What changed in this filing

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Item 1. Financial Statements

2026-05-12 compared with 2025-11-10 · 548 added, 678 removed, 397 unchanged (76% of the section changed)

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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:

and equipment, at cost:

- accumulated depreciation

and equipment, net

lease right of use asset, net

non-current assets

portion of operating lease payable

Cash and cash equivalents

Accounts receivable, net of credit losses of $ 7,220 and $ 7,326 as of March 31, 2026 and December 31, 2025, respectively

Inventories, net of reserves of $ 28,048 and $ 34,524 as of March 31, 2026 and December 31, 2025, 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

Other non-current assets

Current Liabilities:

lease payable, net of current portion

non-current liabilities

Accounts payable

Accrued expenses

Current portion of operating lease payable

Notes payable

Customer deposits

Warrant liabilities

Total current liabilities

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 September

30, 2025 and December 31, 2024

Common stock, $ 0.001

Operating lease payable, net of current portion

Other non-current liabilities

Total liabilities

Commitments and contingencies (see note 15)

Stockholders’ Equity

Convertible Series B Preferred stock, $ 0.001 par value;

5,000,000 shares authorized, 3,796,907 shares issued and outstanding as of March 31, 2026 and December 31, 2025

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

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

31, 2024, respectively

paid in capital

11,450,045 and 10,652,812 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid in capital

Accumulated deficit

( 66,361,599 )

( 64,600,167 )

stockholders’ equity

Liabilities and Stockholders’ Equity

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

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

Statements of Operations (Unaudited)

the Three Months Ended

the Nine Months Ended

of Goods Sold

and Development

and Administrative

( 2,100,085 )

( 1,651,273 )

( 6,113,040 )

( 5,690,225 )

Income (Expense):

in fair value of warrant liability

of debt discount and issuance cost

other income (expense), net

( 1,103,371 )

For the Three Months Ended

Cost of Goods Sold

Selling Expenses

Research and Development

General and Administrative

Operating Loss

( 1,740,679 )

( 2,295,098 )

Other Income (Expense):

Interest expense

Change in fair value of warrant liability

Total other (expense) income, net

( 1,761,432 )

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stock dividends

Loss Available to Common Stockholders

$ ( 2,321,503 )

$ ( 1,800,054 )

Net Loss Available to Common Stockholders

$ ( 1,950,831 )

$ ( 2,492,227 )

and diluted loss per share

Average Shares Outstanding

Per-Share Data

Basic and diluted loss per share

Weighted Average Common Shares Outstanding

Basic and diluted

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

Statements of Stockholders’ Equity (Deficit) (Unaudited)

the Three and Nine Months Ended September 30, 2024

Stockholder’s

at January 1, 2024

$ ( 48,558,111 )

$ ( 1,403,241 )

paid in capital from warrants issued under advisory agreement

paid in capital from warrants issued as debt discount

stock issued from agreements

( 2,120,651 )

at March 31, 2024

( 50,678,762 )

( 3,184,454 )

paid in capital from warrants issued under consulting agreement

stock issued from agreements

( 2,917,710 )

at June 30,2024

( 53,596,472 )

( 5,258,382 )

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

Condensed Statements of Stockholders’

Equity (Unaudited)

Stockholder’s

at January 1, 2025

$ ( 56,799,612 )

stock issued from agreements

of restricted stock awards

( 2,278,684 )

Balances at January 1, 2025

$ ( 56,799,612 )

at March 31, 2025

Warrants exercised

Common stock issued from agreements

Stock-based compensation

Additional paid in capital from restricted stock units

( 2,278,684 )

of Series B Preferred Stock to common stock

of common stock pursuant to shelf registration statement

of restricted stock units

( 2,278,684 )

Balances at March 31, 2025

$ ( 59,078,296 )

at June 30, 2025

Balances at January 1, 2026

$ ( 64,600,167 )

stock issued from agreements

of restricted stock units

Warrants exercised

Common stock issued from agreements

Issuance of common stock pursuant to shelf registration statement

Offering costs

Common stock issued under the 2022 Omnibus Securities and Incentive Plan

Stock-based compensation

( 1,761,432 )

at September 30, 2025

Balances at March 31, 2026

$ ( 66,361,599 )

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Statements of Cash Flows (Unaudited)

the Nine Months Ended

Flows from Operating Activities

For the Three Months Ended

Cash Flows from Operating Activities

$ ( 1,761,432 )

$ ( 2,278,684 )

to reconcile net loss to net cash used by operating activities:

of debt discount and issuance cost

for losses on inventory

and amortization

for losses on accounts receivable

on disposal of property and equipment

lease expense

of common stock for non-cash consideration

of warrants for non-cash consideration

in fair value of warrant liabilities

in operating assets and liabilities:

and other current assets

lease liability

non-current assets and liabilities

cash used in operating activities

Adjustments to reconcile net loss to net cash used by operating activities:

Depreciation and amortization

Provisions for losses on accounts receivable

Provisions for losses on inventory

Loss on disposal of property and equipment

Non-cash lease expense

Stock-based compensation

Issuance of common stock for non-cash consideration

Change in fair value of warrant liabilities

Changes in operating assets and liabilities:

Accounts receivable

Prepaids and other current assets

Accounts payable

Accrued expenses

Customer deposits

Operating lease liability

Other non-current liabilities

Net cash used in operating activities

( 1,229,757 )

