What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-09 · 321 added, 306 removed, 795 unchanged (44% of the section changed)

1 unchanged sentence

Balance Sheets

June 30, 2024

September 30,

Current Assets:

1 unchanged sentence

Accounts receivable, net

Inventories, net

Prepaids and other current assets

6 unchanged sentences

Intangible assets, net

Security Deposit

Current Liabilities:

3 unchanged sentences

Notes payable

Notes payable - convertible notes, net of unamortized debt discount of $ 206,464

as of June 30, 2024 and December 31, 2023, respectively

Customer deposits

8 unchanged sentences

Stockholders’ Deficit

Convertible Series A Preferred stock, $ 0.001 par value;

Convertible Series A Preferred stock, $ 0.001

0 and 1,000,000

shares authorized;

0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Convertible Series Seed Preferred stock, $ 0.001 par value;

shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Convertible Series Seed Preferred stock, $ 0.001

0 and 120,000

shares authorized;

0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Convertible Series B Preferred stock, $ 0.01 par value;

4,000,000 shares authorized, 2,073,524 and 0

shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Preferred stock, value

1 unchanged sentence

100,000,000 shares authorized;

6,841,621 and 6,508,897 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

6,980,227 and 6,508,897 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid in capital

9 unchanged sentences

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Cost of Goods Sold

10 unchanged sentences

Interest expense

Interest income

Change in fair value of warrant liability

Change in fair value of derivative liability

Change in fair value of derivative financial instruments

Amortization of debt discount and issuance cost

( 1,331,030 )

( 4,881,622 )

Extinguishment of debt liabilities

( 4,779,069 )

( 3,649,571 )

Other expense

6 unchanged sentences

$ ( 6,793,596 )

$ ( 13,034,385 )

Per-Share Data

Basic and diluted loss per share

Weighted Average Shares Outstanding

Weighted Average Common Shares Outstanding

Basic and diluted

1 unchanged sentence

Statements of Stockholders’ Deficit (Unaudited)

For the Three and Six Months Ended June 30, 2023

Convertible Series A Preferred Stock

Convertible Series Seed Preferred Stock

Additional Paid

For the Three and Nine Months Ended September 30,

Additional Paid In

Stockholder’s

Balance, January 1, 2023

Balance at January 1, 2023

$ ( 33,931,428 )

2 unchanged sentences

( 2,173,408 )

Balance, March 31, 2023

Balance at March 31, 2023

$ ( 36,104,836 )

2 unchanged sentences

( 2,235,614 )

Balances, June 30, 2023

Balance at June 30, 2023

$ ( 38,340,450 )

$ ( 9,982,635 )

For the Three and Six Months Ended June 30, 2024

Convertible Series A Preferred Stock

Convertible Series Seed Preferred Stock

Additional Paid

Common stock issued upon initial public offering, net

Common stock issued upon preferred stock conversion

Common stock issued upon debt conversion

Common stock issued from agreements

Change in fair value of warrant liability upon initial public offering

( 8,625,363 )

Balances at September 30, 2023

$ ( 46,965,813 )

$ ( 1,061,087 )

Statements of Stockholders’ Deficit (Unaudited)

For the Three and Nine Months

Ended September 30, 2024

Preferred Stock

Additional Paid In

Stockholder’s

Balance, January 1, 2024

Balance at January 1, 2024

$ ( 48,558,111 )

$ ( 1,403,241 )

$ ( 48,558,111 )

$ ( 1,403,241 )

Warrants exercised

Additional paid in capital from warrants issued under consulting agreement

Additional paid in capital form warrants issued as debt discount

Additional paid in capital from warrants issued as debt discount

Common stock issued from agreements

1 unchanged sentence

( 2,120,651 )

Balance, March 31, 2024

Balance at March 31, 2024

$ ( 50,678,762 )

$ ( 3,184,454 )

Additional paid in capital from warrants issued under consulting agreement

Common stock issued from agreements

( 2,917,710 )

Balances at June 30, 2024

$ ( 53,596,472 )

$ ( 5,258,382 )

$ ( 53,596,472 )

$ ( 5,258,382 )

Additional paid in capital from warrants issued under consulting agreement

Common stock issued from agreements

Debt discount on mandatory conversion of convertible promissory notes to Series B preferred shares

Conversion of convertible promissory note to Series B Preferred Stock

( 1,755,234 )

Balances, June 30, 2024

Balances at September 30, 2024

$ ( 55,351,706 )

4 unchanged sentences

Statements of Cash Flows (Unaudited)

For the Six Months Ended June 30,

For the Nine Months Ended

September 30,

Cash Flows from Operating Activities

5 unchanged sentences

Provisions for losses on accounts receivable

Provision for losses on inventory

Non-cash lease expense

Non-cash interest expense

Stock-based compensation

Extinguishment of derivative liability

( 1,129,498 )

Issuance of common stock for non-cash consideration

7 unchanged sentences

Accounts payable

( 1,025,467 )

Accrued expenses

9 unchanged sentences

Cash Flows from Financing Activities

Offering costs paid

Proceeds from issuance of common stock, net of issuance costs

Offering costs in advance of sale of common stock

( 2,417,185 )

Proceeds from exercised warrants

4 unchanged sentences

Net cash provided by financing activities

Net Increase (Decrease) in Cash and Cash Equivalents

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Period

Supplemental Disclosure of Non-Cash Operating Activities

Supplemental Disclosure of Operating Activities

Cash paid for interest

2 unchanged sentences

Recognition of right of use asset

Conversion of convertible promissory notes to Series B preferred stock

Fair value of warrant liabilities from convertible notes

Fair value of derivative liabilities of conversion feature from convertible notes

Fair value of warrants from debt discount in convertible notes classified as additional paid in capital

