Autonomix Medical Inc

Note1 – Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies**

Description of the Business

Autonomix Medical, Inc. (“we,” “our,” the “Company”) is a medical device company organized as a Delaware corporation on* June 10, 2014.*The Company is a pre-revenue, clinical stage life sciences company focused on advancing innovative technologies for sensing and treating disorders relating to the peripheral nervous system.

Reverse Stock Split

The Company held its annual meeting of stockholders (the "Annual Meeting") on* October 17, 2024.In that Annual Meeting, stockholders of the Company approved an amendment to the Company’s amended and restated certificate of incorporation (the "Amendment”) to effect the reverse stock split at a ratio in the range of1*-for-2 to1-for-50, with such ratio to be determined in the discretion of the Company’s board of directors and with such reverse stock split to be effected at such time and date, if at all, as determined by the Company’s board of directors in its sole discretion prior to theone-year anniversary of the Annual Meeting.

Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved aone-for-twenty (1:20) reverse stock split (the "Reverse Stock Split”) of the Company’s common stock and the filing of the Amendment to effectuate the Reverse Stock Split. The Amendment was filed with the Secretary of State of the State of Delaware and the Reverse Stock Split became effective in accordance with the terms of the Amendment at11:59 p.m. Eastern Time on* October 24, 2024 (the "Effective Time”), and the Company’s common stock opened for trading on The Nasdaq Capital Market on October 25, 2024on a post-split basis, under the existing ticker symbol "AMIX” but with a new CUSIP number05330T205.* The Amendment provides that, at the Effective Time, every twenty shares of the Company’s issued and outstanding common stock will automatically be combined intoone issued and outstanding share of common stock, without any change in par value per share, which will remain $0.001.

The number of authorized shares of common stock will remain at 500 million shares. As a result of the Reverse Stock Split, proportionate adjustments will be made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all outstanding stock options, restricted stock unit awards, warrants and convertible notes, which will result in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock unit awards, warrants and convertible notes and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants. In addition, the number of shares reserved for issuance under the Company’s equity compensation plan immediately prior to the Effective Time will be reduced proportionately.

No fractional shares will be issued as a result of the Reverse Stock Split. Any stockholder who would have been entitled to receive a fractional share as a result of the process will be entitled to the rounding up of the fractional share to the nearest whole number. See Note7 for subsequent event regarding rounding shares.

The Reverse Stock Split has been retroactively adjusted throughout these interim financial statements and footnotes for all periods presented, including exercise prices and share data. As a result of the Reverse Stock Split, the Company reclassified approximately $18 thousand between common stock par value and additional paid-in capital.

Liquidity and Going Concern

The Company's financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company is an early-stage company that is subject to all the risks associated with early-stage and emerging growth companies and has incurred losses since inception.

For thesix months ended* September 30, 2024and2023*, the Company incurred net losses of $5.5 million and $6.9 million, respectively, and had net cash flows used in operating activities of $3.4 million and $1.8 million, respectively. The Company hadno revenues for thethree andsix months ended* September 30, 2024and2023*, respectively, and an accumulated deficit of $44.5 million, working capital of $4.1 million and cash of $5.2 million as of* September 30, 2024*. The Company doesnot expect to generate positive cash flows from operating activities in the near future.

The Company estimates its current cash resources are sufficient to fund its operations into butnot beyond thesecond calendar quarter of2025. The Company recognizes it will need to raise additional capital to continue to execute its business plan, including obtaining regulatory clearance for its products currently under development and commercializing and generating revenues from products under development. There isno assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital, generate sufficient product revenues, control expenditures and regulatory matters, among other factors, will adversely impact the Company’s ability to meet its financial obligations as they become due and payable and to achieve its intended business objectives. If the Company is unable to raise sufficient additional funds, it will have to scale back its operations.

