NeurAxis (NRXS) Q1 2026: revenue surges, but going-concern risk remains
NeurAxis, Inc. reported strong top-line growth but continued losses in its quarter ended March 31, 2026. Net sales rose to $1,607,883 from $895,655 a year earlier as adoption of its IB-Stim neuromodulation device increased following a Category I CPT code and broader insurance coverage. Gross margin improved to 86.4%, but the company still posted a net loss of $1,761,432, though smaller than the prior-year loss of $2,278,684.
Cash and cash equivalents increased to $7,078,659 and working capital to $5,328,867, helped by $2,990,361 of common stock sales under an at-the-market program and warrant exercises. Stockholders’ equity was $5,747,550. Despite these improvements, management and auditors concluded that substantial doubt exists about NeurAxis’s ability to continue as a going concern, given ongoing operating losses and reliance on future capital raises and wider insurance coverage.
The company carries Series B preferred stock with cumulative undeclared dividends of $1,215,264 and maintains warrant liabilities of $48,306. It also continues to remediate material weaknesses in internal control over financial reporting and is making installment payments on a $750,000 litigation settlement.
Positive
- Strong revenue growth and margin expansion: Net sales increased to $1.61 million from $0.90 million year over year, while gross margin rose to 86.4%, reflecting higher IB-Stim volumes and a favorable payer mix following the Category I CPT code.
Negative
- Going-concern and control weaknesses: Despite higher sales and $7.08 million of cash, the company continues to incur losses, faces substantial doubt about its ability to continue as a going concern, and reports material weaknesses in internal control over financial reporting.
- Ongoing reliance on external financing: Operating cash outflows of $1.23 million were covered by $2.99 million of at-the-market equity issuance and $0.51 million of warrant exercise proceeds, highlighting dependence on capital markets rather than internally generated cash.
Insights
Rapid revenue growth is offset by ongoing losses, going-concern risk, and equity dependence.
NeurAxis nearly doubled quarterly net sales to $1,607,883 while lifting gross margin to 86.4%, showing strong demand for its IB-Stim device after the Category I CPT code and broader insurance coverage. Operating loss narrowed to $1,740,679, indicating improving operating leverage.
However, the business still generated a net loss of $1,761,432 and used $1,229,757 of cash in operating activities for the quarter. Liquidity was strengthened mainly by external financing: an at-the-market stock offering raised $2,990,361 and warrant exercises added $507,035. This signals continued reliance on capital markets rather than self-funding operations.
Management and auditors determined that substantial doubt exists about the company’s ability to continue as a going concern, despite cash of $7,078,659, working capital of $5,328,867, and equity of $5,747,550 as of March 31, 2026. Material weaknesses in internal controls and ongoing obligations, including a $528,799 remaining litigation settlement liability and $1,215,264 in cumulative preferred dividends, further complicate the risk profile. Future disclosures in periodic filings will clarify how quickly revenue growth and insurance adoption translate into sustainable cash generation.
Key Figures
Key Terms
Category I CPT code financial
going concern financial
warrant liabilities financial
material weaknesses financial
Employee Stock Purchase Plan financial
fair value measurements financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
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For the transition period from ________________ to ________________
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by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
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The
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TABLE OF CONTENTS
| PART I | 3 | |
| ITEM 1: | FINANCIAL STATEMENTS | 3 |
| Condensed Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 | 3 | |
| Condensed Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 4 | |
| Condensed Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 5 | |
| Condensed Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 6 | |
| Notes to Condensed Financial Statements (Unaudited) | 7 | |
| ITEM 2: | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION | 23 |
| ITEM 3: | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK | 26 |
| ITEM 4: | CONTROLS AND PROCEDURES | 27 |
| PART II | 28 | |
| ITEM 1: | LEGAL PROCEEDINGS | 28 |
| ITEM 1A: | RISK FACTORS | 29 |
| ITEM 2: | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 29 |
| ITEM 3: | DEFAULTS UPON SENIOR SECURITIES | 29 |
| ITEM 4: | MINE SAFETY DISCLOSURES | 29 |
| ITEM 5: | OTHER INFORMATION | 29 |
| ITEM 6: | EXHIBITS | 29 |
| SIGNATURES | 30 | |
| 2 |
PART I
ITEM 1. FINANCIAL STATEMENTS
NeurAxis, Inc.
Condensed Balance Sheets
March 31, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of credit losses of $ | ||||||||
| Inventories, net of reserves of $ | ||||||||
| 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 | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Current portion of operating lease payable | ||||||||
| Notes payable | ||||||||
| Customer deposits | ||||||||
| Warrant liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-Current Liabilities: | ||||||||
| 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, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements
| 3 |
NeurAxis, Inc.
Condensed Statements of Operations (Unaudited)
| 2026 | 2025 | |||||||
For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net Sales | $ | $ | ||||||
| Cost of Goods Sold | ||||||||
| Gross Profit | ||||||||
| Selling Expenses | ||||||||
| Research and Development | ||||||||
| General and Administrative | ||||||||
| Operating Loss | ( | ) | ( | ) | ||||
| Other Income (Expense): | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Change in fair value of warrant liability | ( | ) | ||||||
| Other income | ||||||||
| Total other (expense) income, net | ( | ) | ||||||
| Net Loss | ( | ) | ( | ) | ||||
| Preferred stock dividends | ( | ) | ( | ) | ||||
| Net Loss Available to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Per-Share Data | ||||||||
| Basic and diluted loss per share | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Common Shares Outstanding | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements
| 4 |
NeurAxis, Inc.
Condensed Statements of Stockholders’ Equity (Unaudited)
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Convertible Series B Preferred Stock |
Common Stock | Additional Paid In |
Accumulated | Stockholder’s |
||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balances at January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | | ||||||||||||||||||||
| Warrants exercised | - | - | ( | ) | - | - | ||||||||||||||||||||||
| Common stock issued from agreements | - | - | - | |||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Additional paid in capital from restricted stock units | - | - | - | - | - | |||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balances at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balances at January 1, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | ||||||||||||||||||||||
| 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 | - | - | - | - | - | |||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balances at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements
| 5 |
NeurAxis, Inc.