Fair value of warrants from debt discount in convertible notes classified as

additional paid in capital

Write-off of debt discount on convertible notes classified as additional paid in capital

Issuance of note payable to financing company for insurance premiums

accompanying notes are an integral part of these unaudited condensed financial statements

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common stock have been retroactively restated to give effect to the splits.

part of the conversion to a Delaware corporation, the total number of shares of all classes of stock which the Corporation shall have

authority to issue is (1) 100,000,000 shares of Common Stock, par value $ 0.001 per share (“Common Stock”) and (ii) 1,120,000

shares of Preferred Stock, par value $ 0.001 per share (“Preferred Stock”), 1,000,000 of which is hereby designated as “Series

A Preferred Stock” and 120,000 of which is hereby designated as “Series Seed Preferred Stock” with the rights, preferences,

part of the conversion to a Delaware corporation, the total number of shares of all classes of stock which the Corporation had

authority to issue was (1) 100,000,000 shares of Common Stock, par value $ 0.001 per share (“Common Stock”) and (ii) 1,120,000

shares of Preferred Stock, par value $ 0.001 per share (“Preferred Stock”), 1,000,000 of which was designated as “Series

A Preferred Stock” and 120,000 of which was designated as “Series Seed Preferred Stock” with the rights, preferences,

powers, privileges and restrictions, qualifications and limitations set forth in this Article IV of the Delaware Certificate of Incorporation.

All share amounts have been retroactively restated to give effect to these changes.

August 9, 2023, the Company consummated an initial public offering, conducted on a firm commitment basis, pursuant to which it sold 1,098,667

shares of its common stock at a price of $ 6.00 per share, resulting in gross proceeds to the Company of $ 6,592,002 .

Net proceeds to the

Company, after deducting underwriting discounts and commissions, 2022 deferred offering costs totaling $ 736,736 and offering expenses

paid by the Company, were $ 4,110,721 .

All shares sold in our IPO were registered pursuant to a registration statement on Form S-1 (File

333- 269179), as amended, declared effective by the SEC on August 9, 2023.

August 9, 2023, the Company consummated an initial public offering (“IPO”), conducted on a firm commitment basis, pursuant to which it sold 1,098,667

shares of its common stock at a price of $ 6.00

per share, resulting in gross proceeds to the Company of $ 6,592,002 .

Net proceeds to the Company, after deducting underwriting discounts and commissions, 2022 deferred offering costs totaling $ 736,736

and offering expenses paid by the Company, were $ 4,110,721 .

All shares sold in our IPO were registered pursuant to a registration statement on Form S-1 (File No.

333- 269179), as amended,

declared effective by the SEC on August 9, 2023.

Alexander Capital L.P.

(“Alexander”) acted

as sole book-running manager for the offering and Spartan Capital Securities, LLC acted as co-manager for the offering.

The underwriters

did not exercise their option to purchase up to an additional 164,801 shares of common stock.

The Company paid the underwriters an underwriting

discount of seven percent ( 7 %) of the amount raised in the offering.

In addition, we also paid the underwriters a non-accountable expense

allowance in the amount of 1 % (such 8 % in commissions and fees amounted to a total of $ 527,000 ) at closing, as well as $ 175,000 for the

reimbursement of certain of the underwriters’ expenses.

Additionally, as partial consideration for services rendered in connection

with the offering, the Company issued Alexander unregistered warrants to purchase an aggregate of 65,921 shares of Company common stock,

representing 6.0 % of the aggregate shares sold in the offering.

The warrants have an initial exercise price of $ 7.20 per share (equal

to 120 % of the offering price per share), have a term of five years from the commencement of sales in the offering, and are exercisable

(“Alexander”) acted as sole book-running manager

for the offering and Spartan Capital Securities, LLC acted as co-manager for the offering.

The underwriters did not exercise their

option to purchase up to an additional 164,801

shares of common stock.

The Company paid the underwriters an underwriting discount of seven percent ( 7 %)

of the amount raised in the offering.

In addition, we also paid the underwriters a non-accountable expense allowance in the amount

in commissions and fees amounted to a total of $ 527,000 )

at closing, as well as $ 175,000

for the reimbursement of certain of the underwriters’ expenses.

Additionally, as partial consideration for services rendered

in connection with the offering, the Company issued Alexander unregistered warrants to purchase an aggregate of 65,921

shares of Company common stock, representing 6.0 %

of the aggregate shares sold in the offering.

The warrants have an initial exercise price of $ 7.20

per share (equal to 120 %

of the offering price per share), have a term of five years from the commencement of sales in the offering, and are exercisable at

August 15, 2024, the Company’s shareholders (i) authorized 5,000,000

shares of preferred stock of which 4,000,000

shares were designated as $ 0.001

par value “Series B Preferred Stock” with 2,073,524

shares issued and outstanding as of September 30, 2024, (ii)

retired 1,000,000 shares of Series A Preferred Stock and (iii) retired 120,000 shares of Series Seed Preferred Stock.

Company is headquartered in Carmel, Indiana.

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value require significant management judgment or estimation.

Company’s Level 1 assets/liabilities include cash, accounts receivable, accounts payable, prepaids, and other current assets.

believes the estimated fair value of these accounts on June 30, 2024 approximate their carrying value as reflected in the balance sheets

due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

Company’s Level 3 assets/liabilities include derivative and warrant liabilities.

Company’s Level 1 accounts include cash, accounts receivable, accounts payable, prepaids, and other current assets.

believes the estimated fair value of these accounts on September 30, 2024 approximate their carrying value as reflected in the balance

sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

Company’s Level 3 accounts include warrant liabilities.

Inputs to determine fair value are generally unobservable

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used in the models are significant to the fair values of the assets and liabilities.

were no transfers between any of the levels during the periods ended June 30, 2024 and December 31, 2023.