These factors raise substantial doubt about the Company's ability to continue as a going concern withinone year after the date the financial statements are issued. The accompanying condensed financial statements have been prepared on a going concern basis and donot include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Basis of Presentation

The accompanying condensed interim financial statements are unaudited. These unaudited condensed interim financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they donot include all the information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. The Company’s fiscal year end is* March 31st. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and accompanying notes for the year ended March 31, 2024as found in the Annual Report in our Form10*-K filed with the SEC on* May 31, 2024.In the opinion of management, the unaudited condensed interim financial statements reflect all the adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position, results of operations and cash flows for the quarterly and year-to-date periods, as applicable. The interim results of operations arenot* necessarily indicative of the results that* mayoccur for the full fiscal year. The March 31, 2024* audited condensed balance sheet included herein was derived from the audited financial statements, but doesnot include all disclosures, including notes, required by GAAP for complete financial statements.

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Use of Estimates in Financial Statement Presentation

The preparation of these unaudited condensed interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company's significant estimates and assumptions include work performed butnot yet billed by contract manufacturers, engineers and research organizations, warrant liability and the valuation of equity related instruments. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Some of these judgments can be subjective and complex, and, consequently, actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid accounts with original maturities ofthree months or less at the date of acquisition to be cash equivalents. Periodically, the Company* maycarry cash balances at financial institutions in excess of the federally insured limit of$250,000.* The Company hasnot experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits isnot significant.

Offering Costs

Offering costs consist of professional costs incurred through the balance sheet date that are direct and incremental related to the Company’s initial public offering ("IPO"). These costs, together with the selling agent fees, were reclassified to additional paid-in capital upon completion of the Company’s IPO on* January 26, 2024.*Costs associated with salaries and other period costs were expensed as incurred.

During thesix months ended* September 30, 2024and2023*, the Company paid $0.0 and $0.1 million, respectively, of offering costs related to its IPO.

Property and Equipment

Property and equipment (comprised of computer and IT equipment) are stated at historical cost and depreciated on a straight-line basis over their estimated useful lives, generally three years. Upon disposition of the assets, the costs and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations.

Convertible Notes

The Company evaluates embedded redemption, conversion and other features within its debt to determine whether any embedded features should be bifurcated from the host instrument and accounted for as a derivative at fair value, with changes in fair value recorded in the condensed statements of operations.

The Company’s debt is carried on the condensed balance sheets on a historical cost basis net of unamortized discounts and premiums because the Company hasnot elected the fair value option of accounting. Costs associated with acquiring debt, including detachable warrants issued in connection with the financing, are capitalized as a debt discount. The debt discount is presented in the condensed balance sheets as a direct deduction from the carrying amount of the debt liability. The costs are amortized over the estimated contractual life of the related debt instrument using the effective interest method and are included in interest expense in the condensed statements of operations.

If the Company incurs costs associated with its convertible notes, in advance of the receipt of proceeds, the Company will record a deferred asset. Upon receipt of proceeds the Company will reclassify the deferred asset as a direct deduction from the carrying amount, as described above.

In addition, since the instruments included a substantive conversion feature as of time of issuance, the issuance of equity securities to settle the outstanding notes with the conversion were accounted for as a contractual conversion withno gain or loss recognized related to the equity securities issued to settle the instrument.

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Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes athree-level valuation hierarchy for disclosures of fair value measurements, defined as follows:

Level1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

Level2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instrument

Level3 – inputs to the valuation methodology are unobservable and significant to the fair value and require significant judgment and estimation.

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. While the Company believes that its valuation methods are appropriate, the Company recognizes that the use of different methodologies or assumptions to determine the fair value could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values are the probability weighting of the different settlement outcomes used.

The Company didnot have any assets or liabilities measured at fair value as of* September 30, 2024* and* March 31, 2024*. In thefourth quarter of the Company's fiscal year ended* March 31, 2024* there was a transfer out of Level3 for the warrant liability, for the settlement and reclassification to equity of the instrument, that occurred in thethree months ended* September 30, 2023*.

As of* September 30, 2024*, the Company determined that the estimated fair value of debtwas approximately $1.1 million. The fair value of debt was estimated using market rates the Company believes would be available for similar types of financial instruments and represents a Level2 measurement.

The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, approximate fair value due to the relatively short period to maturity for these instruments.