Condensed Statements of Cash Flows (Unaudited)
| 2026 | 2025 | |||||||
For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| 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 | ( | ) | ||||||
| Inventory | ||||||||
| Prepaids and other current assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ||||||||
| Customer deposits | ||||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Other non-current liabilities | — | |||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| 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 | ( | ) | ||||||
| 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 | — | |||||||
The accompanying notes are an integral part of these unaudited condensed financial statements
| 6 |
1. Basis of Presentation, Organization and Other Matters
NeurAxis, Inc. (“we,” “us,” the “Company,” or “NeurAxis”) was established in 2011 and incorporated in the state of Indiana in 2012 under the name of Innovative Health Solutions, Inc. The name was changed to NeurAxis, Inc. in 2022 when the Company filed a Certificate of Conversion and became a Delaware corporation.
The Company is headquartered in Carmel, Indiana, and specializes in the development, production, and sale of medical neuromodulation devices. The Company has developed four FDA cleared products: (i) the IB-STIM (DEN180057, 2019), (ii) the Rectal Expulsion Device (“RED”) (K242304,2024), (iii) the NSS-2 Bridge (DEN170018, 2017) and (iv) the original 510(K) clearance (K140530, 2014).
| ● | The 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. | |
| ● | RED is indicated to evaluate the neuromuscular function of a patient’s ability to expel its contents from the rectum and as a qualitative test for rectal hypersensitivity patients who experience desire or urge to defecate at lower volumes of distention. RED is intended to be used in a clinical setting by trained health care providers in adult populations. | |
| ● | The
NSS-2 Bridge is a percutaneous nerve field stimulator (PNFS) device indicated for use in the reduction of the symptoms of opioid
withdrawal and was licensed to Masimo Corporation (“Masimo”). Masimo marketed and sold this product as its Masimo Bridge.
On July 1, 2025, the Company terminated the NSS-2 Bridge license with Masimo in exchange for $ | |
| ● | The original 510(K) device was an Electroacupuncture Device (“EAD”), now called NeuroStim. The EAD is no longer being manufactured, sold or distributed but reserved only for research purposes. |
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“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 U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments which are necessary for a fair presentation of the Company’s financial information. These unaudited interim results are not necessarily indicative of the results to be expected for the year ending December 31, 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 31, 2025.
| 7 |
2. Summary of Significant Accounting Policies
Use of Estimates and Critical Accounting Estimates and Assumptions
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
These 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.
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. 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, impairment of property and equipment and intellectual property. Actual results could differ from those estimates.
Reclassification of Prior Year Amounts
Certain
prior year amounts have been reclassified to conform to current period presentation. The Company reclassified $
Accounts Receivable and Allowance for Credit Losses
Trade
accounts receivable is stated at the amount management expects to collect from outstanding balances, net of an allowance for credit losses.
Management evaluates many factors when determining the collectability of specific customer accounts, including, but not limited to, creditworthiness,
past transaction and payment history, current economic industry trends and changes in payment terms. Management used assumptions and
judgment based on the best available facts and circumstances to estimate and record an allowance. 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 $
Inventories
Inventories
are valued at the lower of cost or net realizable value. Cost is determined using the weighted average method. The inventory is comprised
of finished medical devices on hand. Certain components within the devices have an expiration date that are removed from current inventory
and expensed at the date of expiration. The Company has reserved for expired inventory as charges to cost of goods sold of $
| 8 |
Selling Expenses
Selling
expenses consist primarily of advertising, marketing and promotion of the Company’s products including salaries and related personnel
costs and travel expenses. Advertising expenses are expensed as incurred and amounted to $
Research and Development
Research and development expenses consist primarily of clinical research studies, new product development, costs of materials and supplies used in research and development activities and salaries and related personnel costs for employees engaged in research and development activities to have our IB-Stim and RED devices cleared by the FDA for other indications. Research and development costs are expensed as incurred.
Intangible Assets
Intangible assets consist of software, patents, a trademark and a license. Intangible assets are stated at their historical cost and amortized on a straight-line basis over their expected useful lives. Capitalized patent costs, net of accumulated amortization, includes legal costs incurred for patent applications. In accordance with ASC 350, once a patent is granted, we amortize the capitalized patent costs over the remaining life of the patent using the straight-line method. If the patent is not granted, we write off any capitalized patent costs at that time.
The
Company purchased a trademark related to the Company’s name for $
On
July 1, 2025, the Company terminated the NSS-2 Bridge license with Masimo in exchange for $
Fair Value Measurements
The 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:
Level 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.
Level 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.
Level 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 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.
Management 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.
| 9 |
The Company’s Level 3 accounts include warrant liabilities and the floating lookback option provision in the Neuraxis, Inc. Employee 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 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.
There 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.
Basic and Diluted Net Income (Loss) per Share
Basic
earnings or loss per share (“EPS”) is computed by dividing net income (loss), net of preferred stock dividends, by the weighted
average number of common shares outstanding during the period. Diluted EPS is determined using the weighted average number of common
shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents that were outstanding for the periods
presented. 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 $
The Company had the following potentially dilutive common stock equivalents:
Schedule of Dilutive Common Stock Equivalents
| 2026 | 2025 | |||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Options | ||||||||
| Restricted Stock Units | ||||||||
| Warrants | ||||||||
| Series B Preferred Stock | ||||||||
| Undeclared Cumulative Series B Preferred Stock Dividends | ||||||||
| Totals | ||||||||
The 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
| 2026 | 2025 | |||||||
Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Numerator: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Preferred stock dividends | ( | ) | ( | ) | ||||
| Net loss available to common stockholders | ( | ) | ( | ) | ||||
| Denominator: | ||||||||
| Weighted average shares of common stock outstanding - basic and diluted | ||||||||
| Basic and diluted net loss per share | $ | ( | ) | $ | ( | ) | ||
| 10 |
Stock-Based Compensation
The Company accounts for all stock-based awards at fair value. The Company recognizes its stock-based compensation expense using the straight-line method. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon actual forfeiture.