In addition to assets and liabilities

that are recorded at fair value on a recurring basis, the Company’s assets and liabilities are also subject to nonrecurring fair

value measurements.

As of June 30, 2024 and December 31, 2023, the Company had no assets that were measured on a nonrecurring basis.

were no transfers between any of the levels during the periods ended September 30, 2024 and December 31, 2023.

In addition to assets

and liabilities that are recorded at fair value on a recurring basis, the Company’s assets and liabilities are also subject to

nonrecurring fair value measurements.

As of September 30, 2024 and December 31, 2023, the Company had no assets that were measured on

a nonrecurring basis.

and Diluted Net Income (Loss) per Share

or loss per share (“EPS”) is computed by dividing net income (loss), net of preferred stock dividends, by the weighted average

or loss per share (“EPS”) is computed by dividing net income (loss), by the weighted average

number of shares of common stock outstanding during the period.

1 unchanged sentence

average of all potentially dilutive shares of common stock that were outstanding during the periods presented.

As of June 30, 2024 and

December 31, 2023, there were no preferred stock dividends declared or paid.

net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common

3 unchanged sentences

In periods when losses are reported, which

is the case for June 30, 2024 and 2023 presented in these financial statements, the weighted-average number of common shares outstanding

is the case for September 30, 2024 and 2023 presented in these financial statements, the weighted-average number of common shares outstanding

excludes common stock equivalents because their inclusion would be anti-dilutive.

Company had the following potentially dilutive common stock equivalents at June 30, 2024 and 2023:

Schedule of Dilutive Common Stock Equivalents

Convertible Series A Preferred Stock

Convertible Series Seed Preferred Stock

Company had the following potentially dilutive common stock equivalents at September 30, 2024 and 2023:

of Dilutive Common Stock Equivalents

Pre-Funded Warrants for Common Stock

Convertible Bridge Debt

following table presents the calculation of the basic and diluted net loss per share and the effect of preferred stock dividends:

Schedule of Basic and Diluted Net Loss Per Share

Three Months Ended June 30,

Six Months Ended June 30,

Series B Preferred Stock

following table presents the calculation of the basic and diluted net loss per share:

of Basic and Diluted Net Loss Per Share

Three Months Ended September 30,

Nine Months Ended September 30,

$ ( 1,755,234 )

3 unchanged sentences

Preferred stock dividends

Net income (loss) available to common stockholders

(loss) available to stockholders

( 1,800,054 )

13 unchanged sentences

to be entitled in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within

the scope of ASC 606, it performs the following five steps:

To determine revenue recognition for arrangements that the Company determines

are within the scope of ASC 606, it performs the following five steps:

the contract(s) with a customer;

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of Satisfaction

Company typically satisfies its performance obligations as the goods are shipped.

that are shipped to customers are typically shipped FOB shipping point with freight prepaid by the Company.

Company typically satisfies its performance obligations as the goods are received at the customer’s destination.

that are shipped to customers are typically shipped FOB destination with freight prepaid by the Company.

As such, ownership of goods

in transit transfer to the customer when shipped and the customer bears the associated risks (e.g., loss, damage, delay).

and handling costs are recorded as general and administrative expenses in the Statement of Operations.

in transit transfer to the customer when received and the Company bears the associated risks (e.g., loss, damage, delay).

and handling costs are recorded as cost of goods sold in the Statement of Operations.

Payment Terms

for goods sold by the Company is typically due after an invoice is sent to the customer, within 30 days.

However, other payment terms

are frequently negotiated with customers ranging from due upon receipt to due within 90 days.

Some payment terms may call for payment

only after the healthcare provider receives their insurance reimbursement.

Invoices for goods are typically sent to customers within

three calendar days of shipment.

The Company does not offer discounts if the customer pays some or all of an invoiced amount prior to

the due date.

Invoices for goods are typically

sent to customers within three calendar days of shipment.

The Company does not offer discounts if the customer pays some or all of an

invoiced amount prior to the due date.

of the Company’s contracts have a significant financing component.

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accounts to reflect its actual return experience.

Historically, returns have been immaterial, and the Company currently does not provide

a provision for this liability.

have incurred losses since inception and have funded our operations primarily with a combination of sales, debt, and the sale of capital

As of June 30, 2024, we had a stockholders’ deficit of $ 5,258,382

As of September 30, 2024, we had a stockholders’ deficit of $ 1,793,932

and short-term outstanding borrowings of $ 147,688 .

As June 30, 2024, we had cash of $ 1,765,274

and a working capital deficit of $ 5,482,316 .

August 9, 2023, the Company consummated its initial public offering, conducted on a firm commitment basis, pursuant to which it sold

1,098,667 shares of its common stock at a price of $ 6.00 per share, resulting in gross proceeds to the Company of $ 6,592,002 .

to the Company, after deducting underwriting discounts and commissions, 2022 deferred offering costs totaling $ 736,736 and offering expenses

paid by the Company, were $ 4,110,721 .

All shares sold in our IPO were registered pursuant to a registration statement on Form S-1 (File

333- 269179), as amended, declared effective by the SEC on August 9, 2023.

Alexander Capital L.P.

acted as sole book-running manager

for the offering and Spartan Capital Securities, LLC acted as co-manager for the offering.

The underwriters did not exercise their option

to purchase up to an additional 164,801 shares of common stock.

As of September 30, 2024, we had cash of $ 260,885 and

a working capital deficit of $ 2,032,284 .

future capital requirements will depend upon many factors, including progress with developing, manufacturing, and marketing our technologies,

9 unchanged sentences

efforts, will require significant uses of working capital through the rest of 2024 and beyond.

