What changed in this filing

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Item 1. Financial Statements

2025-11-10 compared with 2025-08-12 · 443 added, 358 removed, 632 unchanged (56% of the section changed)

1 unchanged sentence

Balance Sheets

and cash equivalents

receivable, net of credit losses of $ 7,200 and $ 5,000 as of September 30, 2025 and December 31, 2024, respectively

net of reserves of $ 28,793 and $ 4,454 as of September 30, 2025 and December 31, 2024, respectively

and other current assets

current assets

Cash and cash equivalents

Accounts receivable, net of credit losses of $ 5,000 and $ 5,000 as of June 30, 2025 and December 31, 2024, respectively

Inventories, net of reserves of $ 17,195 and $ 4,454 as of June 30, 2025 and December 31, 2024, respectively

Prepaids and other current assets

Total current assets

Property and Equipment, at Cost:

Less - accumulated depreciation

Property and equipment, net

Other Assets:

Operating lease right of use asset, net

Intangible assets, net

Security deposit

and equipment, at cost:

- accumulated depreciation

and equipment, net

lease right of use asset, net

non-current assets

portion of operating lease payable

current liabilities

Accounts payable

Accrued expenses

Current portion of operating lease payable

Notes payable

Customer deposits

Warrant liabilities

Total current liabilities

lease payable, net of current portion

non-current liabilities

Operating lease payable, net of current portion

Other non-current liabilities

Total non-current liabilities

Total liabilities

Commitments and Contingencies (see note 14)

Stockholders’ Equity

Convertible Series B Preferred stock, $ 0.01 par value;

non-current liabilities

and Contingencies (see note 16)

Stockholders’

Convertible Series

B Preferred stock, $ 0.001 par value;

5,000,000 shares authorized;

3,896,907 and 4,280,939 shares issued and outstanding as of June 30, 2025 and December 31, 2024

Common stock, $ 0.001 par value;

3,896,907 and 4,280,939 shares issued and outstanding as of September

30, 2025 and December 31, 2024

Common stock, $ 0.001

100,000,000 shares authorized;

9,858,716 and 6,990,227 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid in capital

Accumulated deficit

9,886,294 and 6,990,227 shares issued and outstanding as of September 30, 2025 and December

31, 2024, respectively

paid in capital

( 62,891,510 )

( 56,799,612 )

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

stockholders’ equity

Liabilities and Stockholders’ Equity

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

Statements of Operations (Unaudited)

For the Three Months Ended

For the Six Months Ended

Cost of Goods Sold

Selling Expenses

Research and Development

General and Administrative

Operating Loss

the Three Months Ended

the Nine Months Ended

of Goods Sold

and Development

and Administrative

( 2,100,085 )

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( 5,690,225 )

Other Income (Expense):

Financing charges

Interest expense

Change in fair value of warrant liability

Amortization of debt discount and issuance cost

Other expense

Total other income (expense), net

Income (Expense):

in fair value of warrant liability

of debt discount and issuance cost

other income (expense), net

( 1,103,371 )

2 unchanged sentences

( 6,091,898 )

Preferred stock dividends

Net Loss Available to Common Stockholders

( 6,793,596 )

stock dividends

Loss Available to Common Stockholders

$ ( 2,321,503 )

1 unchanged sentence

$ ( 6,711,613 )

Per-Share Data

Basic and diluted loss per share

Weighted Average Shares Outstanding

Basic and diluted

$ ( 6,838,416 )

and diluted loss per share

Average Shares Outstanding

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

Statements of Stockholders’ Equity (Deficit) (Unaudited)

For the Three and Six Months Ended June 30, 2024

Series B Preferred Stock

Stockholders’

the Three and Nine Months Ended September 30, 2024

Stockholder’s

at January 1, 2024

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( 5,258,382 )

NeurAxis, Inc.

Condensed Statements of Stockholders’ Equity (Deficit) (Unaudited)

For the Three and Six Months Ended June 30, 2025

Series B Preferred Stock

Stockholders’

paid in capital from warrants issued under consulting agreement

stock issued from agreements

discount on mandatory conversion of convertible promissory notes to Series B Preferred Stock

of convertible promissory notes to Series B Preferred Stock

( 1,755,234 )

at September 30, 2024

$ ( 55,351,706 )

$ ( 1,793,932 )

Statements of Stockholders’ Equity (Deficit) (Unaudited)

the Three and Nine Months Ended September 30, 2025

Stockholder’s

at January 1, 2025

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( 59,078,296 )

$ ( 59,078,296 )

of Series B Preferred Stock to common stock

of common stock pursuant to shelf registration statement

Vesting of restricted stock awards

of restricted stock units

( 1,690,418 )

3 unchanged sentences

$ ( 60,768,714 )

stock issued from agreements

of restricted stock units

( 2,122,796 )

at September 30, 2025

$ ( 62,891,510 )

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

Statements of Cash Flows (Unaudited)

the Six Months Ended

from Operating Activities

the Nine Months Ended

Flows from Operating Activities

$ ( 6,091,898 )

5 unchanged sentences

for losses on accounts receivable

disposal of property and equipment

on disposal of property and equipment

lease expense

5 unchanged sentences

lease liability

non-current liabilities

non-current assets and liabilities

cash used in operating activities

1 unchanged sentence

( 4,340,097 )

from Investing Activities

Flows from Investing Activities

to property and equipment

cash used in investing activities

from Financing Activities

Flows from Financing Activities

from issuance of common shares

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Disclosure of Operating Activities

Cash refunded

for income taxes

paid for interest

refunded for income taxes

Schedule of Non-Cash Investing and Financing Activities

of right of use asset

Derecognition

of right of use asset

of convertible promissory notes to Series B preferred stock

stock issued upon cashless exercise of warrants

stock issued upon cashless conversion of Series B Preferred Stock

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

of note payable to financing company for software subscription

stock issued for services

Common stock issued upon settlement of certain

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

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

of note payable to financing company for insurance premiums and software subscription

Offering costs included in accounts payable

Intangible asset purchase included in accrued expenses

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

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IB-STIM is a percutaneous electrical nerve field stimulator (PENFS) device that is indicated in patients 8-21 years of age with functional

abdominal pain associated with irritable bowel syndrome.

abdominal pain associated with irritable bowel syndrome and in patients 8 years and older with functional abdominal pain associated with functional dyspepsia and related nausea symptoms.

is indicated to evaluate the neuromuscular function of a patient’s ability to expel its contents from the rectum and as a qualitative

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GAAP”) and follow the requirements of the U.S.

