Neuraxis, Inc. (NYSE American: NRXS), a Delaware-based company specializing in electromedical and electrotherapeutic apparatus, announced on Thursday significant changes to its corporate structure and shareholder rights.
The company filed an amendment with the Secretary of State of Delaware on November 15, 2024, which includes an increase in the authorized number of Series B Preferred Stock, an extension of dividend rights, and amendments to voting rights.
Specifically, the amendment increases the number of shares designated as Series B Preferred Stock from 4,000,000 to 5,000,000. This expansion allows for additional preferred shares to be issued, potentially providing the company with a means to raise capital or restructure existing equity.
Further, Neuraxis has extended the right to dividends on the Series B Preferred Stock at an annual rate of 8.5% by an additional 18 months, now set to end on December 31, 2026, instead of the previously established date of June 30, 2025. This extension provides holders of Series B Preferred Stock with an extended period to earn dividends at the stated rate.
Additionally, the voting rights of the Series B Preferred Stock have been revised. Each holder of Series B Preferred Stock is now entitled to votes equivalent to the number of shares of Common Stock into which their Series B Preferred Stock is convertible, based on a conversion price of $3.80.
These changes are detailed in the Amendment No. 1 to the Certificate of Designation of Preferences, Rights, and Limitations of Series B Preferred Stock, which is incorporated by reference into this report and is accessible in the company's filings.
The implications of these amendments for Neuraxis and its investors are multifaceted, potentially affecting the company's capital structure and the influence preferred shareholders may exert. The adjustments to the corporate governance and financial rights of security holders reflect strategic decisions by the company's management.
Neuraxis's business address is located at 11611 N. Meridian St, Suite 330, Carmel, IN 46032, and the company can be reached by phone at (812) 689-0791.
This report is based on a press release statement and the information provided is intended to comply with the requirements of the Securities Exchange Act of 1934.
In other recent news, Neuraxis, Inc. has made several significant financial developments. The company secured approximately $5 million through the sale of 2,100,840 shares of Series B Convertible Preferred Stock to a group of related investors. The company also revised its securities purchase agreement with Flagstaff International, LLC, reducing the total investment amount to $1.8 million.
Neuraxis has also been active in issuing Series B Convertible Preferred Stock to accredited investors, following stockholder approval. This strategic move allows the company to raise capital while providing investors a potential upside.
The annual meeting held by Neuraxis saw shareholders approving key proposals, including the election of directors, the appointment of Rosenberg Rich Baker Berman, P.A. as the company's independent registered public accounting firm, and the authorization of "blank check" preferred stock.
Furthermore, Neuraxis issued stock awards to its non-employee directors as part of its compensation program. These awards, the first under the company's 2022 Omnibus Securities and Incentive Plan, were fully vested and valued at $12,500 per quarter for a total of $50,000 annually. These are some of the recent developments for Neuraxis, Inc. as disclosed in their SEC filings.
InvestingPro Insights
To complement the recent corporate changes announced by Neuraxis, Inc. (NYSE American: NRXS), InvestingPro data offers additional financial context. The company's market capitalization stands at $28.97 million, reflecting its current market valuation. Despite the recent structural changes, Neuraxis faces financial challenges, as evidenced by its negative P/E ratio of -3.39 over the last twelve months as of Q3 2024.
InvestingPro Tips highlight that Neuraxis is "quickly burning through cash" and "not profitable over the last twelve months," which aligns with the company's efforts to restructure its equity and potentially raise capital through the increased authorization of Series B Preferred Stock. However, the company does boast "impressive gross profit margins," with data showing a gross profit margin of 86.59% in the last twelve months as of Q3 2024.
The extension of dividend rights for Series B Preferred Stock holders until December 31, 2026, is particularly noteworthy given that Neuraxis "does not pay a dividend to shareholders" of common stock, according to InvestingPro Tips. This preference for preferred stockholders may be a strategy to attract investors despite the company's current unprofitability.
Investors considering Neuraxis should note that there are 5 additional InvestingPro Tips available, which could provide further insights into the company's financial health and prospects.
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