Based on our current operating plans,

we believe that our existing cash at the time of this filing will only be sufficient to meet our anticipated operating needs through

the end of 2024.

evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going

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Since repayment is not assured, the Company provided an allowance for the entire balance of principal and interest as of December 31,

The current allowance is $ 1,012,800 as of June 30, 2024.

The current allowance is $ 1,012,800 as of September 30, 2024.

The current loan balances are as follows:

Schedule of Related Party Transactions

June 30, 2024

September 30, 2024

Shareholder 1

9 unchanged sentences

his appointment to the Board of Directors.

For the six months ended June 30, 2024 and 2023, the Company paid Mr.

For the nine months ended September 30, 2024 and 2023, the Company paid Mr.

Watkins $ 0 and

1 unchanged sentence

No amounts were owed to Mr.

Watkins as June 30, 2024 and December 31, 2023, respectively, for these

Watkins as of September 30, 2024 and December 31, 2023, respectively,

for these services.

Company’s former Chief Financial Officer is contracted for services through a third-party public accounting firm.

He is the firm’s

managing partner and majority shareholder.

The firm is engaged by the Company to provide accounting and tax services on a continuous

firm’s managing partner and majority shareholder.

The firm is engaged by the Company to provide accounting and tax services on

a continuous basis.

Fees paid for services were $ 148,106

for the six months ended June 30, 2024 and 2023,

respectively.

The Company owed RBSK for open invoices of $ 47,897

that are included in accounts payable as of June

30, 2024 and December 31, 2023, respectively.

and $ 304,158

for the nine months ended September 30, 2024 and 2023, respectively.

The Company owed the firm for open invoices of $ 50,808

that are included in accounts payable as of September 30, 2024 and December 31, 2023, respectively.

Notes Payable

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After making scheduled payments, the Company borrowed $ 107,231 on May 24, 2023, to bring the principal balance back to $ 250,000 .

terms of the note are the same as the previous note with the final payment scheduled for August 22, 2024.

The principal outstanding as

of June 30, 2024 and December 31, 2023 was $ 38,797 and $ 148,062 , respectively.

The Company believes that the advancement of additional

funds is a minor modification to the terms of the existing loan since the difference in present value of the cash flows under the terms

of the new loan is less than 10% of the present value of the remaining cash flows under the terms of the original loan.

the modification was accounted for as a modification of debt.

terms of the note are the same as the previous note with the final payment made on August 22, 2024.

The principal outstanding as of September

30, 2024 and December 31, 2023 was zero and $ 148,062 , respectively.

The Company believes that the advancement of additional funds is

a minor modification to the terms of the existing loan since the difference in present value of the cash flows under the terms of the

new loan is less than 10% of the present value of the remaining cash flows under the terms of the original loan.

As a result, the modification

was accounted for as a modification of debt.

lender was granted and assigned a continuing security interest in all the Company’s personal property assets including, but not

1 unchanged sentence

accounts, commercial tort claims, contract rights, licenses, claims, and general intangibles.

expense totaled $ 7,840 and $ 21,735 for the three and six months ended June 30, 2024.

The future minimum principal payments to be

paid in 2024 is $ 38,797 .

November 8, 2023, the Company entered into a Securities Purchase Agreement (“SPA”) with a shareholder for the issuance 1,260,504

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of the Series B Preferred Stock plus accrued but unpaid dividends into an equivalent amount of common stock at the $ 2.38 conversion price.

As of June 30, 2024, no investor has converted any portion of the Original 2024 Convertible Notes into Series B Preferred Stock as the

shareholders have not yet authorized its issuance.

As of September 30, 2024, no investor has converted any portion of the Original 2024 Convertible Notes into Series B Preferred Stock

as the shareholders have not yet authorized its issuance.

May 21, 2024, the Company entered into three convertible promissory notes with related institutional accredited investors with terms

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(iii) the right to receive dividends will expire automatically on June 30, 2025, (iv) the liquidation rights will automatically expire

on June 30, 2025, and (v) the number of shares of the common stock that a holder of Series B preferred stock is entitled to receive

shall not exceed the maximum percentage chosen by the holder, which is initially set at between 4.99 % and 19.99 % until shareholder approval

on June 30, 2025, and (v) the number of shares of the common stock that a holder of Series B preferred stock is entitled to receive shall

not exceed the maximum percentage chosen by the holder, which is initially set at between 4.99 % and 19.99 % until shareholder approval

is obtained, of the number of outstanding shares of the common stock at the time of the conversion of the Series B preferred stock shares.

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exist to convert the outstanding amount into shares of the common stock, at a price per share of $ 2.38 .

of June 30, 2024, the Company received $ 4,935,000 of the principal amount of the Amended 2024 Convertible Notes with the remainder due

in monthly installments through March of 2025.

of August 15, 2024, the Company received $ 4,935,000 of the principal amount of the Amended 2024 Convertible Notes with the remainder

due in monthly installments through March of 2025.

On August 15, 2024, the Company’s shareholders authorized 5,000,000 shares of

preferred stock of which 4,000,000 shares were designated as $ 0.001 par value Series B preferred stock.

Pursuant to the Amended 2024

Convertible Promissory Notes, the outstanding principal balance of $ 4,935,000 was mandatorily converted into 2,073,524 Series B Preferred

Shares at a conversion price of $ 2.38 .

August 9, 2024, the Company entered into a promissory note to finance the premiums on its annual directors and officers insurance

policy, bearing interest at a rate of 7.40 %

per annum and maturing on June 9, 2025.

The outstanding balance of $ 166,149 consisted of a $ 147,688 note payable and $ 18,461 in

accounts payable on the condensed balance sheets as of September 30, 2024.

Company’s private placement agent fees included (i) 10% of the Original 2024 Convertible Promissory Notes funded principal amount

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on March 18, 2024 pursuant to an new advisory agreement (See Note 12).

interest totaled $ 66,648 as

of June 30, 2024 and December 31, 2023, respectively.