( 1,603,655 )

Flows from Investing Activities

to property and equipment

cash used in investing activities

Flows from Financing Activities

from issuance of common shares

from exercised warrants

payments on notes payable

from convertible notes, net of fees

cash provided by financing activities

Increase in Cash and Cash Equivalents

and Cash Equivalents at Beginning of Period

and Cash Equivalents at End of Period

Disclosure of Operating Activities

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

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

Cash Flows from Investing Activities

Additions to property and equipment

Net cash used in investing activities

Cash Flows from Financing Activities

Proceeds from issuance of common stock

Proceeds from exercised warrants

Offering costs paid

Principal payments on notes payable

Taxes paid related to net share settlement of restricted stock units

Net cash provided by (used in) financing activities

Net Increase (Decrease) in Cash and Cash Equivalents

( 1,691,500 )

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Period

Supplemental Disclosure of Operating Activities

Cash paid for interest

Cash paid for income taxes

Supplemental Schedule of Non-Cash Investing and Financing Activities

Common stock issued for services

Common stock issued upon cashless exercise of warrants

Share settlement of restricted stock units, net of shares withheld for payment of

payroll taxes

Deferred offering costs reclassified to additional paid in capital upon completion

of stock offering

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

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

The termination agreement allowed the Company to recapture the rights

The termination agreement allowed the Company to recapture its rights

to the trademark (U.S.

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of America (“U.S.

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 U.S.

GAAP”) and following 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

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 31, 2024.

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, 2026, 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

Summary of Significant Accounting Policies

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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

estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

significant accounting estimates or assumptions bear the risk of change due to uncertainties attached to these estimates or assumptions,

and certain estimates or assumptions are difficult to measure or value.

bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial

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The Company uses estimates in accounting for, among other items, revenue recognition, allowance for credit

losses, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of property and equipment,

losses, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, impairment of property and equipment

and intellectual property.

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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).

The Company reclassified $ 366,165 of general and

administrative expenses to selling expenses in the Condensed Statements of Operations for the three months ended March 31, 2025.

Company also reclassified $ 57,311 of general and administrative expenses to research and development expenses in the Condensed Statements

of Operations for the three months ended March 31, 2025.

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

assets, total liabilities or total equity.

Receivable and Allowance for Credit Losses

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judgment based on the best available facts and circumstances to estimate and record an allowance.

The Company estimates credit losses

on accounts receivable by utilizing an aging schedule.

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.

The Company monitors accounts receivable

and estimates the allowance for lifetime expected credit losses.

Estimates of expected credit losses are based on historical collection

experience, aging schedule and other factor, including those related to current and forecasted market conditions and events.

The allowance

for credit losses was $ 7,220 and $ 7,326 as of March 31, 2026 and December 31, 2025, respectively.

The Company recorded no credit loss

expense for the three months ended March 31, 2026 and 2025.

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

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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.

The Company has reserved for expired inventory as charges to cost of goods sold of $ 758 and $ 0

for the three months ended March 31, 2026 and 2025, respectively.

There was no reserve for research devices recorded as charges to research

and development expenses for the three months ended March 31, 2026 and 2025, respectively.

Inventory reserves totaled $ 28,048 and $ 34,524

as of March 31, 2026 and December 31, 2025, respectively.

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

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Advertising expenses are expensed as incurred and amounted to $ 29,821 and $ 85,348 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.

March 31, 2026 and 2025, respectively.

and Development

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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

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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.

The intellectual property is amortized over

its remaining trademark life of approximately nine years.

Value Measurements

Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”).

ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy

gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and

the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy under ASC 820 are described

Company accounts for financial instruments in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value

Measurements and Disclosures , which establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to

measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities

(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy

under ASC 820 are described as follows:

1 – Quoted prices (unadjusted) for identical unrestricted assets or liabilities in active markets that the reporting entity has

the ability to access as of the measurement date.

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;

or financial instruments for which all significant inputs are observable or can be corroborated

by observable market date, either directly or indirectly.

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

prices in markets that are not active or financial instruments for which all significant inputs are observable or can be corroborated

by observable market data, either directly or indirectly.

3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets

or liabilities.

These unobservable inputs reflect that reporting entity’s own assumptions about assumptions that market participants

would use in pricing the asset or liability.

Level 3 assets and liabilities include financial instruments whose value is determined using

pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair

value require significant management judgment or estimation.

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, 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.

Inputs to determine fair value are generally unobservable and typically

reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values

are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

The valuation

techniques involve management’s estimates and judgment based on unobservable inputs.

The fair value estimates may not be indicative

of the amounts that would be realized in a market exchange.

Additionally, there may be inherent uncertainties or changes in the underlying

assumptions used, which could significantly affect the current or future fair value estimates.

Unobservable inputs 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 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.

These unobservable inputs reflect that reporting entity’s own assumptions about what market participants would

use in pricing the asset or liability.

Level 3 assets and liabilities include financial instruments whose value is determined using pricing

models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value require

significant management judgment or estimation.

believes the estimated fair value of certain accounts including cash, accounts receivable, account payable and other current assets

on March 31, 2026, and December 31, 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 and the floating lookback option provision in the Neuraxis, Inc.

Stock Purchase Plan.

Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of

assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based

techniques, including option pricing and discounted cash flow models.

The valuation techniques involve management’s estimates and

judgment based on unobservable inputs.

The fair value estimates may not be indicative of the amounts that would be realized in a market

Additionally, there may be inherent uncertainties or changes in the underlying assumptions used, which could significantly

affect the current or future fair value estimates.

Unobservable inputs 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 three months ended March 31, 2026 and 2025.

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 March

31, 2026 and December 31, 2025.

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 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.

In periods when losses are reported, which is the case for the three month periods ended March 31, 2026 and 2025 presented

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

inclusion would be anti-dilutive.

Preferred stock dividends (neither declared nor paid) were $ 1,215,264 and $ 1,025,865 as of March 31,

2026 and December 31, 2025, respectively.

Company had the following potentially dilutive common stock equivalents:

Schedule of Dilutive Common Stock Equivalents

Warrants for Common Stock

B Preferred Stock

Cumulative Series B Preferred Stock Dividends

Restricted Stock Units

Series B Preferred Stock

Undeclared Cumulative Series B Preferred Stock Dividends

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

$ ( 2,122,796 )

$ ( 1,755,234 )

$ ( 6,091,898 )

$ ( 6,793,596 )

stock dividends

loss available to common stockholders

Three Months Ended

$ ( 1,761,432 )

$ ( 2,278,684 )

Preferred stock dividends

Net loss available to common stockholders

( 1,950,831 )

( 2,492,227 )

average shares of common stock outstanding - basic and diluted

and diluted net loss per share

Weighted average shares of common stock outstanding - basic and diluted

Basic and diluted net loss per share

Company accounts for all stock-based awards at fair value.

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awards is recognized over the requisite service period following the measurement of the fair value on the grant date.

Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options.

The use of the Black-Scholes option-pricing

model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common

stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend

yield of the common stock.

Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options and the Monte Carlo simulation model

to calculate the fair value of the floating lookback option with the Neuraxis, Inc.

2025 Employee Stock Purchase Plan.

The use of these

option-pricing models requires management to make assumptions with respect to the expected term of the option, the expected volatility

of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected

dividend yield of the common stock.

Changes in these assumptions can materially affect the fair value estimate.

accordance with FASB’s ASC 606, Revenue from Contracts with Customers, (“ASC 606”), the Company recognizes revenue

when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects

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:

the contract(s) with a customer;

the performance obligations in the contract;

the transaction price;

the transaction price to the performance obligations in the contract; and

revenue when (or as) the entity satisfies a performance obligation.

accordance with ASC 606, Revenue from Contracts with Customers , the Company recognizes revenue when its customer obtains control

of promised goods or services, in an amount that reflects the consideration which the Company expects 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 (i) identifies the contract(s) with a customer, (ii) identifies the performance obligations in the contract, (iii) determines the

transaction price, (iv) allocates the transaction price to the performance obligations in the contract and (v) recognizes revenue when

(or as) the entity satisfies a performance obligation.

Company applies the five-step model to contracts when it determines that it is probable it will collect substantially all the consideration

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discounts for IB-Stim devices, based upon household income and size.

the Company offers providers an opt-in program to address adequate insurance claim payments on IB-Stim devices.

This program may extend

a rebate or invoice credit where the insurance payment and patient responsibility (i.e., deductible, co-payment, and/or co-insurance

amounts required by the Payer) are less than the acquisition cost of the IB-Stim device.

The Company recognizes revenue at such a time

that collection of the amount due is assured.

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

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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 to healthcare customers 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).

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As such, ownership of goods in

transit is transferred to the customer upon receipt as the Company bears the associated risks (e.g., loss, damage, delay).

transit is transferred to the customer upon receipt as the Company bears the associated risks (e.g., loss, damage or delay).

typically relies on shipping information from common carriers to evaluate when the customer has obtained control of the goods.

and handling costs are recorded as Cost of Goods Sold in the Statements of Operations.

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

Company’s contracts with customers typically do not involve variable consideration.

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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.

Estimated returns totaled $ 33,261 and $ 13,824 as of March 31, 2026 and December 31,

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

of March 31, 2026, the Company had stockholders’ equity of $ 5,747,550 and short-term outstanding borrowings of $ 100,735 .

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.

the Company had cash of $ 7,078,659 and a working capital surplus of $ 5,328,867 as of March 31, 2026.

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

proceeds from the issuance of capital stock.

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

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is deemed to exist about the Company’s ability to continue as a going concern.

As we continue to incur losses, our transition to

profitability is dependent upon achieving a level of revenues adequate to support its cost structure.

As the Company continue to incur losses, the transition

to profitability is dependent upon achieving a level of revenues adequate to support its cost structure.

We may never achieve profitability,

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amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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

Adopted Accounting Standards

July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) , which allows registrants to elect

a practical expedient when estimating expected credit losses on accounts receivable.

Under the practical expedient, an entity may assume

that the current conditions as of the balance sheet date persist for the remaining life of the asset, thereby removing the requirement

to generate forward-looking forecasts.

All entities are required to adopt the standard prospectively for fiscal years beginning after

December 15, 2025, and interim periods within those annual reporting periods.

The Company adopted the provisions of ASU 2025-05 as of

January 1, 2026, on a prospective basis.