Securities and Exchange Commission (“SEC”)

for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by

Securities and Exchange Commission (“SEC”) for

interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by U.S.

GAAP can be condensed or omitted.

These interim financial statements have been prepared on the same basis as the Company’s

annual financial statements and, in the opinion of management, reflect all adjustments which are necessary for a fair presentation of

the Company’s financial information.

These unaudited interim results are not necessarily indicative of the results to be expected

for the year ending December 31, 2025, or any other interim period or for any other future year.

These unaudited financial statements

should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December

These interim financial statements have been prepared on the same basis as the Company’s annual

financial statements and, in the opinion of management, reflect all adjustments which are necessary for a fair presentation of the Company’s

financial information.

These unaudited interim results are not necessarily indicative of the results to be expected for the year ending

December 31, 2025, or any other interim period or for any other future year.

These unaudited financial statements should be read in conjunction

with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2024.

Summary of Significant Accounting Policies

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preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during

the reporting periods.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements

and the reported amounts of revenues and expenses during the reporting periods.

significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these

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Actual results could differ from those estimates.

Reclassification

of Prior Year Amounts

prior year amounts have been reclassified to conform to current period presentation.

The Company reclassified $ 243,093

and $ 786,546

of General and Administrative Expenses to Selling Expenses in the Condensed Statements of Operations for the three and nine months

ended September 30, 2024, respectively.

The Company also reclassified $ 53,825

and $ 164,396

of General and Administrative Expenses to Research and Development Expenses in the Condensed Statements of Operations for the three

and nine months ended September 30, 2024, respectively.

These reclassifications had no impact on previously reported net loss, total assets,

total liabilities or total equity (deficit).

Receivable and Allowance for Credit Losses

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on accounts receivable by utilizing an aging schedule.

The allowance for credit losses was $ 5,000 and

of June 30, 2025 and December 31, 2024, respectively.

The Company recorded credit losses of $ 20,324

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

There were no credit losses for the three and six months ended June 30, 2025.

The allowance for credit losses was $ 7,200 and $ 5,000 as of September 30, 2025

and December 31, 2024, respectively.

The Company recorded credit losses of $ 2,717 and $ 1,085 for the three months ended September 30,

2025 and 2024, respectively, and $ 2,717 and $ 35,044 for the nine months ended September 30, 2025 and 2024, respectively.

are valued at the lower of cost or net realizable value.

Cost is determined using the weighted average method.

The inventory is

comprised of finished medical devices on hand.

Certain components within the devices have an expiration date that are removed from

current inventory and expensed at the date of expiration.

The Company recorded expired and other inventory charges of $ 12,174 and

the three and six months ended June 30, 2025, respectively.

There were no expired inventory charges recorded for the three and six

months ended June 30, 2024.

Inventory reserves totaled $ 17,195 and

of June 30, 2025 and December 31, 2024, respectively.

The inventory is comprised

of finished medical devices on hand.

Certain components within the devices have an expiration date that are removed from current inventory

and expensed at the date of expiration.

The Company recorded expired and other inventory charges of $ 11,598 and $ 2,030 for the three

months ended September 30, 2025 and 2024, respectively, and $ 24,339 add $ 2,030 for the nine months ended September 30, 2025 and 2024,

respectively.

Inventory reserves totaled $ 28,793 and $ 4,454 as of September 30, 2025 and December 31, 2024, respectively.

expenses consist primarily of advertising, marketing and promotion of the Company’s products including salaries and related personnel

costs and travel expenses.

Advertising expenses are expensed as incurred and amounted to $ 292,678 and $ 34,468 for the three months ended

September 30, 2025 and 2024, respectively, and $ 414,134 and $ 154,299 for the nine months ended September 30, 2025 and 2024, respectively.

and Development

and development expenses consist primarily of clinical research studies, new product development, costs of materials and supplies used

in research and development activities and salaries and related personnel costs for employees engaged in research and development activities

to have our IB-Stim and RED devices cleared by the FDA for other indications.

Research and development costs are expensed as incurred.

assets consist of software, patents, a trademark and a license.

Intangible assets are stated at their historical cost and amortized on

a straight-line basis over their expected useful lives.

Capitalized patent costs, net of accumulated amortization, includes legal costs

incurred for patent applications.

In accordance with ASC 350, once a patent is granted, we amortize the capitalized patent costs over

the remaining life of the patent using the straight-line method.

If the patent is not granted, we write off any capitalized patent costs

at that time.

Company purchased a trademark related to the Company’s name for $ 50,000 .

The trademark does not have a determinate life and therefore

the cost is not being amortized.

Company entered into an option agreement on April 12, 2023 to bring an optionor’s invention to commercialization via a royalty-bearing

licensing agreement.

The agreement required an initial payment of $ 1,000 and was fully amortized in the year ended December 31, 2024.

July 1, 2025, the Company terminated the NSS-2 Bridge license with Masimo in exchange for $ 200,000 of consideration payable in equal

installments on December 31, 2025, and June 30, 2026.

The termination agreement allowed the Company to recapture the rights to the trademark

Registration No.

7,394,465) and two patent applications (Application No.

18/821,225 and Application No.

29/960,608) that were licensed

to Masimo on April 9, 2020 for use in the reduction of the symptoms of opioid withdrawal.

The intellectual property will be amortized

over its remaining trademark life of approximately nine years.

Value Measurements

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the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities:

2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities:

prices in markets that are not active;

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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 June 30, 2025 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.

believes the estimated fair value of these accounts on September 30, 2025 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.

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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, 2025 and December 31, 2024.

In addition to assets and liabilities

that are recorded at fair value on a recurring basis, the Company had no assets that were measured on a nonrecurring basis as of June

30, 2025 and December 31, 2024.

were no transfers between any of the levels during the periods ended September 30, 2025 and December 31, 2024.