On June 28, 2024, the Company paid $ 79,588 in

accrued interest for the first and second quarters of 2024 on the Amended 2024 Convertible Promissory Notes in the form of 33,454 shares

of the Company’s common stock .

The unamortized debt discount on the Amended 2024 Convertible Promissory Notes total $ 206,464 as

of June 30, 2024.

Interest expense totaled $ 72,857 and $ 85,522 for the three and six months ended June 30, 2024, respectively.

Amortization of the debt discount on the Amended 2024 Convertible Notes totaled $ 63,817 and $ 85,500 for

the three and six months ended June 30, 2024, respectively.

interest totaled $ 66,648 and

of September 30, 2024 and December 31, 2023, respectively.

Interest expense totaled $ 64,676 and $ 102,628 for the three months ended

September 30, 2024 and 2023, respectively, and $ 171,934 and $ 453,869 for the nine months ended September 30, 2024 and 2023,

respectively.

Amortization of the debt discount on the Amended 2024 Convertible Notes totaled $ 40,888 and

$ 126,387 for

the three and nine months ended September 30, 2024, respectively.

Upon mandatory conversion of the Amended 2024 Convertible

Promissory Notes to Series B Preferred Stock, the Company wrote off the amortized debt discount of $ 165,577 to

additional paid in capital included in stockholder’s deficit on the condensed balance sheet.

the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and

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unless there is reasonable certainty that the Company will renew.

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.

made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification.

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The Company did not have any finance

leases as of June 30, 2024 and December 31, 2023.

Company had three leases primarily consisting of office space in Versailles and Carmel, Indiana.

of the leases in Versailles started January 1, 2022.

Both have an term of one year, with automatic one year renewal, unless 60 day notice

of vacating is given, commencing on the execution hereof and continuing through December 31 st of each year.

The monthly lease

payments for these leases are $ 470 and $ 1,664 with a 4 % per annum increase.

leases as of September 30, 2024 and December 31, 2023.

Company has two leases primarily consisting of office space in Versailles and Carmel, Indiana.

lease in Versailles started January 1, 2022 and has a term of one year, with automatic one year renewal, unless 60 day notice of vacating

is given, commencing on the execution hereof and continuing through December 31 st of each year.

The current monthly lease

payment for this lease is $ 1,800 with a 4 % per annum increase.

The new lease in Carmel started January 1, 2024.

term is five years and five months.

The initial term is five

years and five months.

The monthly lease payment started at $ 6,721 with an annual increase of 2.5 %.

As long as the Company

is not in default, it is only obligated to pay an amount equal to 50% of the monthly base rent for months 1-10.

lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the

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.

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 six months ended June 30, 2024 and 2023, the Company recognized $ 46,423

of operating lease expense, including short-term

As long as the Company is not in

default, it is only obligated to pay an amount equal to 50% of the monthly base rent for months 1-10.

the nine months ended September 30, 2024 and 2023, the Company recognized $ 74,314 and $ 35,678 of operating lease expense, including short-term

lease expense and variable lease costs.

1 unchanged sentence

Schedule of Operating Leases

September 30,

Operating lease right-of-use assets

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Weighted-average discount rate

of June 30, 2024, the maturities of the Company’s operating lease liabilities were as follows:

of September 30, 2024, the maturities of the Company’s operating lease liabilities were as follows:

Schedule of Maturities Operating Lease Liabilities

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Common Stock and Warrants

Company authorized 100,000,000 shares of common stock, of which 6,841,621 and 6,508,897 shares were issued and outstanding as of June

Company authorized 100,000,000 shares of common stock, of which 6,980,227 and 6,508,897 shares were issued and outstanding as of September

30, 2024 and December 31, 2023, respectively.

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notes, (iii) 425,000 common shares as payment to vendors for services and (iv) 127,780 common shares upon the exercise of warrants.

January 10, 2023, the Company’s board of directors authorized a 2-for-1 reverse stock split .

All share information in these financial

statements has been adjusted for this reverse stock split.

January 10, 2023, the Company’s board of directors authorized a 2-for-1 reverse stock split .

All share information in these financial

statements has been adjusted for this reverse stock split.

August 9, 2023, the Company consummated an initial public offering, conducted on a firm commitment basis, pursuant to which it sold 1,098,667

shares of its common stock at a price of $ 6.00 per share, resulting in gross proceeds of $ 6,592,002 .

January 10, 2023, the Company’s board of directors authorized a 2-for-1

reverse stock split .

All share information in

these financial statements has been adjusted for this reverse stock split.

Stock Issuances

January 2, 2024, the Company issued 75,000 shares of common stock with a fair value of $ 200,250 pursuant to a consulting agreement related

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As the term of the consulting agreement covers the full fiscal year ending December

31, 2024, the Company expensed $ 50,062 and $ 100,125 in the three month and six months ended June 30, 2024, respectively, with the remaining

$ 100,125 recorded in prepaids and other current assets in the condensed balance sheets as of June 30, 2024.

31, 2024, the Company expensed $ 50,062 and $ 100,125 in the three month and nine months ended September 30, 2024, respectively, with the

remaining $ 50,063 recorded in prepaids and other current assets in the condensed balance sheets as of September 30, 2024.

January 19, 2024, the Company received proceeds of $ 26,180 from an existing shareholder and issued 11,000 shares of common stock upon

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Company recorded the fair value of the settlement totaling $ 230,823 as financing charge in the condensed statements of operations.

June 28, 2024 the Company issued 90,032

shares of common stock to pre-IPO Series A Preferred

Shareholders to settle certain claims.

The Company recorded the fair value of the settlement totaling $ 286,458

as other expense in the condensed statements

of operations.

