11. Stock-Based Compensation

Restricted Stock Units

Pursuant to the NeurAxis, Inc. 2022 Omnibus Securities and Incentive Plan, the Company initiated grants of restricted stock units (“RSUs”) to certain employees as follows:

 Schedule of Restricted Stock Units

Of the RSUs granted during the six months ended June 30, 2026, 437,431 are subject to a pro rata annual vesting period over three years and 40,000 immediately vested whereas the RSUs granted during the six months ended June 30, 2025 are subject to a three-year cliff vesting period. The RSUs are payable in shares of the Company’s common stock and fully vest upon (i) death or disability or (ii) change of control. Dividend equivalents accrue on RSUs and are paid upon vesting; there were no accrued dividends on unvested RSUs as of June 30, 2026.

Total stock-based compensation expense related to RSUs is classified in the Company’s Condensed Statements of Operations as (i) selling expenses totaling $67,566 and $30,859 for the three months ended June 30, 2026 and 2025, respectively, and $129,022 and $51,143 for the six months ended June 30, 2026 and 2025, respectively, and (ii) general and administrative expense totaling $552,304 and $142,183 for the three months ended June 30, 2026 and 2025, respectively, and $782,953 and $227,710 for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, total unrecognized stock-compensation expense relating to unvested stock awards granted under the Company’s share-based compensation plans amounted to $2,544,703.

Stock Options

The following is a summary of the Company’s outstanding stock options as of June 30, 2026 and December 31, 2025:

 Schedule of Stock Option Activity

On April 9, 2026, the Company’s Board of Directors approved the cancelation of 1,319,394 stock options issued under the 2017 Innovative Health Solutions, Inc. Stock Compensation Plan and the grant of an equivalent amount of RSUs with immediate vesting under the NeurAxis, Inc. 2022 Omnibus Securities and Incentive Plan which was approved by the Company’s shareholders on June 10, 2026. The stock option cancelation and RSU grant will be treated as a modification under ASC 718, Compensation—Stock Compensation, whereby the Company will recognize incremental compensation cost as the excess of the fair value of the granted RSUs over the fair value of the stock options upon the exchange on July 24, 2026. The Company estimates $3,400,000 of incremental compensation cost will be recorded upon execution of the stock option cancellation and RSU grant agreements.

There was no stock-based compensation expense related to stock options recorded for the three and six months ended June 30, 2026 and 2025.

Employee Stock Purchase Plan

On July 1, 2025, the Compensation Committee of the Board of Directors (“Board”) of the Company adopted the NeurAxis, Inc. 2025 Employee Stock Purchase Plan (the “ESPP”) subsequently approved by the Shareholders on June 10, 2026. The purpose of the ESPP is to provide eligible employees an opportunity to acquire common stock of the Company at a 15% discount using payroll deductions. The maximum number of shares of the Company’s common stock that may be issued under the ESPP is 100,000, subject to an annual increase on January 1st of each year from 2026 through 2035 by the lesser of (i) 1% of the Company’s outstanding capital stock as of the prior December 31st or (ii) 100,000 shares. The Board may reduce or eliminate this annual increase before February 1st of any given year. Total stock-based compensation expense related to the ESPP is classified in the Company’s Condensed Statements of Operations as (i) selling expenses totaling $7,008 and $0 for the three months ended June 30, 2026 and 2025, respectively, and $15,421 and $0 for the six months ended June 30, 2026 and 2025, respectively, and (ii) general and administrative expense totaling $12,925 and $0 for the three months ended June 30, 2026 and 2025, respectively, and $41,841 and $0 for the six months ended June 30, 2026 and 2025, respectively. Employee withholdings of $53,214 and $13,611 are included in accrued expenses in the Condensed Balance Sheets as of June 30, 2026 and December 31, 2025, respectively.