In addition to assets

and liabilities that are recorded at fair value on a recurring basis, the Company had no assets that were measured on a nonrecurring

basis as of September 30, 2025 and December 31, 2024.

and Diluted Net Income (Loss) per Share

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shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents that were outstanding for the periods

In periods when losses are reported, which is the case for the three and six month periods ended June 30, 2025 and 2024, respectively,

presented in these financial statements, the weighted average number of common shares outstanding excludes common stock equivalents because

their inclusion would be anti-dilutive.

In periods when losses are reported, which is the case for the three and nine month periods ended September 30, 2025 and 2024,

respectively, 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:

Schedule of Dilutive Common Stock Equivalents

Pre-Funded Warrants for Common

Restricted Stock Units

Series B Preferred Stock

Warrants for Common Stock

B Preferred Stock

Cumulative Series B Preferred Stock Dividends

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stock dividends

Net loss available to common stockholders

loss available to common stockholders

( 2,321,503 )

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economic factors affect the nature, amount, timing, and uncertainty of the Company’s revenue and cash flows.

Company’s products are sold to healthcare customers including hospitals, clinics and physician offices.

Sales to healthcare

customers generally lack seasonality and have a mild correlation with economic cycles.

All of the Company’s sales are to

customers located within the United States.

Sales contracts consist of purchase orders that are short-term (i.e., less than or equal

to one year).

All of the Company’s

products are sold to healthcare customers including hospitals, clinics and physician offices.

Sales to healthcare customers generally

lack seasonality and have a mild correlation with economic cycles.

All of the Company’s sales are to customers located within the

United States.

Sales contracts consist of purchase orders that are short-term (i.e., less than or equal to one year).

Company typically satisfies its performance obligations for goods at a point in time as they are received at the customer’s destination

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the time revenue is recognized, the Company estimates expected returns and excludes those amounts from revenue.

The Company also

maintains appropriate accounts to reflect the effects of expected returns on the Company’s financial position and periodically

adjusts those accounts to reflect its actual return experience.

The estimated returns reserve totaled $ 5,000

as of June 30, 2025 and December 31, 2024, respectively.

The Company also maintains

appropriate accounts to reflect the effects of expected returns on the Company’s financial position and periodically adjusts those

accounts to reflect its actual return experience.

The estimated returns reserve totaled $ 8,714 and $ 5,000 as of September 30, 2025 and

December 31, 2024, respectively.

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

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to transfer goods to the customer).

of June 30, 2025, we had stockholders’ equity of $ 4,253,294 and short-term outstanding borrowings of $ 121,433 .

Additionally, we

had cash of $ 5,988,456 and a working capital surplus of $ 4,271,446 as of June 30, 2025.

However, we have incurred losses and negative

cash flows from operations since inception and have funded our operations primarily with a combination of sales, debt, and the sale of

capital stock.

of September 30, 2025, we had stockholders’ equity of $ 2,284,941 and short-term outstanding borrowings of $ 195,658 .

Additionally,

we had cash of $ 4,377,109 and a working capital surplus of $ 1,840,599 as of September 30, 2025.

However, we have incurred losses and

negative cash flows from operations since inception and have funded our operations primarily with a combination of sales, debt, and the

sale of capital stock.

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

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Issued Accounting Pronouncements

July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05,

Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets ,

which allows the election of a practical expedient when developing reasonable and supportable forecasts as part of estimating expected

credit losses that assumes conditions present at the balance sheet date do not change for the remaining life of the asset.

that elect the practical expedient should apply the provisions prospectively for annual reporting periods beginning after December 15,

2025, and interim reporting periods within the annual reporting periods.

Early adoption is permitted.

Adoption is not expected to have

a material impact on the Company’s financial statements.

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

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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, 2025.

The current allowance is $ 1,012,800 as of September 30, 2025.

The current loan balances are as follows:

Schedule of Related Party Transactions

December 31, 2024

Shareholder 1

Shareholder 2

Principal balance

for collection risk

( 1,012,800 )

Company was granted an exclusive, worldwide non-transferable, royalty-free license for the auricular portion of certain patents

owned by a limited liability company in which the Company’s President and Chief Executive Officer and Chief Regulatory,

Compliance and Privacy Officer both maintain an ownership interest.

The license allows for the development, marketing and sales of

electro-therapy treatments by stimulation of cranial nerves, cranial nerve branches, auricular nerves, auricular nerve branches,

auricular nerve bundles and auricular anatomical structures in human patient.

The exclusive license agreement expires on October 18,

2037, may be terminated by either party upon 60 days prior written notice and requires the Company to pay costs associated with the

maintenance, prosecution and continuation of patent filings.

The Company’s Board of Directors pre-approved the reimbursement

of up to $ 10,000

for the year ending December 31, 2025.

license costs were incurred for the three months ended June 30, 2025 and 2024, respectively.

The license costs totaled $ 1,317

and $ 0 for the six months

ended June 30, 2025 and 2024, respectively.

amounts were owed to the limited liability company as of June 30, 2025 and December 31, 2024, respectively.

time to time, a member of the Company’s Board of Directors purchases IB-STIM devices from the Company at cost to conduct

research and development activities.

The Company’s Board of Directors pre-approved the sale of these IB-STIM devices up to

for the year ended December 31, 2025.

The Company sold IB-STIM devices for a total of $ 4,394

for the three months ended June 30, 2025 and 2024, respectively, and $ 6,351

for the six months ended June 30, 2025 and 2024, respectively.

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

firm’s managing partner and majority shareholder.

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

a continuous basis.

The services totaled $ 9,808

for the three months ended June 30, 2025 and 2024, respectively, and $ 31,679

for the six months ended June 30, 2025 and 2024, respectively.

The Company owed the firm $ 2,596

as of June 30, 2025 and December 31, 2024, respectively, that is included in accounts payable in the Condensed Balance Sheets.

June 28, 2024, the Company also issued 20,000

common shares with a fair value $ 55,600

to the former Chief Financial Officer for services rendered during the IPO process.

( 1,012,800 )

Company was granted an exclusive, worldwide non-transferable, royalty-free license for the auricular portion of certain patents owned

by a limited liability company in which the Company’s President and Chief Executive Officer and Chief Regulatory, Compliance and

Privacy Officer both maintain an ownership interest.