June 28, 2024 the Company issued 90,032 shares of common stock to pre-IPO Series A Preferred Shareholders to settle certain claims.

Company recorded the fair value of the settlement totaling $ 286,458 as other expense in the condensed statements of operations.

June 28, 2024, the Company issued 33,454 shares of common stock to holders of the Amended 2024 Convertible Promissory Notes in lieu of

$ 79,588 in cash payments for interest through June 30, 2024.

June 28, 2024, the Company issued 24,343 shares

of common stock to its Board of Directors for their service from the Company’s IPO on August 9, 2023 through March 31, 2024.

The fair value of the services were recorded as general and administrative expense in the condensed statements of operations

totaling $ 39,452 from August 9, 2023 through December 31, 2023 and $ 28,219 during the six months ended June 30, 2024.

June 28, 2024, the Company issued 24,343 shares of common stock to its Board of Directors for their service from the Company’s

IPO on August 9, 2023 through March 31, 2024.

The fair value of the services was recorded as general and administrative expense in the

condensed statements of operations totaling $ 39,452 from August 9, 2023 through December 31, 2023 and $ 28,219 during the nine months

ended September 30, 2024.

June 28, 2024, the Company issued 25,832 shares of common stock to its previous Chief Operating Officer in accordance with a severance

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June 28, 2024, the Company issued 20,000 shares of common stock to it previous CFO for services provided during the IPO.

recorded the fair value of the services totaling $ 55,600 as general and administrative expense in the condense statements of operations.

recorded the fair value of the services totaling $ 55,600 as general and administrative expense in the condensed statements of operations.

August 22, 2024, the Company issued 25,601 shares of common stock to holders of the Amended 2024 Convertible Promissory Notes in lieu

of $ 60,911 in cash payments for interest through August 22, 2024.

August 28, 2024 the Company issued 102,860 shares of common stock to pre-IPO Series A Preferred Shareholders to settle certain claims.

The Company recorded the fair value of the settlement totaling $ 293,791 as other expense in the condensed statements of operations.

September 17, 2024, the Company issued 10,145 shares of common stock to a vendor pursuant to a marketing agreement.

The Company recorded

the fair value of services totaling $ 30,131 as general and administrative expense in the condensed statements of operations.

connection with a bridge loan, the Company issued a warrant on September 18, 2018 that allows the holder to purchase common stock from

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The Company recorded the fair value of the services totaling

$ 74,278 as financing fees in the condensed balance sheets as of June 30, 2024.

March to June of 2024, the Company issued 30,252 warrants pursuant to a capital markets advisory agreement at an exercise price of $ 2.38

to purchase common stock (See Note 12).

The Company recorded the fair value of the advisory services totaling $ 59,370 as general and

administrative expense in the condensed statements of operations.

following is a summary of warrant activity for common stock during the periods ended June 30, 2024 and December 31, 2023:

$ 74,278 as financing fees in the condensed balance sheets as of September 30, 2024.

March to September of 2024, the Company issued 52,941 warrants pursuant to a capital markets advisory agreement at an exercise price

of $ 2.38 to purchase common stock (See Note 12).

The Company recorded the fair value of the advisory services totaling $ 125,824 as general

and administrative expense in the condensed statements of operations.

following is a summary of warrant activity for common stock during the periods ended September 30, 2024 and December 31, 2023:

Schedule of Warrant Activity for Common Stock

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Outstanding as of December 31, 2023

Outstanding as of June 30, 2024

Outstanding as of September 30, 2024

following is a summary of warrant activity for preferred stock during the year ended December 31, 2023:

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Outstanding as of December 31, 2023

was no preferred stock warrant activity for the three and six months ended June 30, 2024.

following table summarizes the Company’s warrants outstanding and exercisable as of June 30, 2024:

was no preferred stock warrant activity for the three and nine months ended September 30, 2024.

following table summarizes the Company’s warrants outstanding and exercisable as of September 30, 2024:

Schedule of Warrants outstanding and Exercisable

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August 8, 2028

Company is a party to two investment banking and advisory agreements with a consulting firm engaged in connection with listing our common

stock for trading on NYSE.

Pursuant to the first advisory agreement, dated March 3, 2022, the Company agreed to pay the consulting firm

a monthly consulting fee of $ 5,000 and a final payment of $ 50,000 upon a successful NYSE listing, and, also upon such listing, to issue

the consulting firm shares of our common stock representing 1.5 % of our outstanding shares after giving effect to the initial public

offering and to issue the consulting firm five-year warrants to purchase shares of our common stock representing 2.0 % of our outstanding

shares, after giving effect to the initial public offering, on a fully-diluted basis with an exercise price per share representing the

public offering price per share.

Pursuant to the second advisory agreement with consulting firm, dated June 20, 2022, and amended December

20, 2022, the Company agreed to pay fees in the aggregate of up to $ 136,166 for advice in connection with communication and other related

matters leading up to, and in connection with, the initial public offering and to issue the consulting firm 125,000 shares of common

stock upon a successful NYSE listing.

The Company agreed to piggyback registration rights with respect to all shares issued to the consulting

firm under both advisory agreements, including shares issuable upon exercise of the warrants.

The Company evaluated the agreements and

determined that the shares will not be recorded and valued until the performance condition is satisfied.

Preferred Stock

Company has authorized 1,120,000 shares of preferred stock of which 1,000,000 has been designated Series A Preferred Stock and 120,000

has been designated Series Seed Preferred Stock, of which 0 shares of Series A Preferred Stock and 0 shares of Series Seed Preferred

Stock are issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.

following is a summary of Preferred Stock terms:

Rights - The Series A Preferred and Series Seed Preferred shall vote together with the Common Stock on an as-converted basis, and

not as separate classes.