The Company accounts for the granting of stock options and restricted stock units to employees and non-employees using the fair value method whereby all awards are measured at fair value on the date of the grant. The fair value of all employee stock options and restricted stock units is expensed over the requisite service period with a corresponding increase to additional paid-in capital. Upon exercise of stock options, the consideration paid by the option holder is recorded in additional paid-in capital, while the par value of the shares received is reclassified from additional paid-in-capital to common stock. Upon vesting of restricted stock units, the par value of the shares issued are reclassified from additional paid-in-capital to common stock.
Stock-based awards to non-employees are measured based on the fair value of the equity instrument issued. Compensation expense for non-employee stock awards is recognized over the requisite service period following the measurement of the fair value on the grant date.
The 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.
Revenue Recognition
In 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.
The Company applies the five-step model to contracts when it determines that it is probable it will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price, after consideration of variability and constraints, if any, that is allocated to the respective performance obligation when the performance obligation is satisfied.
The Company offers a patient assistance program for patients without insurance coverage for IB-Stim. This program extends potential self-pay discounts for IB-Stim devices, based upon household income and size.
Certain economic factors affect the nature, amount, timing, and uncertainty of the Company’s revenue and cash flows. All of the Company’s products are sold to healthcare customers including hospitals, clinics and physician offices. 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).
| 11 |
The Company typically satisfies its performance obligations for goods at a point in time as they are received at the customer’s destination (rather than over time). Goods are shipped by common carrier to customers under FOB destination terms. 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 or delay). Management typically relies on shipping information from common carriers to evaluate when the customer has obtained control of the goods. Shipping and handling costs are recorded as cost of goods sold in the Condensed Statements of Operations.
The Company’s contracts with customers typically do not involve variable consideration. The information that the Company uses to determine the transaction price for a contract is similar to the information that the Company’s management uses in establishing the prices of goods to be sold.
Orders may not be cancelled after shipment. Customers may return devices within 10 days of delivery if the goods are found to be defective, nonconforming, or otherwise do not meet the stated technical specifications. At the option of the customer, the Company shall either:
| ● | Refund the price paid for any defective or nonconforming products. | |
| ● | Supply and deliver to the customer replacement conforming products. | |
| ● | Reimburse the customer for the cost of repairing any defective or nonconforming products. |
At
the time revenue is recognized, the Company estimates expected returns and excludes those amounts from revenue. The Company also maintains
appropriate accounts to reflect the effects of expected returns on the Company’s financial position and periodically adjusts those
accounts to reflect its actual return experience. Estimated returns totaled $
Payment for goods sold by the Company is typically due after an invoice is sent to the customer, within 30 days. The Company does not offer discounts if the customer pays some or all of an invoiced amount prior to the due date. None of the Company’s contracts have a significant financing component.
Medical devices that the Company contracts to sell and transfer to customers are manufactured by two third-party manufacturers located in Indiana and Michigan. In no case does the Company act as an agent (i.e., the Company does not provide a service of arranging for another party to transfer goods to the customer).
Going Concern
As
of March 31, 2026, the Company had stockholders’ equity of $
Our future capital requirements will depend upon many factors, including progress with developing, manufacturing, and marketing our technologies, the time and costs involved in preparing, filing, prosecuting, maintaining, and enforcing patent claims and other proprietary rights, our ability to establish collaborative arrangements, marketing activities and competing technological and market developments, including regulatory changes and overall economic conditions in our target markets. Our ability to generate revenue and achieve profitability requires us to successfully market and secure purchase orders for our products from customers currently identified in our sales pipeline and to new customers as well. The primary activity that will drive all customers and revenues is the adoption of insurance coverage by commercial insurance carriers nationally, which is a top priority of the Company. These activities, including our planned research and development efforts, will require significant uses of working capital through the rest of 2026 and beyond.
| 12 |
Management evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date the financial statements are issued.
While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering of its debt or equity securities, there can be no assurance that it will be able to do so on reasonable terms, or at all. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering. Neither future cash generated from operating activities, nor management’s contingency plans to mitigate the risk and extend cash resources through the evaluation period, are considered probable. As a result, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern. 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, and unless and until doing so, we intend to fund future operations through additional dilutive or nondilutive financing. There can be no assurances, however, that additional funding will be available on terms acceptable to us, if at all.
The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Recently Adopted Accounting Standards
In 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.
In 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.
Recently 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. GAAP 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 statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted 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.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic (220-40): Disaggregation of Income Statement Expenses, which requires disclosures that disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes inventory purchases, employee compensation, depreciation and intangible amortization expense. Additional disclosures are also required to provide a qualitative description of the amounts in an expense caption that are not separately disaggregated quantitatively and the total amount of selling expenses including a definition. Public business entities are required to adopt the standard for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Disclosures are required for all prior periods presented in the financial statements. Although the standard requires enhanced disclosures, the adoption is not expected to have a material impact on the Company’s financial statements.