The license allows for the development, marketing and sales of electro-therapy treatments

by stimulation of cranial nerves, cranial nerve branches, auricular nerves, auricular nerve branches, auricular nerve bundles and auricular

anatomical structures in human patient.

The exclusive license agreement expires on October 18, 2037, may be terminated by either party

upon 60 days prior written notice and requires the Company to pay costs associated with the maintenance, prosecution and continuation

of patent filings.

The Company’s Board of Directors pre-approved the reimbursement of up to $ 10,000 for the year ending December

License costs incurred were $ 118 and $ 1,893 for the three months ended September 30, 2025 and 2024, respectively, and $ 1,435

and $ 1,893 for the nine months ended September 30, 2025 and 2024, respectively.

The Company owed the limited liability company $ 118 and

$ 0 as of September 30, 2025 and December 31, 2024, respectively.

time to time, a member of the Company’s Board of Directors purchases IB-STIM devices from the Company at cost to conduct research

and development activities.

The Company’s Board of Directors pre-approved the sale of these IB-STIM devices up to $ 16,000 for the

year ended December 31, 2025.

The Company sold IB-STIM devices for a total of $ 1,515 and $ 0 for the three months ended September 30,

2025 and 2024, respectively, and $ 7,865 and $ 978 for the nine months ended September 30, 2025 and 2024, respectively.

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

He was the firm’s

managing partner and majority shareholder.

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

The services totaled $ 6,778 and $ 23,467 for the three months ended September 30, 2025 and 2024, respectively, and $ 38,457 and

$ 114,635 for the nine months ended September 30, 2025 and 2024, respectively.

The Company owed the firm $ 2,500 and $ 4,173 as of September

30, 2025 and December 31, 2024, respectively, that is included in accounts payable in the Condensed Balance Sheets.

On June 28, 2024,

the Company also issued 20,000 common shares with a fair value $ 55,600 to the former Chief Financial Officer for services rendered during

the IPO process.

Prepaids and Other Current Assets

and other current assets consisted of the following:

of Prepaids and Other Current Assets

Prepaid insurance

Prepaid software subscriptions

Schedule of Prepaids and Other Current Assets

software subscriptions

prepaids and other current assets

Other Non-Current Assets

non-current assets consisted of the following:

Schedule of Other Non-Current Assets

September 30,

Deferred offering costs

Prepaid software subscription

Security deposit

Total other non - current assets

Accrued Expenses

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Schedule of Accrued Expenses

Compensation and

Settled litigation

Advisory fees

Bridge Lease Termination Fee

accrued expenses

Notes Payable

August 9, 2024, the Company entered into a $ 210,000 promissory note to finance the premiums of a business insurance policy, bearing interest

at a rate of 7.40 % per annum that matured on June 9, 2025 .

On November 1, 2024, the Company entered into a second promissory note with

a principal balance of $ 64,328 to finance premiums of other business insurance policies, bearing interest at a rate of 7.65 % per annum

and maturing on September 1, 2025 .

On May 26, 2025, the Company entered into a third promissory note with a principal balance of $ 122,253

to finance subscription fees on certain software arrangements maturing on March 1, 2027 .

The outstanding principal was $ 121,433 and $ 154,152

as of June 30, 2025 and December 31, 2024, respectively.

August 9, 2025, the Company entered into a $ 170,000 promissory

note to finance the premiums of a business insurance policy, bearing interest at an annual rate of 7.45 %

and maturing on June

9, 2026 , to replace the $ 210,000 promissory

note entered into on August 9, 2024, with an annual interest rate of 7.40 %

that matured on June

9, 2025 in conjunction with the annual

renewal period.

On May 26, 2025, the Company also entered into a promissory note with a principal balance of $ 122,253 to

finance subscription fees on certain software arrangements maturing on March

The outstanding principal was

of which $ 19,666

is included in other non-current liabilities, and

of September 30, 2025 and December 31, 2024, respectively.

Convertible Notes

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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.

There was no amortization

of the debt discount for the three and six months ended June 30, 2025 as the unamortized debt discount of $ 165,577 was reclassified to

Additional Paid-In-Capital in the Statements of Stockholders’ Equity (Deficit) on August 15, 2024 upon mandatory conversion.

expense totaled $ 13,434 and $ 80,697 for the three months ended June 30, 2025 and 2024, respectively, and $ 15,672 and $ 107,257 for the

six months ended June 30, 2025 and 2024, respectively.

The Company’s accrued interest totaled $ 66,648 as of June 30, 2025 and December

on the Amended 2024 Convertible Notes totaled $ 40,888 and $ 126,387 for the three and nine months ended September 30, 2024.

no amortization of the debt discount for the three and nine months ended September 30, 2025 as the unamortized debt discount of $ 165,577

was reclassified to Additional Paid-In-Capital in the Statements of Stockholders’ Equity (Deficit) on August 15, 2024 upon mandatory

expense totaled $ 29,661 and $ 64,676 for the three months ended September 30, 2025 and 2024, respectively, and $ 45,333 and $ 171,934 for

the nine months ended September 30, 2025 and 2024, respectively.

The Company’s accrued interest totaled $ 66,648 as of September

30, 2025 and December 31, 2024.

Company’s leases are comprised of operating leases for office space.

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The Company did not have any finance

leases as of June 30, 2025 and December 31, 2024.

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

lease in Versailles started January 1, 2022 and had 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 31st of each year.

The current monthly lease

payment for this lease is $ 1,800

per annum increase.

A new lease in Carmel, Indiana commenced January 1, 2024.

The initial term is five years and five months.

monthly lease payment started at $ 6,721

leases as of September 30, 2025 and December 31, 2024.

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

lease in Batesville, Indiana commenced on August 1, 2025, and has an initial term of three years, with automatic one year renewals

subject to an annual 4% rent escalation, unless 60 day notice of vacating is given.

On May 19, 2025, the Company terminated its

prior lease in Versailles, Indiana, with a monthly lease payment of $ 1,800 ,

effective July 31, 2025, without penalty due to relocation of the office space to Batesville, Indiana, with the same landlord.

current monthly lease payment is $ 2,000

with no escalations during the initial lease term.