Related Parties

The Company follows Accounting Standards Codification ("ASC")850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. See further discussion in Note6 below on this matter.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax basis of reported assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company must then assess the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely thannot that some portion or all of a deferred tax asset willnot be realized. As of* September 30, 2024* and* March 31, 2024* the Company determined a full valuation allowance was required to offset its deferred tax assets as a result of recurring operating losses.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC740-10 which prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken, or expected to be taken, on its tax return. The Company evaluates and records any uncertain tax positions based on the amount that management deems is more likely thannot to be sustained upon examination and ultimate settlement with the tax authorities in the tax jurisdictions in which it operates. As of* September 30, 2024* and* March 31, 2024* the Company hadno uncertain tax positions.

The Company doesnot expect to pay any significant federal, state, or foreign income taxes in our fiscal year2025 (ending* March 31, 2025)as a result of the losses recorded during thethree* months ended* June 30, 2024and the additional losses expected for the remainder of our fiscal year2025* and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely thannot” that some component or all of the benefits of deferred tax assets willnot be realized.

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The Company recordedno income tax provision for thethree andsix months ended* September 30, 2024and2023*, respectively. The effective tax rate for thethree andsix months ended* September 30, 2024and2023* iszero. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year whereno tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.

Stock-based Compensation

Employee and non-employee share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. For awards with a performance condition, compensation expense is recognized over the requisite service period if it is probable that the performance condition will be satisfied. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the Company had paid cash for the goods or services. The Company estimates the fair value of options and equity classified warrants granted using an options pricing model. Expense is recognized within general and administrative expenses and forfeitures are recognized as they are incurred.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC480, Distinguishing Liabilities from Equity (“ASC480”) and ASC815, Derivatives and Hedging (“ASC815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC480, meet the definition of a liability pursuant to ASC480, and whether the warrants meet all of the requirements for equity classification under ASC815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that donot meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants is estimated using a Black-Scholes pricing model or a Monte Carlo simulation.

Loss Per Common Share

Basic loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. Generally, the Company’s outstanding warrants are non-participating securities as they arenot entitled to non-forfeitable rights to dividends or dividend equivalents during the vesting term and haveno obligation to fund losses.

However, the warrants described in Note2 are participating securities as they receive a right to dividends, but they arenot obligated to fund losses. In periods of loss, sinceno income is allocated to these securities, the Company's use of the "treasury stock method" derives the same result. The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted calculation for the entire period being presented.

For thesix months ended* September 30, 2024and2023*, dilutive securities that werenot included in the calculations of the loss per common share because they would be anti-dilutive included the following:

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Research and Development Costs

Research and development costs are expensed as incurred.

Advertising

It is our policy to expense advertising costs as incurred. Advertising expenses are included within general and administrative expenses within the statement of operations. For thethree andsix months ended* September 30, 2024*, the Company recorded less than $0.1 million, respectively, of advertising expenses. For thethree andsix months ended* September 30, 2023* , the Company recorded less than $0.1 million, respectively, of advertising expenses.

Fair Value of Common Stock

Prior to establishing a public market for the Company’s common stock, the estimated fair value of the Company’s common stock was determined by the Company’s board of directors as of the date of each option grant, with input from management, considering the Company’s most recently availablethird-party valuations of common stock, recent sales of common stock tothird parties, and the Company’s board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which* may*have changed from the date of the most recent valuation through the date of the grant.

JOBS Act Accounting Election

The Company qualifies as an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of2012 (the “JOBS Act”). The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has electednot to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This* may*make comparison of the Company’s financial statements with another public company which is neither an early-stage company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Segments

The Company currently operates inone reportable segment based on management’s view of its business for purposes of evaluating performance and making operating decisions. Based upon this business model, the Company’s Chief Executive Officer, whom the Company has determined to be its chief operating decision-maker, reviews financial information asone operating segment.

Recent Accounting Pronouncements

In* December 2023,the FASB issued ASU2023*-09, “Income Taxes (Topic740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company’s fiscal years beginning after* December 15, 2024,with early adoption permitted. The Company doesnot* expect the adoption of this standard to have any material impact on its financial statements.