| 13 |
3. Related Party Transactions
The
Company has two demand notes receivable from shareholders related to the sale of common stock on January 1, 2016. Both notes’
principal balances are $
Schedule of Related Party Transactions
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Loan | Interest | Interest | Loan | Interest | Interest | |||||||||||||||||||
| Receivable | Receivable | Income | Receivable | Receivable | Income | |||||||||||||||||||
| Shareholder 1 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Shareholder 2 | ||||||||||||||||||||||||
| Principal balance | ||||||||||||||||||||||||
| Allowance for collection risk | ( | ) | ( | ) | ( | ) | ( | ( | ) | ( | ) | |||||||||||||
| Net balance | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
The 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
| Interest & | ||||||||||||||||||
| Interest | Loan | Service Fee | Interest | |||||||||||||||
| March 31, 2026 | Due Date | Rate | Balance | Accrued | Paid | |||||||||||||
| Other Convertibles | % | — | — | |||||||||||||||
| Total | $ | — | $ | $ | — | |||||||||||||
| Interest & | ||||||||||||||||||
| Interest | Loan | Service Fee | Interest | |||||||||||||||
| December 31, 2025 | Due Date | Rate | Balance | Accrued | Paid | |||||||||||||
| Other Convertibles | % | — | — | |||||||||||||||
| Total | $ | — | $ | $ | — | |||||||||||||
The
Company was granted an exclusive, worldwide non-transferable, royalty-free license for the auricular portion of certain patents owned
by a limited liability company in which the Company’s President and Chief Executive Officer and Chief Regulatory, Compliance and
Privacy Officer both maintain an ownership interest. The license allows for the development, marketing and sales of electro-therapy treatments
by stimulation of cranial nerves, cranial nerve branches, auricular nerves, auricular nerve branches, auricular nerve bundles and auricular
anatomical structures in human patients. The exclusive license agreement expires on October 18, 2037, may be terminated by either party
upon 60 days prior written notice and requires the Company to pay costs associated with the maintenance, prosecution and continuation
of patent filings. The Company’s Board of Directors pre-approved the reimbursement of up to $
From
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 NeuroStim devices up to $
4. Prepaids and Other Current Assets
Prepaids and other current assets consisted of the following:
Schedule of Prepaids and Other Current Assets
| March 31, 2026 | December 31, 2025 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid software subscriptions | ||||||||
| Other | ||||||||
| Total prepaids and other current assets | $ | $ | ||||||
| 14 |
5. Other Non-Current Assets
Other non-current assets consisted of the following
Schedule of Other Non-Current Assets
| March 31, 2026 | December 31, 2025 | |||||||
| Security deposit | $ | $ | ||||||
| Deferred offering costs | ||||||||
| Prepaid software subscriptions | — | |||||||
| Total other non-current assets | $ | $ | ||||||
6. Accrued Expenses
Accrued expenses consisted of the following:
Schedule of Accrued Expenses
| March 31, 2026 | December 31, 2025 | |||||||
| Compensation and benefits | $ | $ | ||||||
| Settled litigation | ||||||||
| NSS-2 Bridge lease termination fee | ||||||||
| Legal fees | ||||||||
| Interest | ||||||||
| Research and development fees | ||||||||
| Audit fees | — | |||||||
| Tariffs | ||||||||
| Other | ||||||||
| Total accrued expenses | $ | $ | ||||||
7. Notes Payable
On
August 9, 2025, the Company entered into a $
Interest
expense totaled $
8. Leases
The Company’s leases are comprised of operating leases for office space. At the inception of the lease, the Company determines whether the lease contract conveys the right to control the use of identified property for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating leases are recorded as operating lease 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.
The
Company has two leases consisting of office space in Batesville and Carmel, Indiana.
The
Company recognized operating lease expense of $
| 15 |
The following table presents information related to the Company’s operating leases:
Schedule of Operating Leases
March 31, 2026 | December 31, 2025 | |||||||
| 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 | % | % | ||||||
As of March 31, 2026, the maturities of the Company’s operating lease liabilities were as follows:
Schedule of Maturities Operating Lease Liabilities
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total present value of lease payments | $ |
9. Common Stock and Warrants
The
Company has authorized
On
January 22, 2026, the Company issued
On
January 22, 2026, the Company issued another
During
the three months ended March 31, 2026, pursuant to the August 2025 At The Market Offering Agreement, the Company issued
Additionally,
during the three months ended March 31, 2026, the Company issued (i)
During
the three months ended March 31, 2025, the Company issued (i)
| 16 |
The following is a summary of warrant activity for common stock during the three months ended March 31, 2026 and year ended December 31, 2025:
Schedule of Warrant Activity for Common Stock
| Number of | Weighted-Avg. | Weighted-Avg. | ||||||||||
| Warrants for | Exercise | Remaining | ||||||||||
| Common Stock | Price | Contractual Life | ||||||||||
| Outstanding as of January 1, 2025 | $ | |||||||||||
| Exercised | ( | ) | ||||||||||
| Outstanding as of December 31, 2025 | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Outstanding as of March 31, 2026 | $ | |||||||||||
The following table summarizes the Company’s warrants outstanding and exercisable as of March 31, 2026:
Schedule of Warrants outstanding and Exercisable
| Number of | ||||||||||
| Warrants | Exercise | Expiration | ||||||||
| Outstanding | Price | Date | ||||||||
| Investor Warrant | $ | |||||||||
| 2022 Convertible Notes | $ | |||||||||
| 2023 Convertible Notes | $ | |||||||||
| Underwriter Warrants | $ | |||||||||
| Advisory Agreement Warrants | $ | |||||||||
10. Preferred Stock
The
Company’s shareholders authorized
Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the Series B Preferred Stock shareholders maintain priority preference over all other classes of capital stock. A merger or consolidation (other than one in which stockholders of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring corporation) and a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company will be treated as a liquidation event, thereby triggering payment of the liquidation preferences.
As
of March 31, 2026 and December 31, 2025, there were
| 17 |
11. Stock-Based Compensation
Restricted Stock Units
Pursuant to the NeurAxis, Inc. 2022 Omnibus Securities and Incentive Plan, the Company initiated grants of restricted stock units (“RSUs”) to certain employees as follows:
Schedule of Restricted Stock Units
| Three Months Ended March 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Number of RSUs | Weighted Average Fair Value | Number of RSUs | Weighted Average Fair Value | |||||||||||||
| Outstanding as of Beginning of Period | $ | — | $ | — | ||||||||||||
| Granted | ||||||||||||||||
| Vested | ( | ) | — | — | ||||||||||||
| Outstanding as of End of Period | $ | $ | ||||||||||||||
The
RSUs granted during the three months ended March 31, 2026 are subject to a pro rata annual vesting period over
Total
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 $
Stock Options
The 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 | Aggregate Intrinsic Value | |||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | — | |||||||||||||
| Outstanding as of March 31, 2026 | $ | $ | — | |||||||||||||
| Vested and Exercisable as of March 31, 2026 | $ | $ | — | |||||||||||||
There
was
| 18 |
Employee Stock Purchase Plan
On
July 1, 2025, the Compensation Committee of the Board of Directors (“Board”) of the Company adopted the NeurAxis, Inc.
