Neuraxis, INC Liquidation Value

Neuraxis, Inc. (NRXS) is a pre-profitability medical device company with a single commercial product (IB-Stim, a PENFS device for pediatric functional abdominal pain) and a going-concern qualification. Under a liquidation lens as of March 31, 2026, recovery to equity is marginally positive on paper but functionally fragile given the liability structure and near-zero tangible asset base.

Liquidation asset reconstruction: Cash of $7.08M recovers at 100% ($7.08M). Net accounts receivable of $385K (net of $7K allowance) recovers at 90-95% (~$350-365K). Inventory of $238K recovers at 60% (~$143K). PP&E gross $382K less $315K accumulated depreciation yields net $68K, recovering at 50-70% (~$34-47K). ROU asset ($245K) has no standalone liquidation value. Intangibles ($266K net, primarily patents and related assets) recover at 0%. Other non-current assets ($23K) are largely deferred offering costs and security deposit, recovering at near-face for the deposit ($20K). Total estimated liquidation asset pool: approximately $7.63-7.67M.

Liquidation liability stack at face value: Current liabilities of $2.81M include accrued expenses of $2.26M (of which $1.23M is accrued compensation and benefits, $529K is the Bhambhani litigation settlement payable in installments, $100K is an NSS-2 bridge lease termination fee, and $67K is accrued interest), accounts payable of $305K, operating lease current portion $69K, and notes payable current $101K. Non-current liabilities add $184K operating lease and $48K warrant liability. Total face-value liabilities: approximately $3.00M. Series B Preferred Stock carries a liquidation preference; 3,796,907 shares outstanding with $1.22M in undeclared cumulative dividends as of March 31, 2026. The preferred stock liquidation preference (at par plus accrued dividends) represents a senior claim on equity proceeds, estimated at approximately $1.22M+ depending on conversion terms.

Imputed equity recovery before preferred preference: ~$7.65M assets minus ~$3.00M liabilities = ~$4.65M. After deducting approximately $1.22M in accrued preferred dividends that would crystallize on liquidation, residual to common is roughly $3.4M against a GAAP book equity of $5.75M. The MFFAIS CLV/LLV figures ($3.8M/$4.2M) are broadly consistent with this framework. Key risks to recovery: (1) accrued compensation of $1.23M may face acceleration clauses; (2) the executive employment agreements contain deferred bonus and gross-up provisions totaling up to $6.2M incremental contingent liability that management has not yet recorded as probable — this is the largest off-balance-sheet recovery risk; (3) a patent dispute with Dr. Arturo Taca asserting a $2M interest in U.S. Patent No. 10,413,719 remains unresolved; (4) $43.2M federal and $41.2M state NOL carryforwards have zero liquidation value.

Q1 2026 vs. December 31, 2025 changes: Cash increased from $4.97M to $7.08M, driven by $2.99M ATM equity raise and $507K warrant exercise proceeds, partially offset by $1.23M operating cash burn. Accrued liabilities declined modestly ($2.39M to $2.26M) as litigation settlement payments commenced. Working capital surplus expanded from $2.94M to $5.33M, primarily equity-issuance-driven. Total assets rose from $6.40M to $8.75M. The filing discloses that disclosure controls remain ineffective due to four identified material weaknesses, an ongoing concern since prior periods.