During the three months ended September 30, 2025, the Company derecognized the

right of use asset and operating lease liabilities of $ 29,014

and $ 29,286 ,

respectively, related to the terminated lease in Versailles, Indiana.

Correspondingly, the Company recognized a right of use asset

and operating lease liabilities of $ 63,170

and $ 37,970 ,

respectively, during the three months ended September 30, 2025, related to the new lease in Batesville, Indiana.

On June 13, 2025,

the Company prepaid $ 25,200 towards the monthly lease payments which will be amortized over the initial lease term.

Carmel, Indiana commenced January 1, 2024, with an initial term of five years and five months.

The monthly lease payment started at

with an annual increase of 2.5 %.

The Company was only obligated to pay an amount equal to 50% of the monthly base rent for the first 10 months of the

Company recognized operating lease expense of $ 25,558 and $ 20,667 for the three months ended June 30, 2025 and 2024, respectively, and

$ 51,082 and $ 46,423 for the six months ended June 30, 2025 and 2024, respectively, including short-term lease expense and variable lease

May 19, 2025, the Company terminated its lease in Versailles, Indiana, effective July 31, 2025, without penalty due to relocation of

the office space to Batesville, Indiana, with the same landlord effective August 1, 2025.

Company recognized operating lease expense of $ 24,193 and $ 27,891 for the three months ended September 30, 2025 and 2024, respectively,

and $ 75,275 and $ 74,314 for the nine months ended September 30, 2025 and 2024, respectively, including short-term lease expense and variable

following table presents information related to the Company’s operating leases:

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lease right-of-use assets

Other current liabilities

current liabilities

lease liabilities

Weighted-average remaining

lease term (in years)

Weighted-average discount

of June 30, 2025, the maturities of the Company’s operating lease liabilities were as follows:

Weighted-average

remaining lease term (in years)

Weighted-average

discount rate

of September 30, 2025, the maturities of the Company’s operating lease liabilities were as follows:

Schedule of Maturities Operating Lease Liabilities

Total lease payments

lease payments

imputed interest

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Common Stock and Warrants

Company authorized 100,000,000 shares of common stock, of which 9,858,716 and 6,990,227 shares were issued and outstanding as of June

Company authorized 100,000,000 shares of common stock, of which 9,886,294 and 6,990,227 shares were issued and outstanding as of September

30, 2025 and December 31, 2024, respectively.

September 8, 2025, the Company issued 1,518 shares of common stock to a pre-IPO Series A Preferred Stock shareholder to settle certain

claims with a fair value of $ 3,674 .

August 19, 2025, the Company issued 14,060 shares of common stock, net of taxes, upon the acceleration of 17,534 restricted stock units

to three prior employees.

June 30, 2025, the Company issued 289,779 shares of common stock to an investor upon the exercise of an equivalent amount of common stock

warrants for gross proceeds of $ 29 .

June 26, 2025, the Company issued 12,000 shares to an existing shareholder to settle a dispute with a fair value of $ 30,240 .

June 9, 2025, the Company issued 42,016 shares of common stock to an investor upon conversion of an equivalent amount of Series B Preferred

May 22, 2025, the Company issued 1,538,461 shares of common stock for gross proceeds totaling $ 4,999,999 pursuant to a securities purchase

agreement with certain institutional investors at a purchase price of $ 3.25 per share of common stock.

The common shares were offered

by the Company pursuant to its shelf registration statement on Form S-3 (File No.

333-283798) which was declared effective by the Securities

and Exchange Commission on February 11, 2025, a base prospectus dated February 11, 2025 and a prospectus supplement dated May 20, 2025.

The placement agent fees and other offering expenses totaled $ 490,799 for the three and six months ended June 30, 2025.

May 22, 2025, the Company issued 1,538,461

shares of common stock for gross proceeds totaling $ 4,999,999

pursuant to a securities purchase agreement with certain institutional investors at a purchase price of $ 3.25

per share of common stock.

The common shares were offered by the Company pursuant to its shelf registration statement on Form S-3

333-283798) which was declared effective by the Securities and Exchange Commission on February 11, 2025, a base prospectus

dated February 11, 2025 and a prospectus supplement dated May 20, 2025.

The placement agent fees and other offering expenses totaled

$ 0 and $ 490,799

for the three and nine months ended September 30, 2025, respectively.

May 21, 2025, the Company issued 430,580 shares of common stock to certain investors upon the exercise of an equivalent amount of common

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with $ 186 reclassified from additional paid in capital to common stock in the Condensed Statements of Stockholders’ Equity (Deficit).

the three months ended September 30, 2024, the Company issued (i) 10,145 shares of common stock to a vendor pursuant to a marketing agreement

with a fair value of $ 30,131 , (ii) 102,860 shares of common stock to pre-IPO Series A Preferred Stock shareholders to settle certain

claims with a fair value of $ 293,791 and (iii) 25,601 shares of common stock to holders of the Amended 2024 Convertible Promissory Notes

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

the three months ended June 30, 2024, the Company issued (i) 53,063 shares of common stock to an existing shareholder to settle a convertible

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related to the Company’s transition to a public company.

following is a summary of warrant activity for common stock during the six months ended June 30, 2025 and year ended December 31, 2024:

following is a summary of warrant activity for common stock during the nine months ended September 30, 2025 and year ended December 31,

Schedule of Warrant Activity for Common Stock

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Weighted-Avg.

Outstanding as

of January 1, 2024

as of January 1, 2024

as of December 31, 2024

( 1,223,006 )

as of June 30, 2025

following table summarizes the Company’s warrants outstanding and exercisable as of June 30, 2025:

as of September 30, 2025

following table summarizes the Company’s warrants outstanding and exercisable as of September 30, 2025:

Schedule of Warrants outstanding and Exercisable

Investor Warrant

September 18,

Convertible Notes

Various in 2027

Convertible Notes

Various in 2028

Underwriter Warrants

August 8, 2028

Agreement Warrants

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par value Series B Preferred Stock with 3,896,907

shares issued and outstanding as of June 30, 2025.

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 %

and 4,280,939 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively.