2025 Employee Stock Purchase Plan (the “ESPP”), effective as of the same date and subject to Shareholder approval by
July 1, 2026.
12. Warrant Liabilities
The
Company has evaluated financial instruments arising from warrants that are issued and outstanding as of March 31, 2026 and December 31,
2025. 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 $
The 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
| Level 3 | ||||
| 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 | $ | |||
13. Segment Information
The 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 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.
| 19 |
The 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
| 2026 | 2025 | |||||||
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net Revenue | $ | $ | ||||||
| COGS | ||||||||
| Gross Profit | ||||||||
| Selling Expenses (a) | ||||||||
| Research & Development (a) | ||||||||
| Compensation and Benefits (a) | ||||||||
| Professional Services (a) | ||||||||
| Legal Settlement | - | |||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Other Operating Expenses (a) (b) | ||||||||
| Segment Operating Loss | ( | ) | ( | ) | ||||
| Interest Expense | ( | ) | ( | ) | ||||
| Change in Fair Value of Warrant Liability | ( | ) | ||||||
| Other Income | ||||||||
| Total Other (Expense) Income, Net | ( | ) | ||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| (a) | ||
| (b) |
Total
segment assets for IB-STIM amounted to $
Significant
segment non-cash charges settled in common stock include (i) consulting and advisory fees totaling $
14. Settled Litigation
On
February 6, 2019, plaintiff Ritu Bhambhani, M.D., initiated a lawsuit against Innovative Health Solutions, Inc. and others in the United
States District Court for the District of Maryland. Plaintiffs Bhambhani and Sudhir Rao subsequently amended the complaint, with the
Third Amended Complaint (“Complaint”) containing the most recent set of allegations. The Complaint asserted claims under
the RICO Act, as well as of fraudulent misrepresentation, intentional misrepresentation by concealment, and civil conspiracy and sought
compensatory damages in excess of $
On February 11, 2022, the Company filed a motion for summary judgment based upon the plaintiffs not being proper parties to assert claims against the Company. On June 14, 2022, the Court granted the Company’s motion for summary judgment and dismissed the Complaint.
On July 14, 2022, plaintiffs Ritu Bhambhani and Sudhir Rao filed a notice of appeal with the Fourth Circuit Court of Appeals. On June 3, 2024, the Fourth Circuit denied the plaintiff’s appeal and entered judgment against the plaintiffs. On June 25, 2024, the Fourth Circuit entered its mandate declaring that its judgment against the plaintiffs took effect that day. The plaintiffs did not seek any further review or appeal of that judgment.
| 20 |
Also
on July 14, 2022, plaintiffs Ritu Bhambhani, LLC; Box Hill Surgery Center, LLC; Pain and Spine Specialists of Maryland, LLC; and SimCare
ASC, LLC initiated a lawsuit against the Company and others in the United States District Court for the District of Maryland. The plaintiffs
in this lawsuit are business entities owned or partially owned by the plaintiffs that initiated the litigation described above. The Complaint
asserted claims under the RICO Act, as well as fraudulent misrepresentation, intentional misrepresentation by concealment, and civil
conspiracy and seeks compensatory damages in excess of $
On September 28, 2022, the Company filed a motion to dismiss all claims. On May 25, 2023, the Court issued an Order and a Memorandum Opinion which dismissed the plaintiffs’ claims related to the RICO Act. The remaining claims are still pending, and no trial date has been set for the case. The Court has vacated its Scheduling Order at the parties’ request so that the parties could try to resolve the disputes in both cases through an independent third-party mediator.
On
April 25, 2025, the parties reached a $
15. Commitments and Contingencies
Manufacturing Services Agreement
The 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 term. 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 materials. Performance under the agreement is initiated by orders issued by the Company and accepted by the manufacturers. The Company also entered into quality agreements with the manufacturers to perform quality assurance services on product provided by the Company.
Executive Employment Agreements
The
Company, as authorized by the board of directors, entered into employment agreements with certain employees to provide incentives to
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
There
are nine key employees and two non-employees that have stock options of the Company totaling
| 21 |
In April 2023, the Company amended the employee agreements to, among other things, clarify that the special one-time incentive payment and the deferred bonus are contingent upon the effective date of the planned initial public offering. The amendment also sets forth a process for executives to exercise the stock options in accordance with the terms of the stock option agreement in effect as of the date of the employment agreement and to clarify that there is no modification to the stock option agreements.
The
Company recorded the fair value of the stock options totaling $
Threatened Litigation
From 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 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 in which any of the Company’s directors, officers or affiliates is an adverse party to the Company or has a material interest adverse to the Company’s interest. Legal fees are expensed as incurred.
In
January 2024, Dr. Arturo Taca served notice to the Company that asserted an interest in its U.S. Patent No. 10,413,719 valued at $
16. Subsequent Events
On
April 1, 2026, the Company issued
On
April 9, 2026, the Company’s Board of Directors approved the cancelation of
On
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 $
On
April 22, 2026, the Company granted
On
May 7, 2026, the Company issued
In
April and May of 2026, pursuant to the August 2025 At The Market Offering Agreement with Craig-Hallum Capital Group LLC, the Company
issued
In
April and May of 2026, the Company issued
The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have been no other events that have occurred that would require adjustments to our disclosures in the condensed financial statements.
| 22 |
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial statements and the related notes appearing in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties, and assumptions. You should read the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections of our Form 10-K for the period ended December 31, 2025 (the “2025 Annual Report”) for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a growth stage company focused on developing neuromodulation therapies to address chronic and debilitating conditions in children. Our mission is to advance drug-free neuromodulation therapies that improve patient outcomes and reduce medication burden in complex disorders, while expanding access to effective care for populations with significant unmet needs. Our IB-Stim device is a PENFS system with FDA indications for patients 8 years and older with functional abdominal pain associated with IBS, functional dyspepsia (FD) and associated FD nausea symptoms. Our RED device is an easy-to-use, office-based, point-of-care test that identifies patients with chronic constipation due to pelvic floor dyssynergia and has FDA market clearance for adults. Other indications in our pipeline are comprised of post-concussion syndrome, cyclic vomiting syndrome, post-operative pain and fibromyalgia pain.
Since our inception, we have incurred significant operating losses. Our net loss was $1,761,432 and $2,278,684 for the three months ended March 31, 2026 and 2025, respectively. Although we had stockholders’ equity of $5,747,550 as of March 31, 2026, our auditors have expressed substantial doubt about our ability to continue as a going concern in their audit opinion. We expect to incur significant expenses and operating losses for the foreseeable future as we continue to pursue widespread insurance coverage of our IB-Stim and RED devices and seek FDA clearance of our device for other indications. There are a number of milestones and conditions that we must satisfy before we are able to generate sufficient revenue to fund our operations, including FDA clearance of our IB-Stim device to treat future indications.
Factors Affecting our Business and Results of Operations
Revenue
Our revenue is derived from the sale of our IB-Stim device to healthcare companies, primarily hospitals and clinics. Sales generally are not seasonal and only mildly correlated with economic cycles. Our IB-Stim device sells for $1,195 per device, and each patient being treated for functional abdominal pain associated with IBS, functional dyspepsia (FD) and/or associated FD with nausea symptoms will use four devices.
Our sales typically are made on a purchase order basis rather than through long-term purchase commitments. We enter into sales agreements with customers for IB-Stim devices based on purchase orders and standard terms, which vary slightly based on the customer’s form, and conditions of sale. Standard payment terms generally are that payment is due within 30 days.
| 23 |
Inflation did not have a material impact on our operations for any applicable period and we do not expect inflation to have a material impact on our operations for the foreseeable future.
Gross Profit and Gross Margin
Our management uses gross profit and gross margin to evaluate the efficiency of operations and as a key component to determining the effectiveness and allocation of resources. We calculate gross profit as net sales less cost of goods sold, and gross margin as gross profit divided by net sales. Our gross margin has been and will continue to be affected by a variety of factors, primarily the average selling price of our IB-Stim device, production volume, order flows, change in mix of customers, third-party manufacturing costs related to components of our devices, and cost-reduction strategies. We expect our gross profit to increase for the foreseeable future as our net sales grows, both through broader insurer acceptance of our IB-Stim device in the near term and approval of our technology for the treatment of other indications over the longer term. Our gross margin may fluctuate from quarter to quarter due to changes in average selling prices and the mix of patient healthcare coverage (e.g., discounts are provided to lower income patients without healthcare insurance), particularly as we introduce enhancements to our IB-Stim device and new products to address other indications, and as we adopt new manufacturing processes and technologies.
Expenses
We have four categories of expenses: cost of goods sold, selling, research and development (“R&D”), and general and administrative (“G&A”).
Costs of goods sold consist of costs paid for the IB-Stim and RED devices to our contract manufacturers along with shipping and handling costs and expired inventory charges. Expired inventory expense is related to the FDA clearance period from the date our devices are manufactured, and if the device is not sold in such period, a charge is recorded. Expired inventory charges totaled $758 and $0 for the three months March 31, 2026 and 2025, respectively. We have fixed-priced contracts with the manufacturers of our devices.
Our selling expenses primarily consist of advertising, marketing and promotion of the Company’s products including salaries, commissions and other related personnel costs including travel expenses. 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, to conform to current year presentation.
Our research and development expenses primarily consist of clinical research studies, new product development, costs of materials and supplies used in research and development activities and salaries and other related personnel costs for employees engaged in research and development activities to have our IB-Stim and RED devices cleared by the FDA for other indications. The Company 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, to conform to current year presentation. We expect future R&D expenses for other indications, such as post-concussion syndrome, cyclic vomiting syndrome, post-operative pain and fibromyalgia pain.
General and administrative expense primarily consists of wages and benefits, professional fees including legal and audit, insurance, investor relations, facility costs, utilities and travel.
Results of Operations
The following table presents our statements of operations for the three months ended March 31, 2026 and 2025, respectively:
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net sales | $ | 1,607,883 | $ | 895,655 | ||||
| Cost of goods sold | 218,366 | 139,475 | ||||||
| Gross profit | 1,389,517 | 756,180 | ||||||
| Selling expenses | 824,336 | 500,119 | ||||||
| Research and development | 99,567 | 117,867 | ||||||
| General and administrative | 2,206,293 | 2,433,292 | ||||||
| Operating loss | (1,740,679 | ) | (2,295,098 | ) | ||||
| Other (expense) income: | ||||||||
| Interest expense, net | (26,189 | ) | (2,237 | ) | ||||
| Change in fair value of warrant liability | (31,506 | ) | 1,831 | |||||
| Other income | 36,942 | 16,820 | ||||||
| Total other (expense) income, net | (20,753 | ) | 16,414 | |||||
| Net loss | $ | (1,761,432 | ) | $ | (2,278,684 | ) | ||
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Net Sales
Net sales increased $712,228, or 79.5%, from $895,655 for the three months ended March 31, 2025, to $1,607,883 for the three months ended March 31, 2026, due to volume growth from customers with full insurance reimbursement coverage that is a function of IB-Stim’s Category I CPT code effective date of January 1, 2026 and broader insurance coverage year over year.
Gross Profit and Gross Margin
Gross profit increased $633,337, or 83.8%, from $756,180 for the three months ended March 31, 2025, to $1,389,517 for the three months ended March 31, 2026, due to higher unit volume from customers with full insurance reimbursement coverage. The increase in gross margin from 84.4% for the three months ended March 31, 2025, to 86.4% for the three months ended March 31, 2026, was due to higher growth from the Company’s undiscounted full reimbursement customers compared to the Company’s financial assistance programs that are discounted to patients without insurance coverage, partially offset by higher device manufacturing costs.
Selling Expenses
Selling expenses increased $324,217, or 64.8%, from $500,119 for the three months ended March 31, 2025, to $824,336 for the three months ended March 31, 2026, due to commission from higher sales volume and additional sales reps and marketing personnel to facilitate growth resulting from the IB-Stim Category I CPT code and broader insurance coverage.