The Company doesnot believe that any recently issued effective pronouncements, or pronouncements issued butnot yet effective, if adopted, would have a material effect on the accompanying financial statements.

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Correction of an Immaterial Error in the Prior Period Financial Statements

During thefourth quarter of fiscal2024 (* March 31, 2024),the Company determined that the prior year financial statements had an error caused by an immaterial classification error of certain research and development expense in accordance with ASC730* Research and Development Costs. As a result, certain prior year amounts have been revised for consistency with the current year presentation. The Company assessed the materiality of this change in presentation on prior period financial statements in accordance withSEC Staff Accounting BulletinNo.* 99*, “Materiality,” (ASC Topic250,* Accounting Changes and Error Corrections*). Based on this assessment, the Company concluded that these classification error corrections in its Statements of Operations arenot material to any previously presented financial statements based upon overall considerations of both quantitative and qualitative factors. The corrections hadno impact on the fiscal year2023 Balance Sheet, Statements of Cash Flows, or Statement of Changes in Stockholders’ Equity. Further, the immaterial corrections didnot result in a change in operating losses, net loss, or basic or diluted earnings per share in the Income Statement.

A summary of immaterial corrections reflecting the prior period impact to the Company’s Statement of Operations, for thethree andsix months ended* September 30, 2023* is shown below (in thousands):

Note2 – Warrant Liability and Fair Value of Financial Instruments

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. While the Company believes that its valuation methods are appropriate, the Company recognizes that the use of different methodologies or assumptions to determine the fair value could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values are the probability weighting of the different settlement outcomes used.

There wereno outstanding instruments classified as Level3 measurements as of* September 30, 2024or March 31, 2024.*

The following table summarizes the activity of the Level3 fair value measurements during the period end* September 30, 2023 (*in thousands):

The Company recognized the initial warrant expense as a component of operating expenses on the condensed statement of operations underwarrant expense–* termination agreementfor $4.6 million and the changes in the fair value underwarrant liability*–* mark-to-marketfor $0.2 million. There wereno* changes to the valuation approaches or techniques used for Level3 measurements.

Warrant Liabilities

As more fully detailed inNote6* – Related Party Transactions*, on* July 7, 2023,the Company entered into an Exclusive License Termination Agreement (the “Termination Agreement”) with a licensee in exchange for the issuance, upon the closing of the Company’s IPO withinone* year of the agreement’s execution, of a warrant to purchase shares of the Company for a variable number of shares.

The fair value of the warrant liability has been estimated using a discounted cash flow model under various scenarios and used the probability-weighted expected return method (“PWERM”) comparing the probabilities of different outcomes. The outcomes considered included (i) the closing of a qualified financing as part of the Company’s IPO at various points in time and (ii) the possibility of default whereby the licensee receives nothing. Key assumptions for the model were as follows for the initial measurement:

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Note3 – Convertible Notes Payable

On* September 9, 2023,the Company's Board of Directors (the “Board”) authorized an offering up to $2.0 million in unsecured, non-interest bearing convertible promissory notes (the “Notes”) and accompanying warrants (the “Bridge Financing Warrants”) (collectively, the “Bridge Offering”) that will mature on December 31, 2025.*The Notes provided that, on the closing date of the IPO, the outstanding principal would be automatically converted into common stock at the conversion price of $40.00. Each dollar in principal amount of Notes purchased were accompanied by afive-year Bridge Financing Warrant to purchase approximately 0.0125 shares of Common stock with an exercise price of $20.00 per share. The Company records the Bridge Financing Warrants as a discount to the Notes.

The Bridge Financing Warrants can be exercised from the date of Notes issuance through thefive-year anniversary of the issuance of the Notes. The shares issuable pursuant to the Notes and Bridge Financing Warrants have a 180-day lock-up after the Company’s IPO. Thereafter, the foregoing lock-up agreement will cease to apply to 25% of the purchased shares each month for a period offour months. The Note holders arenot permitted to convert their Notes when the holders or any of their affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion.

As of* September 30, 2023,*the Company received proceeds of $350,000, of $1.2 million of Notes executed from the Bridge Offering, which would convert into 8,750 shares of common stock.