The Company did not elect the practical expedient and the adoption of the standard did not have

a material impact on the Company’s financial statements.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires the

enhancement of income tax disclosures to provide better insight into how an entity’s operations and related tax risks, planning

and opportunities affect its tax rate and prospects for future cash flows.

The enhanced disclosures require (i) specific categories in

a tabular rate reconciliation including both amounts and percentages and (ii) additional information for reconciling items and income

tax paid that meet a quantitative threshold.

Public business entities are required to adopt the standard for annual periods beginning

after December 15, 2024.

The Company adopted the disclosure provisions of ASU 2023-09 as of December 31, 2025, on a prospective basis.

The adoption of this standard did not have a material impact on the Company’s financial statements.

Issued Accounting Standards

In December 2025, the FASB issued ASU

2025-11, Interim Reporting (Topic 270), which provides a comprehensive list of interim disclosures that are required by U.S.

to provide clarity on current requirements.

Public business entities are required to adopt the standard for interim periods within annual

reporting periods beginning after December 15, 2027.

The adoption is not expected to have a material impact on the Company’s financial

September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Improvement to the Accounting for Internal-Use Software , which replaces project stage milestones with required capitalization when

management has authorized and committed to funding the software project and it is probably that the project will be completed and the

software will be used to perform the function intended.

Depreciation expense and accumulated depreciation for internal-use software are

also required to be disclosed for all periods presented.

All entities are required to adopt the standard for fiscal years beginning after

December 15, 2027 and interim periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual

reporting period.

The 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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Although the standard requires enhanced disclosures, the adoption is not expected to have a material impact on the Company’s financial

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires the

enhancement of income tax disclosures to provide better insight into how an entity’s operations and related tax risks, planning

and opportunities affect its tax rate and prospects for future cash flows.

The enhanced disclosures require (i) specific categories in

a tabular rate reconciliation including both amounts and percentages and (ii) additional information for reconciling items and income

tax paid that meet a quantitative threshold.

Public business entities are required to adopt the standard for annual periods beginning

after December 15, 2024.

All other entities are required to adopt the standard for annual periods beginning after December 15, 2025.

The adoption of the standard is not expected to have a material impact on the Company’s financial statements.

Related Party Transactions

Company has two demand notes receivable from shareholders related to the sale of common stock on January 1, 2016.

Both notes’ principal

balances are $ 506,400 , with interest calculated monthly based on applicable federal rates.

principal balances are $ 506,400 ,

with interest calculated monthly based on applicable federal rates.

No payments have been received on the notes.

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 September 30, 2025.

Since repayment is

not assured, the Company has fully reserved for the entire balance of principal and interest.

The current allowance is $ 1,250,388

and $1,241,559 as of March 31, 2026 and December 31, 2025, respectively.

The current loan balances are as follows:

Schedule of Related Party Transactions

for collection risk

( 1,012,800 )

March 31, 2026

December 31, 2025

Shareholder 1

Shareholder 2

Principal balance

Allowance for collection risk

( 1,012,800 )

Company has loans payable to shareholders related to funding needs for operations.

The current loan details for all related party loans

are as follows:

Schedule of Related Party Loans payable to shareholder

March 31, 2026

Other Convertibles

December 31, 2025

Other Convertibles

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

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

anatomical structures in human patient.

anatomical structures in human patients.

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

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The Company’s Board of Directors pre-approved the reimbursement of up to $ 20,000 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

License costs totaled $ 453 and $ 1,317 for the three months ended March 31, 2026 and 2025, respectively.

The Company owed the

limited liability company $ 453 and $ 0 that are included in accounts payable in the Condensed Balance Sheets as of March 31, 2026 and

December 31, 2025, respectively.

time to time, a member of the Company’s Board of Directors purchases NeuroStim 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.

The Company’s Board of Directors pre-approved the sale of these NeuroStim devices up to $ 20,000 for

the year ended December 31, 2026.

The Company sold NeuroStim devices totaling $ 1,515 and $ 1,957 for the three months ended March 31,

2026 and 2025, respectively, under this program.

Prepaids and Other Current Assets

1 unchanged sentence

Schedule of Prepaids and Other Current Assets

software subscriptions

prepaids and other current assets

March 31, 2026

December 31, 2025

Prepaid insurance

Prepaid software subscriptions

Total prepaids and other current assets

Other Non-Current Assets

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Schedule of Other Non-Current Assets

September 30,

Deferred offering costs

Prepaid software subscription

Security deposit

Total other non - current assets

offering costs

software subscriptions

other non-current assets

Accrued Expenses

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Schedule of Accrued Expenses

Bridge Lease Termination Fee

accrued expenses

March 31, 2026

December 31, 2025

Compensation and benefits

Settled litigation

NSS-2 Bridge lease termination fee

Research and development fees

Total accrued expenses

Notes Payable

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

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

shares of Series B Convertible Preferred Stock, par value $ 0.001 per share (the “Series B Preferred Stock”), for an aggregate

purchase price of $ 3,000,000 paid in 15 monthly installments of $ 200,000 each, commencing on the later of January 10, 2024 or a date

after stockholder approval of an amendment to the Company’s Certificate of Incorporation to authorize the creation of the Series

B Preferred Stock.

The Series B Preferred Stock was convertible at any time into shares of common stock of the Company without any further

consideration.