Research and Development
Research and development expenses declined $18,300, or 15.5%, from $117,867 for the three months ended March 31, 2025, to $99,567 for the three months ended March 31, 2026, due to non-recurring RED device development costs in 2025 and proceeds received for devices used in 2026 clinical research studies.
General and Administrative
General and administrative expenses declined $226,999, or 9.3%, from $2,433,292 for the three months ended March 31, 2025, to $2,206,293 for the three months ended March 31, 2026, primarily due to a one-time, non-recurring charge in 2025 to settle a lawsuit partially offset by incremental stock compensation expense from the third year of a three-year vesting plan, higher benefit costs and consulting fees incurred to secure a Federal Supply Schedule agreement with the Veterans Administration.
Operating Loss
Our operating loss improved $554,419, or 24.2%, from $2,295,098 for the three months ended March 31, 2025, to $1,740,679 for the three months ended March 31, 2026, primarily due to higher sales volume and the corresponding gross profit and the absence of a one-time, non-recurring charge in 2025 to settle a lawsuit, partly offset by higher selling expenses.
Other (Expense) Income, Net
Other expense increased $37,167, or 226.4%, from $16,414 of income for the three months ended March 31, 2025, to $20,753 of expense for the three months ended March 31, 2026, primarily due to the change in fair value of warrants and interest expense associated with the settlement of the lawsuit.
Net Loss
Our net loss improved $517,252, or 22.7%, from $2,278,684 for the three months ended March 31, 2025, to $1,761,432 for the three months ended March 31, 2026, due to higher sales volume and the corresponding gross profit and the absence of a one-time, non-recurring charge in 2025 to settle a lawsuit, partly offset by higher selling expenses.
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Liquidity and Capital Resources
We had cash on hand of $7,078,659 and $4,965,072 as of March 31, 2026, and December 31, 2025, respectively. We maintained a working capital surplus of $5,328,867 and $2,941,091 as of March 31, 2026, and December 31, 2025, respectively. The increase in working capital was primarily due to (i) proceeds from the issuance of common stock pursuant to the At The Market capital facility and the exercise of warrants and (ii) higher accounts receivable driven by IB-Stim device sales.
We have incurred losses since inception and have funded our operations primarily with a combination of sales, debt, and the sale of capital stock. As of March 31, 2026, we had stockholders’ equity of $5,747,550 and short-term borrowings of $100,735.
Our future capital requirements will depend upon many factors, including progress with developing, manufacturing, and marketing our technologies, the time and costs involved in preparing, filing, prosecuting, maintaining, and enforcing patent claims and other proprietary rights, our ability to establish collaborative arrangements, marketing activities and competing technological and market developments, including regulatory changes and overall economic conditions in our target markets. Our ability to generate revenue and achieve profitability requires us to successfully market and secure purchase orders for our products from customers currently identified in our sales pipeline and to new customers as well. The primary activity that will drive all customers and revenues is the adoption of insurance coverage by commercial insurance carriers nationally, so this is a top priority of the Company. These activities, including our planned research and development efforts, will require significant uses of working capital through the rest of 2026 and beyond.
Additionally, we have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. Our management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act. This additional corporate governance time required of management could limit the amount of time our management has to implement our business plan and may delay our anticipated growth plans.
The following table summarizes our cash flow from operating, investing and financing activities for the three months ended March 31, 2026 and 2025:
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (1,229,757 | ) | $ | (1,603,655 | ) | ||
| Net cash used in investing activities | - | (18,000 | ) | |||||
| Net cash provided by (used in) financing activities | 3,343,344 | (69,845 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 2,113,587 | (1,691,500 | ) | |||||
| Cash and cash equivalents at beginning of period | 4,965,072 | 3,696,870 | ||||||
| Cash and cash equivalents at end of period | $ | 7,078,659 | $ | 2,005,370 | ||||
Operating Activities – Net cash used in operating activities decreased $373,898, or 23.3%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a lower operating loss attributable to growth from the Category I CPT code and increased payor coverage as well as more efficient working capital utilization during the three months ended March 31, 2026.
Investing Activities – Net cash used in investing activities decreased $18,000, or 100.0%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, due to capital expenditures to manufacture the RED device in 2025 that did not recur in 2026 once the device was launched.
Financing Activities – Net cash provided by (used in) financing activities increased $3,413,189, or 4,886.8%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to proceeds from the issuance of common stock pursuant to the At The Market capital facility and the exercise of warrants during the three months ended March 31, 2026.
Critical Accounting Estimates
There have been no material changes to the critical accounting estimates previously described in our Form 10-K for fiscal year ended December 31, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated our Company’s disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on this evaluation, and in light of the material weaknesses in our internal control over financial reporting described below, our principal executive officer and principal financial officer concluded that as of March 31, 2026, our disclosure controls and procedures were not effective.
Evaluation of Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our principal executive officer and principal financial officer and oversight of the Audit Committee of the Board of Directors, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Our management, including our principal executive officer and principal financial officer, recognizes that internal controls over financial reporting, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.
Based on our evaluation, management concluded that our internal control over financial reporting was not effective as of March 31, 2026.
The following material weaknesses in our internal control over financial reporting were identified:
| ● | Ineffective approval processes governing (i) timely Board of Directors authorization and (ii) segregation of duties and roles and responsibilities configurations within the Company’s financial reporting system; | |
| ● | Inadequate contract management process to capture all executed agreements prior to the commencement of services in order to ensure accuracy within the proper accounting period; | |
| ● | Misapplication of U.S. GAAP; and | |
| ● | Ineffective disclosure controls and procedures a result of (i) lack of segregation of duties, (ii) lack of internal control structure review and (iii) misapplication of U.S. GAAP. |
In order to remediate the identified material weaknesses, management, with the oversight of the Audit Committee of the Board of Directors, undertook measures to enhance the Company’s internal control environment, including the (i) hiring of a principal financial officer and other accounting personnel to ensure the appropriate application of U.S. GAAP, (ii) hiring of a dedicated internal control manager who reports directly to the Audit Committee and whose sole responsibility is to develop, document, implement and maintain our internal control framework including walk throughs, narratives, flow charts, risk control matrices and independent testing of our financial and IT controls, (iii) documentation and communication of business policies such as a delegation of authority over company transactions as well as invoice and journal entry approvals, (iv) completion of a formal monthly close process including account reconciliations with supporting documentation, (v) engagement of a third-party firm that implemented controls to segregate duties and approvals with the proper assignment of roles and responsibilities within the Company’s financial system and (vi) the adoption and implementation of the Information System Audit and Control Association (“ISACA”) Control Objectives for Information and Related Technologies (“COBIT”) 2019 framework to design, develop, govern and manage enterprise IT. However, management has not fully implemented the remediation steps, in particular testing, and expects remediation efforts to continue through the remainder of fiscal year 2026.