As of* September 30, 2024*, the Company received proceeds of $2.0 million of Notes executed from the Bridge Offering, which would convert into 50,000 shares of common stock. The Company’s effective interest rate for the Notes is 15.3% due to the amortization of the discount stemming from the issuance of the Bridge Financing Warrants. On* January 26, 2024,we consummated our initial public offering (“IPO”). In connection with the closing of the IPO, a portion of our convertible notes were converted into 16,750 shares of our common stock. Upon the closing of the IPO, certain notes were to be automatically converted according to their terms into our common stock to the extent and provided that certain holders of these notes arenot* permitted to convert such notes to the extent that the holders or any of its affiliates would beneficially own in excess of 4.99% of our common stock after such conversion. Due to this 4.99% limitation, principal representing $1.3 million, or 33,250 shares, of these notes remains outstanding.

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The table below summarizes the Company’s outstanding convertible notes payable as of* September 30, 2024* (in thousands).

Warrants

The Company issued the Notes with detachable warrants for the purchase of shares of the Company’s common stock. The Company utilized a Monte Carlo simulation model to determine the fair value of each Bridge Offering Warrant. The key inputs to the Monte Carlo simulation used to determine the fair value of each warrant include, the Company’s stock price fair value which was determined through a back solve calculation such that the stock price results in the average total value of the Notes and the Bridge Offering Warrants being equal to the cash proceeds received, volatility based on a selection of publicly held peer companies of 101.88%, expected term of 5 years, risk free rate of 4.40%, discount rate of 20.00% and a discount for lack of marketability of 15.77%.

During thethree andsix months ended* September 30, 2024*, the Company recorded less than $0.1 million in interest expense, respectively, related to the amortization of the debt discount. Due to the timing of the receipt of proceeds, the Company didnot incur interest expense during thethree andsix months ended* September 30, 2023.*

The following table presents a summary of activity for the warrants issued in connection with the Company’s Notes:

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Note4 – Equity

On* January 26, 2024,*we consummated our IPO. In the IPO, we sold a total of 111,962 shares of common stock at a purchase price of $100.00 per share for gross proceeds of $11.2 million and net proceeds of $9.8 million. In connection with the closing of the IPO, a portion of our convertible notes were converted into 16,750 shares of our common stock.

On* November 29, 2023,*the Company’s Board of Directors and applicable shareholders approved to amend and restate the Company’s certificate of incorporation and increased the authorized shares to 500,000,000 shares of common stock, with a par value of$0.001 per share, and 10,000,000 shares of preferred stock, with a par value of $0.001 per share. The specific rights of the preferred stock shall be determined by the Board of Directors.

Restricted Stock

On* February 15, 2024,*the Company issued 1,750 restricted shares of common stock to the Company's marketing consultant at the closing price of $76.00 of the Company's common stock. The total value of these shares is $133,000. These shares vest monthly over a 12-month period beginning on the issue date.

As of* September 30, 2024*, there was $49,875 of unrecognized stock-based compensation expense related to unvested Restricted Stock, which is expected to be recognized over the period* October 2024through February 2025*

A summary of activity regarding Restricted Stock issued is as follows:

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Common Stock

On* April 6, 2023,the Board of Directors approved a private placement offering of up to 100,000 common shares at a price of $40.00 per share. During thethree* months ended* June 30, 2023,*the Company sold 71,001 shares for cash proceeds of $2,840,000. The Company didnot incur any costs that were direct and incremental to the private placement.

On* September 9, 2023,the Board approved a Bridge Offering. See Note3* Convertible Notes Payable for additional detail as these notes are convertible into common stock.

Stock Plan and Stock Options

In* June 2023,*the Company adopted, and the Company’s shareholders approved, the Autonomix Medical, Inc.2023 Stock Plan (the “Plan”). The Plan is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards and stock unit awards to key employees, non-employee directors, and consultants, subject to certain individual threshold limitations. The Plan provides for up to 200,000 shares to be issued. Shares that are surrendered because of forfeiture, expiration, termination, or cancellation are available for re-issuance.