Series B Preferred Stock

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

Cumulative dividends accrue

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

June 30, 2025.

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.

September 30, 2025.

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

to August 15, 2024 the Company had 1,000,000 and 120,000 shares authorized as Series A and Series Seed Preferred Stock, respectively,

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on August 15, 2024.

to the terms of the Amended 2024 Convertible Notes, the principal balance of $ 4,935,000 on August 15, 2024 was mandatorily converted

into 2,073,524 Series B Preferred Shares at a conversion price of $ 2.38 .

Subsequently, the Company then proceeded to issue 64,913 shares

of Series B Preferred Stock to various investors for $ 154,500 .

November 11, 2024, the Company’s shareholders authorized (i) an increase in the number of designated Series B Preferred Stock to

5,000,000 shares and (ii) an extension of the 8.5 % per annum cumulative dividend period to December 31, 2026.

Subsequently, the Company

issued 2,100,840 shares of Series B Preferred Stock to a dedicated life sciences fund for $ 5,000,000 and 41,662 shares of Series B Preferred

Stock to various investors for $ 99,164 .

to the terms of the Amended 2024 Convertible Notes, the principal balance of $ 4,935,000

on August 15, 2024 was mandatorily converted into 2,073,524

Series B Preferred Shares at a conversion price of $ 2.38 .

On October 15, 2024, the Company then proceeded to issue 64,913

shares of Series B Preferred Stock to various investors for $ 154,500 .

November 11, 2024, the Company’s shareholders authorized (i) an increase in the number of designated Series B Preferred Stock

shares and (ii) an extension of the 8.5 %

per annum cumulative dividend period to December 31, 2026.

On November 12, 2024 and November 14, 2024, the Company issued 2,100,840

shares of Series B Preferred Stock to a dedicated life sciences fund for $ 5,000,000

shares of Series B Preferred Stock to various investors for $ 99,164 , respectively.

May 20, 2025, the Company issued 342,016 shares of common stock to certain investors upon conversion of an equivalent amount of Series

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event, thereby triggering payment of the liquidation preferences.

of June 30, 2025 and December 31, 2024, preferred stock dividends were neither declared nor paid.

Series B Preferred Stock

undeclared cumulative dividends totaled $ 207,465 , or

$ 0.02 per share, and $ 421,008 , or $ 0.05 per share, for the three and six months ended June 30, 2025,

respectively.

Series B Preferred Stock did not exist before August 15, 2024.

of September 30, 2025 and December 31, 2024, preferred stock dividends were neither declared nor paid.

Series B Preferred Stock undeclared

cumulative dividends totaled $ 198,707 , or $ 0.02 per share, and $ 44,820 , or $ 0.01 per share, for the three months ended September 30, 2025

and 2024 respectively, and $ 619,715 , or $ 0.06 per share, and $ 44,820 , or $ 0.01 per share, for the nine months ended September 30, 2025

and 2024, respectively.

Stock-Based Compensation

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on January 3, 2025, March 4, 2025 and May 15, 2025 to certain employees as follows:

of Restricted Stock Units

Schedule of Restricted Stock Units

Average Fair Value

Outstanding as of December 31, 2024

as of June 30, 2025

as of December 31, 2024

as of September 30, 2025

RSUs are subject to a three-year cliff-vesting period and are payable in shares of the Company’s common stock.

The RSUs fully vest

upon (i) death or disability or (ii) change of control.

The RSUs fully

vest upon (i) death or disability or (ii) change of control.

Dividend equivalents accrue on RSUs and are paid upon vesting;

there were no

accrued dividends on unvested RSUs as of June 30, 2025.

No RSUs were granted during the year ended December 31, 2024.

were no accrued dividends on unvested RSUs as of September 30, 2025.

On August 19, 2025, 17,534

RSUs were issued as 14,060

shares of common stock, net of taxes.

As of September 30, 2025, 3,334

RSUs are pending issuance and were subsequently issued on October 29, 2025 in accordance with the normal vesting schedule.

were granted during the year ended December 31, 2024.

stock-based compensation expense related to RSUs is classified in the Company’s Condensed Statements of Operations as general and

administrative expense and amounted to $ 173,043 and $ 0 for the three months ended June 30, 2025 and 2024, respectively, and $ 278,854

and $ 227,000 for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, total unrecognized stock-compensation

administrative expense and amounted to $ 160,865 and $ 0 for the three months ended September 30, 2025 and 2024, respectively, and $ 439,719

and $ 227,000 for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, total unrecognized stock-compensation

expense relating to unvested stock awards granted under the Company’s share-based compensation plans amounted to $ 1,282,422 .

following is a summary of the Company’s outstanding stock options as of June 30, 2025 and December 31, 2024:

following is a summary of the Company’s outstanding stock options as of September 30, 2025 and December 31, 2024:

Schedule of Stock Option Activity

Remaining Contractual Life (in years)

Exercise Price

as of December 31, 2024

as of June 30, 2025

and Exercisable as of June 30, 2025

was no stock-based compensation expense related to stock options recorded for the three and six months ended June 30, 2025 and 2024.

as of September 30, 2025

and Exercisable as of September 30, 2025

was no stock-based

compensation expense related to stock options recorded for the three and nine months ended September 30, 2025 and 2024.

Warrant Liabilities

Company has evaluated financial instruments arising from warrants that are issued and outstanding as of June 30, 2025 and December 31,

The Company utilizes a Black-Scholes option-pricing model to compute the fair value of the liability 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 (i) an exercise price of $ 8.76 per share, (ii) an expected remaining term of each warrant based on the remaining contractual

Company has evaluated financial instruments arising from warrants that are issued and outstanding as of September 30, 2025 and December

The Company utilizes a Black-Scholes option-pricing model to compute the fair value of the liability 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 (i) an exercise price of $ 8.76 per share, (ii) an expected remaining term of each warrant based on the remaining contractual

maturity of the each warrant, (iii) estimated volatility ranging from 75.0 % to 89.9 % based on historical stock prices of comparable companies

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the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

following are the changes in the warrant liabilities during the three and six months ended June 30, 2025 and the year ended December

following are the changes in the warrant liabilities during the three and nine months ended September 30, 2025 and the year ended December

Schedule of Changes in Warrant Liabilities

Warrant liabilities

as of January 1, 2024

liabilities as of January 1, 2024

in fair value of warrant liabilities

Warrant liabilities as of

December 31, 2024

liabilities as of December 31, 2024

in fair value of warrant liabilities

Warrant liabilities as of

June 30, 2025

liabilities as of September 30, 2025

Employee Benefits

July 1, 2025, the Compensation Committee of the Board of Directors (“Board”) of the Company adopted the NeurAxis, Inc.

