| Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies | Note 1 – 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. Going Concern The Company is an early-stage company and has
not generated any revenues to date. As such, the Company is subject to all the risks associated with early-stage and emerging growth companies.
Since inception, the Company has incurred losses and negative cash flows from operating activities. The Company does not expect to generate
positive cash flows from operating activities in the near future. For the nine months ended December 31, 2023
and 2022, the Company incurred net losses of $ 10 1.3 4.4 1.2 33.6 0.7 million 1.2 million On January 26, 2024, the Company consummated its
initial public offering (“IPO”). In the IPO, the Company sold a total of 2,234,222 5.00 11.2 million 9.8 million 0.3 million 335,000 18,687,061 1.3 million 665,000 The Company estimates its current cash resources,
including the approximately $9.8 million of net proceeds from the IPO is sufficient to fund its operations into but not beyond the first
calendar quarter of 2025. 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 is no 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. 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 do not include all
the information and notes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”)
for complete financial statements. The Company’s fiscal year end is March 31 st 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 but not yet billed by contract manufacturers, engineers and research organizations,
the valuation of equity related instruments, initial and recurring fair value measurements for the warrant liability and the valuation
allowance related to deferred taxes. 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 of three months or less at the date of acquisition to be cash equivalents. Periodically, the Company may
carry cash balances at financial institutions in excess of the federally insured limit of $250,000. The Company has not 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 is not significant. Deferred Offering Costs Offering costs consist of professional costs incurred
through the balance sheet date that are direct and incremental related to the Company’s anticipated initial public offering. These
costs, together with the selling agent fees, were reclassified to additional paid-in capital upon completion of the Company’s initial
public offering on January 26, 2024. Costs associated with salaries and other period costs were expensed as incurred. 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
statement of operations. The
Company’s debt is carried on the condensed balance sheet on a historical cost basis net of unamortized discounts and premiums because
the Company has not 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 sheet 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 statement 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. 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 a three-level valuation
hierarchy for disclosures of fair value measurements, defined as follows: Level 1 – inputs to the valuation methodology
are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – 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 instruments. Level 3 – inputs to the valuation methodology
are unobservable and significant to the fair value and require significant judgment and estimation. 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 ASC
850, Related Party Disclosures 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 than not that some portion or all of a deferred
tax asset will not be realized. As of December 31, 2023 and March 31, 2023 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 Accounting Standards Codification (“ASC”) 740-10 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 than not to be sustained upon
examination and ultimate settlement with the tax authorities in the tax jurisdictions in which it operates. As of December 31, 2023 and
March 31, 2023 the Company had no uncertain tax positions. 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. 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. The Company’s outstanding warrants are non-participating securities as they are not entitled
to non-forfeitable rights to dividends or dividend equivalents during the vesting term and have no obligation to fund losses. 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 the three and nine months ended December
31, 2023 and 2022, dilutive securities that were not included in the calculations of the loss per common share because they would be
anti-dilutive included the following:
Schedule of Antidilutive Securities
December 31,
2023 2022
Equity based warrants to purchase common shares 5,914,929 6,569,929
Convertible Notes - common shares (1) 1,000,000 –
Convertible Notes - equity-based warrants to purchase common
shares 500,000 –
Termination agreement - equity-based warrants to purchase common
shares (2) 1,600,000 –
Stock options granted under Company's incentive plan 1,703,600 –
Total potentially dilutive securities 10,718,529 6,569,929 __________________
(1) Shares for the convertible note proceeds received as of December 31, 2023
(2) Shares are based on estimated initial public offering price of $5.00 Research
and Development Costs Research and development costs are expensed as
incurred. 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 available
third-party valuations of common stock, recent sales of common stock to third 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 of 2012 (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 elected not 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
in one 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 as one operating segment. Recent
Accounting Pronouncements The Company does not believe that any recently
issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying
financial statements. |