- The Series A Preferred and Series Seed initially convert 1:1 to Common Stock at any time at option of holder, subject to adjustments

for stock dividends, splits, combinations, and similar events and as described below under “Anti-dilution Provisions.”

- The Series A Preferred will carry an annual 8 % cumulative dividend, payable upon any liquidation, dissolution or winding up of

the Company (the “Accruing Dividend”).

For any other dividends or distributions, participation with Common Stock on an as-converted

- In the event of any liquidation, dissolution or winding up of the Company, the proceeds shall be paid in the following priority:

to the Series A Preferred in proportion to each holder’s respective pro rata Series A Original Purchase Price, plus any pro rata

share of the Accruing Dividend until the entire Series A Original Purchase Price and Accruing Dividend are paid;

to the Series Seed Preferred in proportion to each holder’s respective pro rata Series Seed Original Purchase Price until the entire

amount of the Series Seed Original Purchase Price is paid;

the Series A Preferred and Series Seed Preferred participate with the Common Stock pro rata on an as-converted basis.

merger or consolidation (other than one in which stockholders of the Company own a majority by voting power of the outstanding shares

of the surviving or acquiring corporation) and a sale, lease, transfer, exclusive license or other disposition of all or substantially

all of the assets of the Company will be treated as a liquidation event (a “Deemed Liquidation Event”), thereby triggering

payment of the liquidation preferences described.

Anti-dilution

Provisions - The Series A Preferred have full-ratchet anti-dilution protection so that the conversion price will be reduced to 80 %

of the price at which any future shares are issued, if less than the Series A Original Purchase Price.

stock has all converted pursuant to the initial public offering.

August 15, 2024, the Company’s shareholders authorized 5,000,000

shares of preferred stock of which 4,000,000

shares were designated as $ 0.001

par value Series B Preferred Stock with 2,073,524

shares issued and outstanding as of September

Series B Preferred Stock shareholders vote with Common Stock shareholders on an as-converted basis and not as a separate class.

Cumulative dividends accrue at 8.5 %

per annum and are due and payable in either cash for common shares as the Company’s discretion on a quarterly basis through June

Series B Preferred Stock converts to common stock on a 1:1 basis, subject to adjustments for stock dividends, splits, combinations

and similar events as well as unpaid dividends thereon, solely at the election of the holder at any time.

to August 15, 2024 the Company had 1,000,000

shares authorized as Series A and Series Seed Preferred Stock, respectively, of which zero

shares are issued and outstanding for both classes of preferred stock as of December 31, 2023, respectively.

The Series A and Series

Seed Preferred Stock (i) voted together with common stock on an as-converted basis, and not as separate classes and (ii) converted

1:1 to common stock at any time at option of holder, subject to adjustments for stock dividends, splits, combinations, and similar

The Series A Preferred Stock carried an annual 8 %

cumulative dividend, payable upon any liquidation, dissolution or winding up of the Company.

For any other dividends or

distributions, the Series A Preferred Stock participated with common stock on an as-converted basis.

The Company’s 1,000,000

shares of Series A Preferred Stock and 120,000

shares of Series Seed Preferred Stock were retired on August 15, 2024.

Upon any liquidation, dissolution or winding up

of the Company, whether voluntary or involuntary, the Series B Preferred Stock shareholders maintain priority preference over all other

classes of capital stock.

A merger or consolidation (other

than one in which stockholders of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring

corporation) and a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company

will be treated as a liquidation event, thereby triggering payment of the liquidation preferences.

of September 30, 2024 and December 31, 2023, there were no preferred stock dividends declared or paid.

Series B Preferred Stock

un declared cumulative dividends totaled $ 44,820 and $ 0 as of September 30, 2024 and December 31, 2023, respectively.

Stock Options and Awards

following is a summary of stock option activity for the periods ended June 30, 2024 and December 31, 2023:

following is a summary of stock option activity for the periods ended September 30, 2024 and December 31, 2023:

Schedule of Stock Option Activity

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Cancelled/Expired

Outstanding as of June 30, 2024

Vested and Exercisable as of June 30, 2024

Outstanding as of September 30, 2024

Vested and Exercisable as of September 30, 2024

compensation expense is classified in the Company’s statements of operations as general and administrative expense.

expense totaled $ 227,000 and $ 0 for the six months ended June 30, 2024 and 2023, respectively (See Note 9).

As of June 30, 2024,

expense totaled $ 227,000 and $ 0 for the nine months ended September 30, 2024 and 2023, respectively (See Note 9).

As of September 30,

2024, there was no unrecognized compensation expense related to unvested options granted under the Company’s share-based compensation

Share Liability

of June 30, 2024, the Company had not issued (i) 100,000

of September 30, 2024, the Company had not issued 100,000

shares of its common stock pursuant to a hiring

grant of an executive officer, representing stock compensation expense of $ 227,000

in the six months ended June 30, 2024 and (ii)

shares of its common stock pursuant to an agreement

for marketing services representing $ 30,131

in advertising expense for the three and six months ended June

30, 2024, due to administrative delays.

These shares are classified as share liabilities as they have been authorized but not yet issued

as of the reporting date.

Company expects to issue these shares to the respective shareholder as soon as the administrative delays are resolved.

These shares will

be recorded as issued and outstanding upon their issuance, and the corresponding share liability will be reclassified to shareholders’

The administrative delays are not expected to have any material impact on the financial position or results of operations of

best estimate is that the administrative delays will be resolved within the next fiscal quarter, at which point the share liabilities

will be eliminated, and the shares will be issued.

However, the timing of resolution is subject to various factors, and actual timing

in the nine months ended September 30, 2024 due

to administrative delays.

These shares are classified as share liabilities as they have been authorized but not yet issued as of the

reporting date.

