v3.26.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2026
Related Party Transactions [Abstract]  
Related Party Transactions

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 $506,400, with interest calculated monthly based on applicable federal rates. No payments have been received on the notes. Since repayment is not assured, the Company has fully reserved for the entire balance of principal and interest. The current allowance is $1,250,388 and $1,241,559 as of March 31, 2026 and December 31, 2025, respectively. The current loan balances are as follows:

 

   March 31, 2026   December 31, 2025 
   Loan   Interest   Interest   Loan   Interest   Interest 
   Receivable   Receivable   Income   Receivable   Receivable   Income 
Shareholder 1  $506,400   $118,861   $4,414   $506,400   $114,447   $20,096 
Shareholder 2   506,400    118,727    4,414    506,400    114,312    20,096 
Principal balance   1,012,800    237,588    8,828    1,012,800    228,759    40,192 
Allowance for collection risk   (1,012,800)   (237,588)   (8,828)   (1,012,800    (228,759)   (40,192)
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:

  

              Interest &     
      Interest   Loan   Service Fee   Interest 
March 31, 2026  Due Date  Rate   Balance   Accrued   Paid 
Other Convertibles  Various   5.0%   —    66,648    — 
Total          $—   $66,648   $— 

 

              Interest &     
      Interest   Loan   Service Fee   Interest 
December 31, 2025  Due Date  Rate   Balance   Accrued   Paid 
Other Convertibles  Various   5.0%   —    66,648    — 
Total          $—   $66,648   $— 

 

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 $20,000 for the year ending December 31, 2026. License costs totaled $453 and $1,317 for the three months ended March 31, 2026 and 2025, respectively. The Company owed the limited liability company $453 and $0 that are included in accounts payable in the Condensed Balance Sheets as of March 31, 2026 and December 31, 2025, respectively.

 

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 $20,000 for the year ended December 31, 2026. The Company sold NeuroStim devices totaling $1,515 and $1,957 for the three months ended March 31, 2026 and 2025, respectively, under this program.