Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this Form 10-Q to "we," "us," "its," "our" or the "Company" are to Autonomix Medical, Inc. ("Autonomix"), as appropriate to the context.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See the section titled "Risk Factors" as found in the Annual Report in our Form 10-K filed with the SEC on May 29, 2025, which is available on the SEC's EDGAR website at www.sec.gov, and any updates or amendments to those risk factors subsequently filed with the SEC, for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under "Risk Factors" and elsewhere in this Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make forward-looking statements under the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in other sections of this Form 10-Q. In some cases, you can identify these statements by forward-looking words such as "may," "might," "should," "would," "could," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or "continue," and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described under "Risk Factors" as discussed in the Annual Report in our Form 10-K filed with the SEC on May 29, 2025, and in other filings made by us from time to time with the SEC.

While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Other sections of this Form 10-Q may describe additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations, and we do not intend to do so.

Forward-looking statements include, but are not limited to, statements about:

	•	the success of our ongoing and future clinical trials;
	•	competition from existing products or new products that may emerge;
	•	potential product liability claims;
	•	our dependency on third-party manufacturers to supply or manufacture our future products;
	•	our ability to obtain all parts required to manufacture our devices;

	•	our ability to establish or maintain collaborations, licensing or other arrangements;
	•	our ability and third parties' abilities to protect intellectual property rights;
	•	liquidity and going concern;
	•	our ability to raise additional capital to adequately support future growth;
	•	our ability to attract and retain key personnel to manage our business effectively;
	•	risks associated with our identification of material weaknesses in our control over financial reporting;
	•	natural disasters affecting us, our primary manufacturer or our suppliers;
	•	our ability to establish relationships with health care professionals and organizations;
	•	general economic uncertainty that adversely affects spending on medical procedures;
	•	volatility in the market price of our stock; and
	•	potential dilution to current stockholders from the issuance of equity awards and from future capital raising activities.

We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q in the case of forward-looking statements contained in this Form 10-Q.

Overview

Autonomix Medical, Inc. is a development-stage medical device company pioneering a first-in-class technology platform designed to sense and treat disorders of the nervous system. Our lead system in development is a catheter-based solution that combines diagnostic sensing and therapeutic radiofrequency ("RF") ablation. Initially developed to target intractable pain associated with pancreatic cancer, our platform is intended to provide minimally invasive access to deep neural structures and has the potential to address a wide range of clinical indications, including chronic pain, hypertension, cardiovascular disease, and other nerve-related disorders.

A key differentiator of our technology is its ability to detect neural signals with greater sensitivity than commercially available systems. This performance advantage stems from two core innovations. First, our proprietary antenna array is engineered to capture extremely low-amplitude neural signals that may not be detected by conventional devices. Second, and equally important, our system processes these signals at the point of detection using a proprietary microchip embedded within the catheter. This local signal processing minimizes degradation and noise that typically occur during transmission to external consoles, allowing for high-fidelity, real-time signal capture and interpretation. Together, these capabilities enable more precise identification and targeting of nerve activity and represent a fundamental advancement in transvascular neuromodulation.

Our product development strategy is centered around two integrated functions: diagnostic sensing to identify pathological nerve signals, and therapeutic RF ablation to treat the identified targets. In preclinical animal models, our system has demonstrated the ability to detect signals from specific nerve bundles before ablation and confirm signal termination after ablation. We are now refining the catheter design to meet regulatory and manufacturing standards for human use.

In parallel, we have advanced our clinical strategy. In the second quarter of 2025, we completed our initial first-in-human proof-of-concept study ("PoC 1") evaluating the safety and feasibility of transvascular RF ablation in patients with pancreatic cancer pain. Based on the positive clinical outcomes, we have initiated a follow-on study ("PoC 2") that expands the protocol to include patients with pain associated with additional visceral cancers such as gallbladder, liver, and bile duct, as well as earlier-stage pancreatic cancer patients experiencing moderate to severe pain. This expansion reflects our goal of broadening the platform's utility across oncology, gastroenterology, and other applicable sectors.

As a development-stage company, our technology remains investigational, and there is no guarantee that our clinical trials will produce favorable outcomes or that our products will ultimately receive regulatory approval. One of the most challenging aspects of our commercialization plan will be scaling from our current prototype, which is built using hand-assembled and 3D-printed components, to a fully integrated commercial-grade device. While we have not yet assembled or tested the final commercial version, ongoing development efforts are focused on improving design robustness and manufacturability to support future clinical and commercial deployment.

Recent Developments

In April 2025, we announced the completion of enrollment in our PoC 1, which evaluated the safety and feasibility of the Autonomix Elpis System in patients with late-stage pancreatic cancer experiencing severe pain. Preliminary results demonstrated statistically significant reductions in pain, with responding patients reporting improvement within 24 hours of the procedure and sustained responses observed at 4 to 6 weeks. Among responders, the mean pain reduction reached 59.2%, and 73% and the responders remained opioid-free during follow-up. No device-related serious adverse events were reported. These data supported the clinical potential of our platform and informed the next phase of development.

In May 2025, we received Ethics Committee approval to expand our proof-of-concept study into PoC 2, broadening the clinical focus to include patients with earlier-stage pancreatic cancer as well as those with other visceral cancers, such as gallbladder, bile duct, and liver cancers. This expansion is expected to double the potential addressable market for the platform.

