we're in conversations with them. I think it's likely that we'll have an answer by the Q4 call, one way or the other on the response from the FDA.
Operator, Operator
We have some questions that were sent to us regarding RVUs and reimbursements. Are you satisfied with the recommendation? And how do you see the reimbursements moving forward now that you have the academic society guidelines?
Brian Carrico, CEO
Yes. We're very satisfied. As I mentioned on the call, we are the only FDA-approved or cleared treatment in the guidelines. The guidelines are written by an academic society; they're crucial to payers. So, we are pleased with these results. The response from payers has been timely and positive regarding the RVUs and reimbursements. The RVU of 1.46 is favorable, exceeding our expectations. For reference, the reimbursement rates released were also positive, and the Medicare and Medicaid rates forecast higher than the device cost itself, which is encouraging news for children's hospitals.
Operator, Operator
Can you talk about the G&A line this quarter, but also in general expenses and leverage going forward?
Timothy Robert Henrichs, CFO
In the second quarter of 2025, we demonstrated our ability to grow the top line while achieving operating expense leverage at the same time. Post IPO, we were engaged with certain third-party service providers that contributed to a higher cost structure. We hired dedicated employees to deliver those services better and at a lower cost. Additionally, we negotiated with vendors to reduce costs for similar services, which has resulted in lower SG&A expenses overall. I expect to see similar operating expense leverage in the latter half of 2025 as we continue to analyze our cost-savings efforts. However, we will continue to increase spending in specific areas like sales headcount, advertising, and research and development because we expect returns on these investments. Our focus will remain on supporting growth while managing general and administrative costs effectively.
Operator, Operator
Can you speak about your second indication, functional dyspepsia? How will you leverage the investments you've already made for IBS to go to market on the new indication?
Brian Carrico, CEO
Yes. This indication nearly doubles our market opportunity. There are medications that have shown some benefit off-label but can be harmful to children. In contrast, we believe these patients are in greater need than those with functional abdominal pain. We are utilizing the same sales force and call points for this new indication, and it is covered under the same CPT code. I am optimistic - all 17 of our positive policies will have functional dyspepsia listed as a benefit. This progress provides encouraging momentum for us.
Operator, Operator
Can you speak about your current cash balance? And where do you see that taking you?
Timothy Robert Henrichs, CFO
In the second quarter, we successfully capitalized on investor support for our long-term growth prospects after receiving FDA approval for the IB-Stim device related to functional dyspepsia, significantly expanding our total addressable market. In May, we raised $5 million through a registered direct offering to institutional investors and another $1 million through the exercise of common stock warrants. Our cash position as of June 30 was $6 million, providing enough liquidity through the first half of 2026 based on our current cash burn rate. However, expected insurance coverage improvements and expense leverage could positively extend our liquidity position later into 2026.
Operator, Operator
And at this point, there are no more questions in the queue. I would like to turn the call over to Brian Carrico for closing remarks.
Brian Carrico, CEO
Thank you. I don’t have anything else. I hope everyone had a nice summer and has a nice fall. I look forward to anyone that has additional questions reaching out through Ben Shamsian to set up a call. Otherwise, we'll talk to everyone in about 90 days. Thank you.
Operator, Operator
And with that, ladies and gentlemen, we conclude our program for today. Thank you all for participating, and you may now disconnect.