On October 1, 2024, the Company amended the hiring grant and replaced the 100,000 unissued common shares with 100,000

restricted stock units that vest over three years .

Warrant Liabilities

evaluates all of the Company’s financial instruments and contracts, including issued warrants to purchase its Class A common stock

and Series B Preferred Stock, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,

pursuant to ASC 480 and ASC 815-15.

The classification of derivative instruments, including whether such instruments should be recorded

as liabilities or as equity, is reassessed at the end of each reporting period.

Company utilizes a Monte Carlo simulation model for warrants that have an option to convert at a variable number of shares to compute

the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date.

The inputs utilized

in the application of the Monte Carlo model included a starting stock price, an expected remaining term of each warrant as of the valuation

date, estimated volatility, drift, and a risk-free rate.

The Company records the change in the fair value of the derivative as other

income or expense in the statements of operations.

Company utilizes a Monte Carlo simulation model for warrants that have an option to convert at a variable number of shares to compute

the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date.

The inputs utilized

in the application of the Monte Carlo model included a starting stock price of $ 9.20 per share, an expected remaining term of each warrant

as of the valuation date, estimated volatility ranging from 68 % to 80 %, drift, and a risk-free rate ranging from 4.00 % to 4.22 %.

evaluates all of the Company’s financial instruments and contracts, including issued warrants to purchase its Class A common

stock and Series B Preferred Stock, to determine if such instruments are liabilities or contain features that qualify as embedded

derivatives, pursuant to ASC 480 and ASC 815-15.

The classification of these financial instruments, including whether such

instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

Company utilizes a Black-Scholes option-pricing model for warrants that have an option to convert at a variable number of shares to compute

the fair value and to mark to market the fair value of the warrant at each balance sheet date.

The inputs utilized in the application

of the Black-Scholes option-pricing model included an expected remaining term of each warrant as of the valuation date, estimated volatility

of 65.3 %, and a risk-free rate of 3.6 %.

interest rate:

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The Company’s remaining term is based on the remaining contractual maturity of the warrants.

following are the changes in the warrant liabilities during the periods ended June 30, 2024 and December 31, 2023.

following are the changes in the warrant liabilities during the periods ended September 30, 2024 and December 31, 2023.

Schedule of Changes in Warrant Liabilities

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Warrant liabilities as of June 30, 2024

Changes in fair value of warrant liabilities

Warrant liabilities as of September 30, 2024

Derivative Liabilities

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Derivative liabilities as of December 31, 2023

was no derivative liability activity for the three and six months ended June 30, 2024.

was no derivative liability activity for the three and nine months ended September 30, 2024.

Commitments and Contingencies

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termination notice to the other party within 180 days prior to the end of the then-current term.

Company entered into an agreement for a trademark related to the Company’s name on July 11, 2022.

The agreement called for an initial

payment of $ 10,000 upon execution of the agreement.

A second and final payment of $ 40,000 was contingent upon the completion of the Company’s

planned initial public offering.

The second payment has been accrued and is recorded in accounts payable and intangible assets on the

balance sheet.

The trademark does not have a determinate life and therefore the cost is not being amortized.

March 18, 2024, the Company terminated its private placement services agreement and entered into an advisory agreement for debt, equity

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to be issued monthly at an exercise price of $ 2.38 with a term of five years.

On June 28, 2024, the Company issued 90,032

shares of common stock to various pre-IPO Series A Preferred Stock shareholders to settle certain claims.

The Company recorded the

fair value of the settlements totaling $ 286,458 as other expense in the Condensed Statements of Operations (See Note 6).

the Company authorized the issuance of 104,378

shares of its common stock to settle remaining claims with pre-IPO Series A Preferred Stock shareholders classified as $ 290,171

of other expense for the three and six months ended June 30, 2024 in the Condensed Statements of Operations and accrued expenses in

the Condensed Balance Sheets as of June 30, 2024.

These common shares have not yet been issued as of the reporting date as the Company

awaits execution of the settlement agreements by the counterparties.

Company issued 102,860 and 192,892 shares of common stock for the three and nine months ended September 30, 2024, respectively, to various

pre-IPO Series A Preferred Stock shareholders to settle certain claims.

The Company recorded the fair value of the settlements totaling

$ 293,791 and $ 580,249 for the three and nine months ended September 30, 2024, respectively, as other expense in the Condensed Statements

of Operations (See Note 6).

the Company authorized the issuance of 1,518 shares of its common stock to settle remaining claims with pre-IPO Series A Preferred Stock

shareholders classified as $ 0 and $ 4,220 of other expense for the three and nine months ended September 30, 2024, respectively, in the

Condensed Statements of Operations and accrued expenses in the Condensed Balance Sheets as of September 30, 2024.

These common shares

have not yet been issued as of the reporting date as the Company awaits execution of the settlement agreements by the counterparties.

Employment Agreements

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Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have been

October 1, 2024, the Company granted 481,312

restricted stock units to certain employees with a three-year

vesting period pursuant to the Neuraxis, Inc.

2022 Omnibus Securities and Incentive Plan, including an amendment to a hiring grant that replaced 100,000 unissued common shares with 100,000 restricted stock units included herein

(see Note 9).

October 15, 2024, the Company received $ 145,000

in exchange for 60,924

shares of Series B Preferred Stock.

November 9, 2024, the Company entered into a $ 5,000,000 investment agreement with a reputable life sciences fund at terms identical to

the Series B Preferred Stock Shareholders, including the extension of the expiration date of the cumulative dividends from June 30, 2025

to December 31, 2026, that replaced a $ 3,200,000 reduction in committed funding from an existing investor.

The transaction is expected

to close mid-November.

Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have been

no events that have occurred that would require adjustments to our disclosures in the condensed financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements