UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file number 001-41775

NEURAXIS, INC.

(Exact name of registrant as specified in its charter)

Delaware

45-5079684

(State or other jurisdiction of

incorporation or organization)

(I. R. S. Employer

Identification No.)

11550 N. Meridian Street, Suite 325

Carmel, IN

46032

(Address of principal executive offices)

(Zip Code)

(812) 689-0791

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		NRXS		NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of May 17, 2024 was 6,647,960 shares.

TABLE OF CONTENTS

PART I		3

ITEM 1:	FINANCIAL STATEMENTS	3
	Condensed Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	3
	Condensed Statements of Operations for the Three Months Ended March 31, 2024, and 2023 (Unaudited)	4
	Condensed Statements of Stockholders’ Deficit for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	5
	Condensed Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	6
	Notes to Condensed Financial Statements (Unaudited)	7
ITEM 2:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	24
ITEM 3:	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	27
ITEM 4:	CONTROLS AND PROCEDURES	28

PART II		29

ITEM 1:	LEGAL PROCEEDINGS	29
ITEM 1A:	RISK FACTORS	29
ITEM 2:	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	29
ITEM 3:	DEFAULTS UPON SENIOR SECURITIES	30
ITEM 5:	OTHER INFORMATION	30
ITEM 6:	EXHIBITS	31
SIGNATURES		32

PART I

ITEM 1. FINANCIAL STATEMENTS

NeurAxis, Inc.

Condensed Balance Sheets

	March 31,
	2024			December 31,
	(Unaudited)			2023
Assets

Current Assets:
Cash and cash equivalents	$	81,752		$	78,560
Accounts receivable, net		90,534			73,167
Inventories		20,194			21,220
Prepaids and other current assets		215,354			69,663
Total current assets		407,834			242,610

Property and Equipment, at cost:		451,347			436,626
Less - accumulated depreciation		(356,190	)		(348,074	)
Property and equipment, net		95,157			88,552

Other Assets:
Operating lease right of use asset, net		337,286			70,263
Intangible assets, net		105,452			108,073
Total Assets	$	945,729		$	509,498

Liabilities

Current Liabilities:
Accounts payable	$	1,237,040		$	1,204,219
Accrued expenses		816,480			401,088
Current portion of operating lease payable		35,753			49,127
Notes payable		96,456			148,062
Notes payable - convertible notes, net of unamortized financing fees $235,281 and $0 as of March 31, 2024 and December 31, 2023, respectively		1,299,719			—
Customer deposits		85,754			74,947
Share liability		227,000			—
Warrant liabilities		17,509			8,225
Total current liabilities		3,815,711			1,885,668

Non-current Liabilities:
Operating lease payable, net of current portion		314,472			27,071
Total non-current liabilities		314,472			27,071

Total liabilities		4,130,183			1,912,739
Commitments and contingencies (see note 12)		-			-

Stockholders’ Deficit
Convertible Series A Preferred stock, $0.001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		—			—
Convertible Series Seed Preferred stock, $0.001 par value; 120,000 shares authorized; 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		—			—
Preferred stock, value		—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 6,594,897 and 6,508,897 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		6,595			6,509
Additional paid in capital		47,487,713			47,148,361
Accumulated deficit		(50,678,762	)		(48,558,111	)

Total Stockholders’ Deficit		(3,184,454	)		(1,403,241	)

Total Liabilities and Stockholders’ Deficit	$	945,729		$	509,498

Notes to condensed financial statements are an integral part of these statements.

NeurAxis, Inc.

Condensed Statements of Operations (Unaudited)

	2024			2023
	For the Three Months Ended March 31,
	2024			2023

Net Sales	$	646,635		$	805,110
Cost of Goods Sold		75,081			95,900

Gross Profit		571,554			709,210

Selling Expenses		80,030			107,932
Research and Development		5,570			16,797
General and Administrative		2,318,074			1,480,755

Operating Loss		(1,832,120	)		(896,274	)

Other Income (Expense):
Financing charges		(230,824	)		(2,772	)
Interest expense		(26,560	)		(161,689	)
Change in fair value of warrant liability		(9,284	)		234,807
Change in fair value of derivative liability		—			191,297
Amortization of debt discount and issuance cost		(21,683	)		(2,662,655	)
Extinguishment of debt liabilities		—			1,129,498
Other income		—			1,550
Other expense		(180	)		(7,172	)
Total other income (expense), net		(288,531	)		(1,277,136	)

Net Loss	$	(2,120,651	)	$	(2,173,410	)

Per-Share Data
Basic and diluted loss per share	$	(0.32	)	$	(1.18	)

Weighted Average Shares Outstanding
Basic and diluted		6,550,567			2,003,322

Notes to condensed financial statements are an integral part of these statements.

NeurAxis, Inc.

Condensed Statements of Stockholders’ Deficit (Unaudited)

	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			(Deficit)
	Convertible Series A Preferred Stock				Convertible Series Seed Preferred Stock				Common Stock				Additional Paid In		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balances as of January 1, 2023		506,637	$	507		115,477	$	115		1,963,322	$	1,963	$	28,355,230	$	(33,931,428	)	$	(5,573,613	)
Net loss		—		—		—		—		—		—		—		(2,173,410	)		(2,173,410	)
Balances as of March 31, 2023		506,637	$	507		115,477	$	115		1,963,322	$	1,963	$	28,355,230	$	(36,104,838	)	$	(7,747,023	)

Balances as of January 1, 2024		—	$	—		—	$	—		6,508,897	$	6,509	$	47,148,361	$	(48,558,111	)	$	(1,403,241	)
Warrants exercised		—		—		—		—		11,000		11		26,169		—			26,180
Additional paid in capital from warrants issued under consulting agreement		—		—		—		—		—		—		15,543		—			15,543
Additional paid in capital from warrants issued as debt discount		—		—		—		—		—		—		97,465		—			97,465
Common stock issued from agreements		—		—		—		—		75,000		75		200,175		—			200,250
Net loss		—		—		—		—

SEC Form 10-Q filed by Neuraxis Inc.