In* August 2023,the Plan was amended to allow for an automatic increase of the available shares for issuance, whereby on the1st* of each fiscal year, beginning on* April 1, 2024and ending on (and including) April 1, 2033in an amount equal tofive* percent (5%) of the total number of shares of Common Stock outstanding on the* March**31st* immediately preceding the applicable date. However, the Board* mayact prior to the automatic increase of a given year to provide that there will beno* increase for such year, or that the increase for such year will be a lesser number of shares of Common Stock. On* April 1, 2024,*the Plan was increased by 47,116 shares.

The following table summarizes the stock option activity for thesix months ended* September 30, 2024*:

During thesix months ended* September 30, 2024*, the Company granted certain individuals options to purchase shares of common stock with a contractual term that vests annually over four years on the anniversary date. The options had an aggregate grant date fair value of $2.6 million that was calculated using the Black-Scholes option pricing model. Variables used in the Black-Scholes option pricing model included the following: (1) fair value of common stock on the measurement date; (2) discount rate ranging from 4.25% to 4.39% based on the daily yield curve rates for U.S. Treasury obligations, (3) expected life ranging of 6.25 years based on the simplified method (vesting plus contractual term divided bytwo) and (4) expected volatility ranging from 110% to 130% based on the historical volatility of comparable companies' stock.

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All options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at* September 30, 2024* was $5.0 million. During thethree andsix months ended* September 30, 2024*, the Company recorded stock-based compensation - option expense of $0.4 million in general and administrative expense and less than $0.1 million in research and development expense, respectively and $0.6 million in general and administrative expense and less than $0.1 million in research and development expense, respectively. During thethree andsix months ended* September 30, 2023*, the Company recorded stock-based compensation - option expense of $0.2 million in general and administrative expense.

License Agreement

On* July 10, 2024,we entered into a license agreement (the “Agreement”) with RF Innovations, Inc. (“RFI”), a privately held medical technology company, to license products utilizing RFI’s intellectual property related to its Apex6* Radiofrequency Generator (the “Licensed Products”). The Apex6 Generator is a United States Food and Drug Administration (“FDA”) cleared ablation technology designed to lesion neural tissue for pain management in the peripheral nervous system. Pursuant to the Agreement, RFI granted us a perpetual non-exclusive worldwide royalty free fully paid license related to the Licensed Products, provided that the license didnot include the right to sell certain products to customers for the treatment of spine pain. In connection with the Agreement, we issued RFI 12,500 unregistered shares of our common stock as consideration for the license. The Company determined that the fair value of the shares granted was $0.1 million, which represented its stock price on the date of the Agreement less a 25.6% of less than $0.1 million for a discount for lack of marketability (“DLOM”). The Company concluded a discount for lack of marketability was appropriate as the shares are subject to an initial lock-up period ofsix-months until they are eligible for registration pursuant to SEC Rule144 followed by restrictions that allow for a maximum of 10% of total shares to be sold within a30-day period. The DLOM effectively reflects the value of an average strike put option relative to our stock price and was calculated based on the Finnerty average put model. The Company concluded that the licensed technology qualified as a research and development expense pursuant to ASC Topic730, Research and Development, as the Company doesnot have an alternative future use for the technology and the Company doesnot have a plan to otherwise monetize the Licensed Products. The Company recognized $0.1 million in Research and Development expense in its condensed consolidated statement of income for thethree andsix-months ended* September 30, 2024.*The Agreement provides RFI the right to terminate the license if we breach any representation, warranty or covenant contained in the Agreement, subject to any relevant cure periods, or if we are subject to a bankruptcy or insolvency event.

Equity-Based Stock Warrants

The Company will periodically grant warrants to investors in connection with equity financing or tothird-party service providers in exchange for services rendered. The following table summarizes the stock warrant activity for thesix months ended* September 30, 2024*:

The unrecognized compensation expense at* September 30, 2024* was $0. During thethree andsix months ended* September 30, 2024and2023*, the Company recorded stock-based compensation - warrant expense of less than $0.1 million.