Following the issuance of the Series B Preferred Stock, it would rank senior to the common stock with respect to payments

upon the liquidation, dissolution and winding up of the Company.

Due to a delay in the stockholder approval, the Company amended the

SPA on February 12, 2024 to issue a convertible promissory note, due and payable on the earlier of 15 months or 12 months if the Series

B Preferred Stock has not been authorized, convertible into Series B Convertible Preferred Stock with identical funding amounts and terms

(the “$ 3,000,000 Convertible Promissory Note”).

The shareholder funded $ 800,000 of the $ 3,000,000 commitment in 2024.

Company then proceeded to enter into a series of incremental convertible promissory notes with other investors totaling $ 1,135,000 with

terms identical to the $ 3,000,000 Convertible Promissory Note (collectively referred to as the “Original 2024 Convertible Promissory

Notes”) for an aggregate principal amount of $ 1,935,000 .

2024 Original Convertible Promissory Notes earned interest at 8.5 % per annum payable quarterly in either cash or common stock at the

election of the Company.

At any time following the date of shareholder approval to authorize the creation of Series B Preferred Stock

prior to the maturity date, the investor may elect to convert all or part of the principal into the Company’s Series B Preferred

Stock at a conversion price per share equal to $ 2.38 .

Without limiting the foregoing, all principal amounts outstanding on the maturity

date will automatically convert into the Company’s Series B Preferred Stock.

The Series B Preferred Stock is entitled to cumulative

dividends at 8.5 % per annum (whether or not declared) payable quarterly in either cash or common stock at the $ 2.38 conversion price

at the election of the Company.

Upon conversion to Series B Preferred Stock, the investor may elect, at its option at any time, to convert

all or part of the Series B Preferred Stock plus accrued but unpaid dividends into an equivalent amount of common stock at the $ 2.38

conversion price.

Subsequently,

the Company entered into three convertible promissory notes with related institutional accredited investors with terms similar to the

Original 2024 Convertible Promissory Notes (collectively referred to as the “Amended 2024 Convertible Promissory Notes”)

for an additional principal amount of $ 3,000,000 .

Certain provisions to the SPA and Certificate of Designation previously issued on February

12, 2024 changed, including (i) the number of shares of preferred stock to be designated as Series B Preferred Stock was increased to

4,000,000 shares, (ii) the stated value of the Series B Preferred Stock was changed to $ 2.38 per share, (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 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.

maturity date was on the earlier of (i) June 21, 2025, (ii) upon written demand occurring on or after March 21, 2025 in the event that

the Series B Preferred Stock has not been duly authorized on or before such date, or (iii) immediately upon the occurrence of an event

Automatic conversion into shares of Series B Preferred Stock (at a conversion price of $ 2.38 per share) would occur following

the date of shareholder approval.

In the event the Company failed to obtain shareholder approval before August 15, 2024, rights existed

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

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 resulting in an effective interest rate of 12.5 %.

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

Pursuant to the terms of 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 on August 15, 2024.

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.

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.

August 9, 2025, the Company entered into a $ 170,000 note payable to finance the premiums of a business insurance policy, bearing interest

at an annual interest rate of 7.45 % and maturing on June 9, 2026 , to replace the $ 210,000 note payable 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 note payable with a principal balance of $ 122,253 to finance subscription fees on certain software arrangements

maturing on March 1, 2027.

The outstanding principal was $ 100,735 and $ 148,293 as of March 31, 2026 and December 31, 2025, respectively.

expense totaled $ 26,189 and $ 2,237 for the three months ended March 31, 2026 and 2025, respectively.

The Company’s accrued interest

totaled $ 66,648 as of March 31, 2026 and December 31, 2025.

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

3 unchanged sentences

Operating leases are recorded as operating lease

right-of-use assets, other current liabilities, and operating lease liabilities in the Balance Sheets.

The Company did not have any finance

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

right-of-use assets, other current liabilities, and operating lease liabilities in the Condensed Balance Sheets.

The Company did not

have any finance leases at March 31, 2026 and December 31, 2025.

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 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

The current monthly lease payment is $ 2,000 with no escalations during the initial lease term.

On June 13, 2025, the Company

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

The lease in Carmel, Indiana

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

The monthly lease payment started at $ 6,721 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 $ 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

Company recognized operating lease expense of $ 26,116 and $ 25,523 for the three months ended March 31, 2026 and 2025, respectively, including

short-term lease expense and variable lease costs.

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

Schedule of Operating Leases

lease right-of-use assets

current liabilities

lease liabilities

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:

Operating lease right of use asset, net

Current portion of operating lease payable

Operating lease payable, net of current portion

Total operating lease payable

Weighted-average remaining lease term (in years)

Weighted-average discount rate

of March 31, 2026, the maturities of the Company’s operating lease liabilities were as follows:

Schedule of Maturities Operating Lease Liabilities

lease payments

Remainder of 2026

Total lease payments

imputed interest

present value of lease payments

Total present value of lease payments

Common Stock and Warrants

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

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

Company has authorized 100,000,000

shares of common stock, of which 11,450,045

and 10,652,812

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

stock warrants for gross proceeds of $ 1,002,962 .

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

B Preferred Stock.