Employee Stock Purchase Plan (the “ESPP”), effective as of the same date and subject to Shareholder approval by July 1, 2026.

The purpose of the ESPP is to provide eligible employees an opportunity to acquire common stock of the Company at a 15 % discount using

payroll deductions.

The maximum number of shares of the Company’s common stock that may be issued under the ESPP is 100,000, subject

to an annual increase on January 1st of each year from 2026 through 2035 by the lesser of (i) 1% of the Company’s outstanding capital

stock as of the prior December 31st or (ii) 100,000 shares.

The Board may reduce or eliminate this annual increase before February 1st

of any given year.

Segment Information

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Policies (see Footnote 2).

The CODM regularly evaluates the performance of the IB-STIM segment for the purpose of allocating

resources based on net sales and operating loss, both of which are reported in the Condensed Statements of Operations.

The CODM uses

net sales to evaluate IB-STIM’s adoption and utilization by insurance carriers and physicians.

As NeurAxis is an emerging

growth company, operating loss is used to monitor the Company’s cost structure in order to achieve future segment

profitability.

Both net sales and operating loss are measured against the budget on a periodic basis to assess achievement toward

annual compensation incentive targets.

The Company’s CODM is its Chief Executive Officer.

The Chief Operating Decision Maker (“CODM”) regularly evaluates the performance of the

IB-STIM segment for the purpose of allocating resources based on net sales and operating loss, both of which are reported in the

Condensed Statements of Operations.

The CODM uses net sales to evaluate IB-STIM’s adoption and utilization by insurance

carriers and physicians.

As NeurAxis is an emerging growth company, operating loss is used to monitor the Company’s cost

structure in order to achieve future segment profitability.

Both net sales and operating loss are measured against the budget on a

periodic basis to assess achievement toward annual compensation incentive targets.

The Company’s CODM is its President and

Chief Executive Officer.

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

of Reconciles the Company’s Net Sales and Operating Loss

months ended June 30,

Selling Expenses

& Development (a)

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

September 30,

of Goods Sold

and Development (a)

and Benefits (a)

Operating Expenses (a) (b)

Segment Operating

Operating Loss

( 2,100,085 )

2 unchanged sentences

( 5,690,225 )

Fair Value of Warrant Liability

in Fair Value of Warrant Liability

of Debt Discount and Issuance Cost

4 unchanged sentences

$ ( 6,091,898 )

The significant expense

categories and amounts align with the segment-level information provided on a regular basis to the CODM.

Other operating expenses

include advertising, rent and utilities, insurance, depreciation and amortization, travel, software subscription fees, board fees

and bad debt expense.

segment assets for IB-STIM amounted to $ 7,087,999 and $ 4,757,572 as of June 30, 2025 and December 31, 2024, respectively.

Total segment

capital expenditures for IB-STIM amounted to $ 7,288 and $ 8,686 for the three months ended June 30, 2025 and 2024, respectively, and $ 25,288

and $ 23,408 for the six months ended June 30, 2025 and 2024, respectively.

Total segment depreciation and amortization amounted to $ 12,885

and $ 10,970 for the three months ended June 30, 2025 and 2024, respectively, and $ 19,241 and $ 21,707 for the six months ended June 30,

2025 and 2024, respectively.

segment non-cash charges settled in common stock include consulting and advisory fees totaling $ 0 and $ 85,731 for the three months ended

June 30, 2025, and 2024, respectively, and $ 112,493 and $ 285,981 for the six months ended June 30, 2025 and 2024, respectively.

$ ( 6,793,596 )

significant expense categories and amounts align with the segment-level information provided on a regular basis to the CODM.

operating expenses include rent and utilities, insurance, depreciation and amortization, travel, software subscription fees, board

fees and bad debt expense.

segment assets for IB-STIM amounted to $ 5,776,363 and $ 4,757,572 as of September 30, 2025 and December 31, 2024, respectively.

segment capital expenditures for IB-STIM amounted to $ 0 and $ 4,368 for the three months ended September 30, 2025 and 2024, respectively,

and $ 25,288 and $ 27,776 for the nine months ended September 30, 2025 and 2024, respectively.

Total segment depreciation and amortization

amounted to $ 16,205 and $ 9,273 for the three months ended September 30, 2025 and 2024, respectively, and $ 35,446 and $ 30,980 for the

nine months ended September 30, 2025 and 2024, respectively.

segment non-cash charges settled in common stock include consulting and advisory fees and settlement of certain claims totaling

$ 33,913 and $ 384,832 for the three months ended September 30, 2025 and 2024, respectively, Significant segment non-cash charges

settled in common stock include consulting and advisory fees and settlement of certain claims totaling $ 146,406

and $ 1,384,011

for the nine months ended September 30, 2025 and 2024, respectively.

Settled Litigation

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the RICO Act, as well as of fraudulent misrepresentation, intentional misrepresentation by concealment, and civil conspiracy and sought

compensatory damages in excess of $ 5 million, pre-judgment interest, punitive damages, attorney’s fees, court costs and designation

compensatory damages in excess of $ 5,000,000 , pre-judgment interest, punitive damages, attorney’s fees, court costs and designation

of the case as a class action.

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2026 as filed with the United States District Court for the District of Maryland with the settlement agreement duly executed on May 15,

The Company recorded a charge of $ 11,471 and $ 630,568 for the three and six months ended June 30, 2025, respectively, in the Condensed

The Company recorded a charge of $ 0 and $ 630,568 for the three and nine months ended September 30, 2025, respectively, in the Condensed

Statements of Operations classified as general and administrative expense, while interest expense will be recorded as incurred.