Note5 – Commitments and Contingencies

Legal Proceedings

From time to time, we* may*be involved in claims that arise during the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we donot currently have any pending litigation to which we are a party or to which our property is subject that we believe to be material. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting our overall operations.

Employment Agreements

We have agreements with key employees to provide certain benefits, including salary and other wage-related benefits, in the event of termination. In addition, the Company has adopted a severance policy for certain key members of executive management to provide certain benefits, including salary and other wage-related benefits, in the event of termination. In total, these benefits would amount to a range of $1.1 million to $1.6 million using the rate of compensation in effect at* September 30, 2024*.

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Brad Hauser - Chief Executive Officer

On* June 17, 2024,we entered into an employment agreement with Brad Hauser pursuant to which Mr. Hauser agreed to serve as our chief executive officer and president for an initial three-year period, which maybe extended on a year-to-year basis. Mr. Hauser’s agreement provides for an initial annual base salary of $450,000 (subject to an annual review and increase at the discretion of our Compensation Committee) and a target annual bonus of 60% of his base salary. Pursuant to the agreement, Mr. Hauser was granted aten-year option (the “Inducement Options”) to purchase 45,000 shares of common stock at an exercise price equal to the closing price of our common stock on the date of the employment agreement. The option vests infour* equal annual installments (or 11,250 shares each installment) on each of the succeedingfour anniversary dates of the execution of the employment agreement, provided Mr. Hauser is employed by us on each vesting date. In the event of a “change of control” or the termination of the agreement by us without “cause” or by Mr. Hauser for “good reason,” all of the unvested options shall immediately vest. The Inducement Options were granted outside of our2023 Stock Plan as an inducement material to Mr. Hauser’s entering into employment with us in accordance with Nasdaq Stock Market Listing Rule5635(c)(4). Commencing with the year ending* March 31, 2025,*Mr. Hauser will be eligible to receive annual option grants as determined by the Compensation Committee of the Board of Directors, based on criteria established by the Compensation Committee. The number of shares underlying the target annual option grant will be equal to $1,000,000 divided by the Black-Scholes value per share of our common stock on the date of grant.

If Mr. Hauser’s employment is terminated at our election without “cause,” or by Mr. Hauser for “good reason,” Mr. Hauser shall be entitled to receive severance payments equal totwelve months of Mr. Hauser’s base salary and 100% of the target bonus for the year in which such termination occurs; provided that such amounts shall be increased by 50% if Mr. Hauser’s agreement is terminated without “cause” or by Mr. Hauser for “good reason” withinthree months prior to ortwelve months after a “change of control.” In the event that any payments or benefits provided to Mr. Hauser would trigger the excise tax under Section4999 of the Internal Revenue Code or any similar provision, the Company agreed to provide Mr. Hauser with a gross-up payment to ensure that, after payment of all taxes (including the excise tax, federal, state, and local income taxes, and employment taxes) imposed on the gross-up payment, Mr. Hauser receives a net amount equal to the payments or benefits Mr. Hauser would have received if the excise tax didn't apply

Lori Bisson -Vice Chair (former Chief Executive Officer)

On* June 17, 2024,we entered into an employment agreement with Lori Bisson pursuant to which Ms. Bisson agreed to serve as our Executive Vice Chair and Strategic Adviser to the Chief Executive Officer (“Vice Chair”) for atwo-year period. Ms. Bisson’s agreement provides for an initial annual base salary of $150,000 (subject to an annual review and increase at the discretion of our Compensation Committee) and a target annual bonus of 50% of her base salary. Pursuant to the agreement, Ms. Bisson continued to vest in the option grants issued to Ms. Bisson in her role as chief executive officer and president in accordance with the vesting schedule set out in her initial employment agreement. In the event of a “change of control” or the termination of the agreement by us without “cause” or by Ms. Bisson for “good reason,” all of the unvested options shall immediately vest. Ms. Bisson is entitled to receive any compensation, including incentive compensation, for the fiscal year ended March 31, 2024that hasnot* been paid as of the date of the agreement. Commencing with the year ending* March 31, 2025,Ms. Bisson will be eligible to receive annual option grants as determined by the Compensation Committee of the Board of Directors, based on criteria established by the Compensation Committee. Ms. Bisson agreed to waive any severance payments due to her in connection with the termination of the prior employment agreement that we entered into with her on June 30, 2023.*