January 17, 2025, the Company issued (i) 39,471 shares of common stock with a fair value of $ 112,493 to its Board of Directors for their

service from April 1, 2024 through December 31, 2024, which was recorded as general and administrative expense in the Condensed Statements

of Operations and (ii) 186,166 shares of common stock to an investor in exchange for 502,647 warrants in a cashless exercise transaction

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

note dispute with a fair value of $ 230,823 , (ii) 90,032 shares of common stock to pre-IPO Series A Preferred Stock shareholders to settle

certain claims with a fair value of $ 286,458 , (iii) 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, (iv) 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 with a fair value of $ 67,672 , (v) 25,832 shares

of common stock to its previous Chief Financial Officer in accordance with a severance agreement at a fair value of $ 78,788 and (vi)

20,000 shares of common stock to it previous Chief Financial Officer for services provided during the IPO with a fair value of $ 55,600 .

the three months ended March 31, 2024, the Company issued (i) 11,000 shares of common stock upon the exercise of warrants for $ 26,180 ,

(ii) 75,000 shares of common stock as payment to a vendor for services with a fair value of $ 200,250 pursuant to a consulting agreement

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

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

shares were issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.

January 22, 2026, the Company issued 43,196 shares of common stock with a fair value of $ 199,995 to its Board of Directors for their

services for the year ending December 31, 2026.

The Company recorded $ 50,000 as general and administrative expense in the Condensed Statements

of Operations for the three months ended March 31, 2026 and $ 149,995 as prepaids and other current assets in the Condensed Balance Sheet

as of March 31, 2026.

January 22, 2026, the Company issued another 43,196 shares of common stock with a fair value of $ 200,000 to its Board of Directors for

their service during the year ended December 31, 2025.

The Company recorded $ 50,000 as general and administrative expense in the Condensed

Statements of Operations for the three months ended March 31, 2025.

the three months ended March 31, 2026, pursuant to the August 2025 At The Market Offering Agreement, the Company issued 495,456 shares

of common stock to investors for gross proceeds of $ 2,990,361 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, 2025.

Additionally,

during the three months ended March 31, 2026, the Company issued (i) 213,040 common shares upon the exercise of warrants and (ii) 2,345

common shares pursuant to the 2022 Omnibus Securities and Incentive Plan.

the three months ended March 31, 2025, the Company issued (i) 39,471 shares of common stock with a fair value of $ 112,493 to its Board

of Directors for their service from April 1, 2024 through December 31, 2024, which was recorded as general and administrative expense

in the Condensed Statements of Operations and (ii) 186,166 shares of common stock to an investor in exchange for 502,647 warrants in

a cashless exercise transaction with $ 186 reclassified from additional paid in capital to common stock in the Condensed Statements of

Stockholders’ Equity.

following is a summary of warrant activity for common stock during the three months ended March 31, 2026 and year ended December 31,

Schedule of Warrant Activity for Common Stock

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Weighted-Avg.

as of January 1, 2024

as of December 31, 2024

Contractual Life

Outstanding as of January 1, 2025

( 1,263,006 )

as of September 30, 2025

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

Outstanding as of December 31, 2025

Outstanding as of March 31, 2026

following table summarizes the Company’s warrants outstanding and exercisable as of March 31, 2026:

Schedule of Warrants outstanding and Exercisable

Investor Warrant

September 18, 2028

2022 Convertible Notes

Various in 2027

2023 Convertible Notes

Agreement Warrants

Various in 2028

Underwriter Warrants

August 8, 2028

Advisory Agreement Warrants

Various in 2029

Preferred Stock

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 3,896,907

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.

Company’s shareholders authorized 5,000,000 shares of preferred stock of which 5,000,000 shares were designated as $ 0.001 par value

Series B Preferred Stock with 3,796,907 shares issued and outstanding as of March 31, 2026 and December 31, 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

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

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,

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

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 events.

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

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.

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

B Preferred Stock.

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

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

December 31, 2026.

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.

any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the Series B Preferred Stock shareholders

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event, thereby triggering payment of the liquidation preferences.

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

of March 31, 2026 and December 31, 2025, there were no preferred stock dividends declared or 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.

cumulative dividends totaled $ 1,215,264 and $ 1,025,865 as of March 31, 2026 and December 31, 2025, respectively.

Stock-Based Compensation

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2022 Omnibus Securities and Incentive Plan, the Company initiated grants of restricted stock units (“RSUs”)

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

to certain employees as follows:

Schedule of Restricted Stock Units

Average Fair Value

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.

Dividend equivalents accrue on RSUs and are paid upon vesting;

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.

Three Months Ended March 31,

Number of RSUs

Weighted Average Fair Value

Number of RSUs

Weighted Average Fair Value

Outstanding as of Beginning of Period

Outstanding as of End of Period

RSUs granted during the three months ended March 31, 2026 are subject to a pro rata annual vesting period over 3 years whereas the RSUs

granted during the three months ended March 31, 2025 are subject to a three-year cliff vesting period.

The RSUs are payable in shares

of the Company’s common stock and 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 March 31, 2026.

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 $ 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 September 30, 2025 and December 31, 2024:

administrative expense and amounted to $ 329,434 and $ 105,811 for the three months ended March 31, 2026 and 2025, respectively.