While these remediation efforts are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of the Company’s internal controls over a sustained period of financial reporting cycles, management is committed to maintaining a strong internal control program over financial reporting and will take further actions and implement additional enhancements or improvements as necessary.
Changes in Internal Control Over Financial Reporting
Other than the remediation efforts described above, there were no changes in our internal controls over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
From 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 below, 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 in which any of the Company’s directors, officers or affiliates is an adverse party to the Company or has a material interest adverse to the Company’s interest. Legal fees are expensed as incurred.
On February 6, 2019, plaintiff Ritu Bhambhani, M.D., initiated a lawsuit against Innovative Health Solutions, Inc. and others in the United States District Court for the District of Maryland. Plaintiffs Bhambhani and Sudhir Rao subsequently amended the complaint, with the Third Amended Complaint (“Complaint”) containing the most recent set of allegations. The Complaint asserted claims under the RICO Act, as well as of fraudulent misrepresentation, intentional misrepresentation by concealment, and civil conspiracy and sought compensatory damages in excess of $5 million, pre-judgment interest, punitive damages, attorney’s fees, court costs and designation of the case as a class action. The Complaint stated that the Company, distributors of the Company’s product, and medical billing and coding consultants allegedly made misrepresentations to the plaintiffs that the Company’s NeuroStim device and related procedures could be billed to, and reimbursed by, Medicare and other insurance payors as a surgically implantable neurostimulator. Plaintiffs claim to have suffered damages when Medicare administrative contractors declined to pay plaintiffs for their use of the device.
On February 11, 2022, the Company filed a motion for summary judgment based upon the plaintiffs not being proper parties to assert claims against the Company. On June 14, 2022, the Court granted the Company’s motion for summary judgment and dismissed the Complaint.
On July 14, 2022, plaintiffs Ritu Bhambhani and Sudhir Rao filed a notice of appeal with the Fourth Circuit Court of Appeals. On June 3, 2024, the Fourth Circuit denied the plaintiff’s appeal and entered judgment against the plaintiffs. On June 25, 2024, the Fourth Circuit entered its mandate declaring that its judgment against the plaintiffs took effect that day. The plaintiffs did not seek any further review or appeal of that judgment.
Also on July 14, 2022, plaintiffs Ritu Bhambhani, LLC; Box Hill Surgery Center, LLC; Pain and Spine Specialists of Maryland, LLC; and SimCare ASC, LLC initiated a lawsuit against the Company and others in the United States District Court for the District of Maryland (the “2022 Lawsuit”). The plaintiffs in this lawsuit are business entities owned or partially owned by the plaintiffs that initiated the litigation described above. The Complaint asserted claims under the RICO Act, as well as fraudulent misrepresentation, intentional misrepresentation by concealment, and civil conspiracy and seeks compensatory damages in excess of $75,000, pre-judgment interest, punitive damages, attorney’s fees, and court costs. The Complaint states that the Company, distributors of the Company’s product, and medical billing and coding consultants allegedly made misrepresentations to the plaintiffs that the Company’s NeuroStim device and related procedures could be billed to, and reimbursed by, Medicare and other insurance payors as a surgically implantable neurostimulator. Plaintiffs claim to have suffered damages when Medicare administrative contractors declined to pay plaintiffs for their use of the device.
On September 28, 2022, the Company filed a motion to dismiss all claims. On May 25, 2023, the Court issued an Order and a Memorandum Opinion which dismissed the plaintiffs’ claims related to the RICO Act. The remaining claims are still pending, and no trial date has been set for the case. The Court has vacated its Scheduling Order at the parties’ request so that the parties could try to resolve the disputes in both cases through an independent third-party mediator.
On April 25, 2025, the parties reached a $750,000 settlement payable in 12 equal monthly installments that began in January of 2026 with remaining payments of $562,500 as of March 31, 2026.
In January 2024, Dr. Arturo Taca served notice to the Company that asserted an interest in its U.S. Patent No. 10,413,719 valued at $2,000,000 based on his own work in neurostimulation. The Company denied both the neurostimulation patent and compensation claims. The case remains unresolved. While it is too early to predict the ultimate outcome of this matter, we believe the Company has meritorious defenses and intends to defend this matter vigorously.
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ITEM 1A: RISK FACTORS
For information regarding the risk factors that could affect the Company’s business, results of operations, financial condition and liquidity, see the information under Part I, Item 1A. “Risk Factors” in the Form 10-K, which is accessible on the SEC’s website at www.sec.gov. There have been no material changes to the risk factors previously disclosed in the Form 10-K.
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5: OTHER INFORMATION.
Insider Trading Arrangements and Policies
During
the quarter ended March 31, 2026, no director or officer of the Company
ITEM 6: EXHIBITS
| Exhibit | ||
| Number | Exhibit Description | |
| 31.1* | Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer | |
| 31.2* | Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer | |
| 32.1** | Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer | |
| 32.2** | Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** Furnished herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NEURAXIS, INC. | ||
| Date: May 12, 2026 | ||
| By: | /s/ Brian Carrico | |
| Brian Carrico | ||
Chief Executive Officer (Principal Executive Officer) | ||
| Date: May 12, 2026 | /s/ Timothy Henrichs |
| Timothy Henrichs | |
| Chief Financial Officer | |
| (Principal Financial and Principal Accounting Officer) |
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