June 30, 2025, the Company accrued $ 375,000 as accrued expenses and $ 267,540 as other non-current liabilities in the Condensed Balance

September 30, 2025, the Company accrued $ 562,500 as accrued expenses and $ 104,640 as other non-current liabilities in the Condensed Balance

Commitments and Contingencies

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and retains ownership.

The manufacturer bears the risk of loss of and damage to the equipment and consigned materials.

The manufacturer bears the risk of loss and damage to the equipment and consigned materials.

Performance under

7 unchanged sentences

services rendered totaling $ 180,000 during the three months ended March 31, 2025.

Company settled a 2023 convertible note dispute with an existing shareholder for $ 230,824 during the six months ended June 30, 2024.

The Board approved the issuance of 53,063 common shares on April 4, 2024 as consideration in lieu of payment recorded as financing charges

in the Condensed Statements of Operations.

June 28, 2024, the Company issued 90,032 shares of common stock to various pre-IPO Series A Preferred Stock shareholders to settle certain

The Company recorded the fair value of the settlements totaling $ 286,458 for the three and six months ended June 30, 2024, as

Other Expense in the Condensed Statements of Operations.

Furthermore, the Company authorized the issuance of 104,378 shares of its common

stock to settle the remaining claims with pre-IPO Series A Preferred Stock shareholders recorded at a fair value of $ 290,171 for the

three and six months ended June 30, 2024, as Other Expense in the Condensed Statements of Operations and Accrued Expenses in the Condensed

Balance Sheets as of June 30, 2024.

As of June 30, 2025, 1,518 shares of common stock authorized to settle these claims with a fair value

of $ 4,220 have not yet been issued as of the reporting date as the Company awaits execution of the settlement agreement by one counterparty.

There were no shares of common stock issued to settle any claims during the three and six

months ended June 30, 2025.

Company issued 12,000 and 0 common shares for the three months ended September 30, 2025 and 2024, respectively, and 12,000 and 53,063

common shares for the nine months ended September 30, 2025 and 2024, respectively, to settle certain 2023 convertible note and warrant

disputes with an existing shareholder.

The Company recorded the fair value of the settlements totaling $ 30,240 and $ 0 for the three months

ended September 30, 2025 and 2024, respectively, and $ 30,240 and $ 230,824 for the nine months ended September 30, 2025 and 2024, respectively,

as Financing Charges in the Condensed Statements of Operations.

Company issued 1,518 and 102,860 shares of common stock for the three months ended September 30, 2025 and 2024, respectively, and 1,518

and 192,892 shares of common stock for the nine months ended September 30, 2025 and 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 $ 7,841 and $ 580,249 for

the three and nine months ended September 30, 2024, respectively, as Other Expense in the Condensed Statements of Operations.

did not record a charge for the issuance of the 1,518 common shares for the three and nine months ended September 30, 2025 as they were

previously authorized for settlement with a fair value of $ 3,674 that was recorded as Other Expense in the Condensed Statements of Operations

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

Employment Agreements

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The agreements had an employment start

date of October 1, 2022, with initial terms from two 2

to five years and optional one-year renewals .

date of October 1, 2022, with initial terms from two 2 to five years and optional one-year renewals .

are seven key employees that have stock options of the Company totaling 1,238,712 shares.

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employment agreement and to clarify that there is no modification to the stock option agreements.

special options bonuses of $ 14,821,830 were contingent upon a successful initial public offering and will be recorded when paid.

Company recorded the fair value of the stock options totaling $ 8,596,661 on the grant date.

In addition, a $ 6,225,169 incremental tax

gross up payment is contingent upon the employees exercising their special bonus provision which will be recorded when paid.

April 10, 2024, the employment of the Company’s Chief Operating Officer was terminated.

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The Company is contracted to provide health care coverage through October 2025 and has accrued for that

obligation totaling $ 10,281 and $ 21,418 classified as Accrued Expenses in the Condensed Balance Sheets as of June 30, 2025 and December

obligation totaling $ 4,284 and $ 21,418 classified as Accrued Expenses in the Condensed Balance Sheets as of September 30, 2025 and December

31, 2024, respectively.

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Subsequent Events

July 1, 2025, the Company terminated the NSS-2 Bridge license with Masimo in exchange for $ 200,000 of consideration payable in equal

installments on December 31, 2025 and June 30, 2026.

The termination agreement allowed the Company to recapture the rights to the trademark

Registration No.

7,394,465) and two patent applications (Application No.

18/821,225 and Application No.

29/960,608) that were licensed

to Masimo on April 9, 2020 for use in the reduction of the symptoms of opioid withdrawal.

On July 1, 2025, the Compensation Committee of

the Board of Directors (“Board”) of the Company adopted the NeurAxis, Inc.

2025 Employee Stock Purchase Plan (the “ESPP”),

effective as of the same date and subject to Shareholder approval by July 1, 2026.

The purpose of the ESPP is to provide eligible employees

an opportunity to acquire common stock of the Company at a 15 % discount using payroll deductions.

The maximum number of shares

of the Company’s common stock that may be issued under the ESPP is 100,000, subject to an annual increase on January 1st of each year

from 2026 through 2035 by the lesser of (i) 1% of the Company’s outstanding capital stock as of the prior December 31st or (ii) 100,000

The Board may reduce or eliminate this annual increase before February 1st of any given year.

October 22, 2025, the Company issued 100,000 shares of common stock to certain investors upon conversion of an equivalent amount of

Series B Preferred Stock.

October 27, 2025, pursuant to the August 2025 At The Market Offering Agreement with Craig-Hallum Capital Group LLC, the Company

issued 623,184

shares of common stock to investors for gross proceeds of $ 2,728,424

with such shares registered pursuant to the Company’s effective Registration Statement on Form S-3 (File No.

333-283798), previously filed with the Securities and Exchange Commission (“SEC”) on December 13, 2024, and declared

effective on February 11, 2025, and the related prospectus supplements filed with the SEC on August 29, 2025, and on October 23,

On October 28, 2025, the Company issued 40,000 shares of common stock

to certain investors upon the exercise of an equivalent amount of common stock warrants for gross proceeds of $ 95,200 .

On October 29, 2025, the Company issued 3,334 shares of common stock to an employee upon the

vesting of RSUs.

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

1 unchanged sentence

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