March 31, 2026, total unrecognized stock-compensation expense relating to unvested stock awards granted under the Company’s share-based

compensation plans amounted to $ 2,864,172 .

following is a summary of the Company’s outstanding stock options as of March 31, 2026 and December 31, 2025:

Schedule of Stock Option Activity

Number of Options

Weighted Avg.

Remaining Contractual Life (in years)

Weighted Avg.

Exercise Price

as of December 31, 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.

Aggregate Intrinsic Value

Outstanding as of December 31, 2025

Outstanding as of March 31, 2026

Vested and Exercisable as of March 31, 2026

was no stock-based compensation expense related to stock options recorded for the three months ended March 31, 2026 and 2025.

Stock Purchase Plan

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.

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.

Total stock-based compensation expense includes $ 37,329

relating to the ESPP for the three months ended March 31, 2026 and 2025, respectively.

Employee withholdings of $96,604 and $13,611

are included in accounts payable in the Condensed Balance Sheets as of March 31, 2026 and December 31, 2025,

respectively.

Warrant Liabilities

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

Company has evaluated financial instruments arising from warrants that are issued and outstanding as of March 31, 2026 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

maturity of the each warrant, (iii) estimated volatility ranging from 89.1 % to 94.7 % 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 nine months ended September 30, 2025 and the year ended December

following are the changes in the warrant liabilities during the three months ended March 31, 2026 and year ended December 31, 2025:

Schedule of Changes in Warrant Liabilities

liabilities as of January 1, 2024

in fair value of warrant liabilities

liabilities as of December 31, 2024

in fair value of warrant liabilities

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.

Warrant liabilities as of January 1, 2025

Changes in fair value of warrant liabilities

Warrant liabilities as of December 31, 2025

Changes in fair value of warrant liabilities

Warrant liabilities as of March 31, 2026

Segment Information

Company evaluates the following factors to identify its reportable segments:

(i) nature of products and services, (ii) type of

customer for the products and services, (iii) sales, production and distribution methods of the products and services and (iv) the

nature of the regulatory environment, if applicable.

Based on an evaluation of these factors, management concluded that the

Company’s operations are managed through one reportable segment, IB-STIM, that derives its revenues in the United States from

a PENFS device that is used to treat patients 8-21 years of age with functional abdominal pain associated with irritable bowel

The accounting policies of the IB-STIM segment are the same as those described in the Summary of Significant Accounting

Policies (see Footnote 2).

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.

(i) nature of products and services, (ii) type of customer

for the products and services, (iii) sales, production and distribution methods of the products and services and (iv) the nature of the

regulatory environment, if applicable.

Based on an evaluation of these factors, management concluded that the Company’s operations

are managed through one reportable segment, IB-STIM, that derives its revenues in the United States from a PENFS device that is used

to treat patients 8-21 years of age with functional 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.

The accounting policies of the

IB-STIM segment are the same as those described in the Summary of Significant Accounting Policies (see Footnote 2).

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 Chief Executive Officer.

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

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)

Operating Loss

( 2,100,085 )

( 1,651,273 )

( 6,113,040 )

( 5,690,225 )

in Fair Value of Warrant Liability

of Debt Discount and Issuance Cost

Other (Expense) Income, Net

( 1,103,371 )

Three months ended March 31,

Selling Expenses (a)

Research & Development (a)

Compensation and Benefits (a)

Professional Services (a)

Legal Settlement

Other Operating Expenses (a) (b)

Segment Operating Loss

( 1,740,679 )

( 2,295,098 )

Interest Expense

Change in Fair Value of Warrant Liability

Total Other (Expense) Income, Net

$ ( 1,761,432 )

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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.

operating expenses include rent and utilities, insurance, travel, software subscription

fees, board fees and bad debt expense.

segment assets for IB-STIM amounted to $ 8,745,706 and $ 6,404,036 as of March 31, 2026 and December 31, 2025, respectively.

Total segment

capital expenditures for IB-STIM amounted to $ 0 and $ 18,000 for the three months ended March 31, 2026 and 2025, respectively.

Total segment

depreciation and amortization amounted to $ 16,317 and $ 6,356 for the three months ended March 31, 2026 and 2025, respectively.

segment non-cash charges settled in common stock include (i) consulting and advisory fees totaling $ 399,995 and $ 112,493 for the three

months ended March 31, 2026 and 2025, respectively, and (ii) hiring grants totaling $ 5,534 and $ 0 for the three months ended March 31,

2026 and 2025, 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 $ 5,000,000 , pre-judgment interest, punitive damages, attorney’s fees, court costs and designation

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

of the case as a class action.

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disputes in both cases through an independent third-party mediator.

April 25, 2025, the parties reached a tentative $ 750,000 settlement payable in 12 equal monthly installments beginning in January of

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 $ 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.

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

April 25, 2025, the parties reached a $ 750,000 settlement payable in 12 equal monthly installments that began in January of 2026.

Company recorded a charge of $ 619,097 classified as general and administrative expense in the Condensed Statements of Operations during

the three months ended March 31, 2025, while interest expense was recorded as incurred.

As of March 31, 2026, the Company maintained

a liability of $ 528,799 classified as accrued expenses in the Condensed Balance Sheets.

Commitments and Contingencies

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Services Agreement

Company is party to a manufacturing services agreement for the manufacture and supply of the Company’s IB-STIM device based on

the Company’s product specifications that automatically renews annually unless either party provides a written termination notice

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

The Company provides the necessary equipment to the manufacturer

and retains ownership.