Note6 – Related Party Transactions

The Company utilizes a consulting firm that is owned by the Company’s former Chief Financial Officer to provide accounting and financial reporting services and pays certain expenses on behalf of the Company. For thethree andsix months ended* September 30, 2024and2023* , the Company incurred fees of $0 and less than $0.1 million, respectively for both periods, excluding officer compensation. As of* September 30, 2024* and* March 31, 2024*, the Company owed the consulting firm $0 and less than $0.1 million, respectively, for services and expenses.

As of* September 30, 2024*, members of the Company’s management/Board and an immediate family member of the Company’s management (related party), collectively purchased $0.5 million ($0.4 million and $0.1 million, respectively) of the Bridge Offering.

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On* December 21, 2021,the Company entered into a perpetual, worldwide, exclusive license agreement (the “License” or “License Agreement”) with a company controlled by a significant stockholder of the Company (the “Licensee”). The License allows the Licensee to use certain intellectual property and technology related to the diagnosis and treatment of cardiovascular conditions held by the Company. Upon90* days following the completion of an initial public offering or special purpose acquisition company transaction, the Licensee* may*enter into sublicenses of the licensed intellectual property and technology.

On* July 7, 2023,the Company and the Licensee entered into an Exclusive License Termination Agreement (the “Termination Agreement”) in exchange for the issuance, upon the closing of the Company’s initial public offering withinone* year of the agreement’s execution, of a warrant to purchase shares of the Company for a variable number of shares. The variable number of shares issued was based upon a fixed value of $8.0 million divided by the price per share in the offering. The warrants were exercisable at a price of $0.02 per share and* may*be exercised any time after the issuance date, subject to a beneficial ownership limitation, and expired five years from the original issuance. The warrants provided voting rights, dividend rights, and other rights of a shareholder prior to exercise. The shares underlying the warrant were subject to a lockup agreement for a period ofsix months after the closing of the offering with respect to 12.5% of the shares issued andtwelve months after the closing of the offering for the remainder of the shares.

On* January 29, 2024,we issued a warrant to purchase 80,000 shares (the “Warrant”) pursuant to the Termination Agreement with Impulse Medical, Inc. ("Impulse"). which replaced the July 2023warrants.* The warrants are exercisable at a price of $0.02 per share and* maybe exercised any time after the issuance date, subject to a beneficial ownership limitation, and expires five years from the original issuance. The warrants provide voting rights, dividend rights, and other rights of a shareholder prior to exercise. The shares underlying the Warrant are subject to a lockup agreement for a period ofsix* months after the closing of the IPO with respect to 12.5% of the shares issued andtwelve months after the closing of the IPO for the remainder of the shares. In connection with the Termination Agreement, the Company agreed to register the resale of the shares of common stock underlying the Warrant upon a notice of20 business days by the Warrant holder.

The completion of the Company’s IPO fixed the number of warrant shares issuable and the Company re-classified the Warrant to additional-paid in capital as it met the requirements for equity classification. Upon reclassification, the Company valued the warrant at $8.0 million, which represented the fair value of the shares issued on that date.

Note7 – Subsequent Events

See Note1 - Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies - "Reverse Stock Split."

On* November 1, 2024,the Company received notice from the Depository Trust and Clearing Corporation ("DTCC") on behalf of the brokerage firms that hold the shares of Company common stock held in “street name” that in connection with the foregoing rounding of shares the Company would need to issue 271,846 shares of common stock. Prior to the Company's required announcement regarding the Reverse Stock Split on October 22, 2024,the Company estimates there were approximately 4,800 shareholders of record. The Company doesnot* believe the number of shares being requested is correct based on the historical number of shareholders of its common stock and is aware of similar occurrences in recent months for other companies completing a Reverse Stock Split. As such, the Company has begun an inquiry into the calculations set forth in the request. During the pendency of this inquiry, the Company doesnot intend to issue any shares in connection with the fractional shares being requested.

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