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

Performance under

the agreement is initiated by orders issued by the Company and accepted by the manufacturer.

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

and public securities market services for one year.

The advisory agreement included a monthly fee of $ 30,000 and 7,563 common stock warrants

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

On December 31, 2024, the Company and the financial advisor

terminated the advisory agreement subject to the cancelation of 30,252 common stock warrants issued after July 2024 and the payment for

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

Company is party to two separate manufacturing services agreements for the manufacture and supply of the Company’s IB-Stim and

RED devices based on the Company’s product specifications that expire in March and August, 2027, respectively, and automatically

renew annually unless either party provides a written termination notice to the other party within 180 days prior to the end of the then-current

The Company’s IB-Stim and RED devices are manufactured in Indiana and Michigan, respectively.

The Company provides the necessary

equipment to the manufacturers and retains ownership.

The manufacturers bear the risk of loss of and damage to the equipment and consigned

Performance under the agreement is initiated by orders issued by the Company and accepted by the manufacturers.

also entered into quality agreements with the manufacturers to perform quality assurance services on product provided by the Company.

Employment Agreements

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improve shareholder value and to contribute to the growth and financial success of the Company.

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 .

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

These key employees have a provision in their

agreements whereas the Company will pay a special bonus equal to the aggregate of the strike price or exercise price of all their stock

options plus a tax gross-up payment.

The special bonus shall be paid in twenty percent ( 20 %) installments starting January 2, 2024, and

the same date each of the next four years.

As a condition of the payment, the key employee must exercise at least 20 % of their stated

number of stock options.

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 .

are nine key employees and two non-employees that have stock options of the Company totaling 1,319,394 shares.

These key employees have

a provision in their agreements whereas the Company will pay a special bonus equal to the aggregate of the strike price or exercise price

of all their stock options plus a tax gross-up payment.

The special bonus shall be paid in twenty percent ( 20 %) installments starting

January 2, 2024, and the same date each of the next four years.

As a condition of the payment, the key employee must exercise at least

20 % of their stated number of stock options.

There are additional provisions to cover termination and change of control events.

of the key employees have exercised any of the stock options as of March 31, 2026.

April 2023, the Company amended the employee agreements to, among other things, clarify that the special one-time incentive payment and

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

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.

Pursuant to the employment agreement, the

Company (i) made salary continuation payments based on an annual salary of $ 275,000 through October 10, 2024, (ii) issued 25,832 shares

of common stock at a fair value of $ 78,788 and (iii) made a $ 41,980 one-time payment in lieu of the exercise of 13,764 stock options

that expired on January 2, 2024.

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

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.

Company recorded the fair value of the stock options totaling $ 5,610,234 as compensation cost on the grant date.

In addition, a $ 6,225,169

incremental tax gross up payment is contingent upon the employees exercising their deferred bonus provision which will be recorded when

time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business.

As of the date of issuance, other than those described above (see Footnote 14), there were no pending or threatened legal proceedings

that could reasonably be expected to have a material effect on the results of the Company’s operations.

As of the date of issuance, other than those described below and in note 13, there were no pending or threatened legal proceedings that

could reasonably be expected to have a material effect on the results of the Company’s operations.

There are also no proceedings

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Subsequent Events

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

April 1, 2026, the Company issued 43,885 shares of common stock to eligible employees pursuant to the NeurAxis, Inc.

2025 Employee Stock

Purchase Plan effective as of July 1, 2025 and subject to shareholder approval by July 1, 2026.

April 9, 2026, the Company’s Board of Directors approved the cancelation of 1,319,394 stock options issued under the 2017 Innovative

Health Solutions, Inc.

2017 Stock Compensation Plan and the grant of an equivalent amount of RSUs with immediate vesting under the NeurAxis,

2022 Omnibus Securities and Incentive Plan, subject to shareholder approval.

The stock option cancelation and RSU grant will be

treated as a modification under ASC 718, Compensation—Stock Compensation , whereby the Company will recognize incremental

compensation cost as the excess of the fair value of the granted RSUs over the fair value of the stock options immediately before the

The Company estimates $ 4,250,000 of incremental compensation cost will be recorded upon approval of the exchange by the shareholders.

April 10, 2026, the Company’s Board of Directors declared a dividend on the Series B Preferred Stock.

Holders of record of the

Company’s Series B Preferred Stock as the record date of April 21, 2026, received a stock dividend on April 28, 2026, of the Company’s

par value $ 0.001 Common Stock for every share of Series B Preferred Stock.

The Company issued 510,605 shares of Common Stock based on

the 8.5 % per annum cumulative dividend rate.

April 22, 2026, the Company granted 40,000

RSUs to an employee and issued 27,483 shares of common stock, net of taxes, upon vesting.

May 7, 2026, the Company issued 72,282 shares of common stock to an investor upon conversion of an equivalent amount

of Series B Preferred Stock.

April and May of 2026, pursuant to the August 2025 At The Market Offering Agreement with Craig-Hallum Capital Group LLC, the Company

issued 242,255

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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.

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, October 23, 2025, and April 21,

April and May of 2026, the Company issued 37,850

shares of common stock upon exercise of an equivalent amount of common stock warrants for gross proceeds of $ 90,083 .

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