We treated the first patient in the PoC 2 study in June 2025, marking the initiation of this market expansion phase. The study is designed to further evaluate the safety and feasibility of our system across a broader population and generate data to support both regulatory submissions and future commercial adoption.

In parallel, we held a formal pre-submission meeting with the U.S. Food and Drug Administration ("FDA") in May 2025 under the Q-Submission Program to discuss the regulatory requirements for initiating a U.S. clinical study under an Investigational Device Exemption ("IDE"). Based on FDA guidance, we have finalized our Good Laboratory Practices ("GLP") preclinical study, including 90-day and 180-day safety endpoints. The FDA indicated that favorable 90-day data may support the initiation of an Early Feasibility Study ("EFS") in the United States, with the 180-day cohort supporting a future marketing application. Feedback was also provided on pivotal trial design, including recommendations regarding appropriate control arms, concurrent therapy tracking, and anatomical safety assessment. We have incorporated this guidance into our development plan and are targeting potential De Novo approval in 2028, following completion of the EFS and subsequent pivotal study. We anticipate submitting our 90-day GLP data by the end of 2025 and initiating the EFS in the first half of 2026.

We also made continued progress on product development. Engineering refinements to the ablation catheter during the quarter focused on improving steerability, vessel wall contact, and energy delivery precision, particularly in the complex anatomy of the celiac region. In parallel, development continued on our sensing catheter, with design modifications underway to support future activation of its sensing capabilities for targeted nerve localization. These enhancements are being guided by physician feedback and preclinical learnings and will be incorporated into our clinical-stage configurations.

Additionally, we strengthened our intellectual property portfolio with the issuance of two new U.S. patents during the quarter. U.S. Patent No. 12,257,071 relates to controlled sympathectomy and micro-ablation systems and methods, while U.S. Patent No. 12,279,889 B2 covers technologies for mapping, evaluating, and modifying neurological activity. These patents support our long-term strategy to protect our innovations and expand into adjacent indications within interventional neuromodulation.

On July 21, 2025, we entered into a warrant exercise inducement offer letter (the "Inducement Letter") with the holders ("Holders") of certain existing warrants issued in the Offering from November 2024 to purchase up to 1,477,596 shares of our common stock (the "Existing Warrants"). Pursuant to the Inducement Letter, we agreed to reduce the exercise price of the Existing Warrants to $1.723 per share, and the Holders agreed: (i) to exercise Existing Warrants to purchase 855,000 shares of our common stock; and (ii) to prepay $1.722 per share of the reduced exercise price for Existing Warrants to purchase 622,596 shares of our common stock in consideration of us further reducing the exercise price of such Existing Warrants to purchase 622,596 shares of our common stock to $0.001 per share with an exercise term of 5.5 years. In consideration of the foregoing, we agreed to issue the Holders new warrants to purchase up to a number of shares of our common stock equal to 100% of the number of shares of our common stock underlying the Existing Warrants, comprised of new Series B warrants to purchase up to 1,477,596 shares of our common stock (the "Inducement Warrants" and the shares of our common stock underlying the Inducement Warrants, the "Inducement Warrant Shares") at $1.723 per share with an exercise term of 5.5 years from the initial exercise date. In addition, we issued 88,656 Representative's Warrants at $2.6707 per share with an exercise term of 5 years. We received total gross proceeds of approximately $2.6 million, less expenses paid to the Placement Agent of approximately $0.3 million.

In July 2025, we entered into stock option cancellation agreements with certain employees to cancel an aggregate of 57,331 stock options. Employees that elected to cancel their stock options were granted severance agreements for three, six or nine months of their base salary (under certain conditions). On August 11, 2025, we entered into stock option cancellation agreements with Board members and certain officers of the Company to cancel an aggregate of 177,652 stock options. Our Board members included Mr. Walter Klemp, Chairman of the Board; Ms. Lori Bisson, Executive Chair of the Board; and Mr. Chris Capelli, Director, respectively, and included amounts of 8,773; 65,542; and 3,750, respectively. Our officers included Mr. Brad Hauser, Chief Executive Officer and President; Mr. Landy Toth, Chief Technology Officer; Mr. Robert Schwartz, Chief Medical Officer; and Mr. Trent Smith, Chief Financial Officer, respectively, and included amounts of 45,000; 8,773; 13,159; and 32,655, respectively. Mr. Hauser was granted three months of his base salary, in addition to the twelve months of his base salary per his July 17, 2024 employment agreement. Mr. Toth and Mr. Schwartz were granted severance agreements that amounted to nine months of their base salary. Mr. Smith was granted three months of his base salary, in addition to the nine months of his base salary per his July 24, 2023 employment agreement.

Results of Operations for the Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

Below is a summary of the results of operations (in thousands):

		Three Months Ended June 30,
										Change				Change
		2025				2024				( $ )				( % )
Operating expenses:
Research and development		$	1,593			$	954			$	639				67	%
General and administrative			1,828				1,799				29				2	%
Total operating expenses		$	3,421			$	2,753			$	668				24	%

Research and Development Expense

Research and development expense was $1.6 million for the three months ended June 30, 2025 compared to $1.0 million for the same period in 2024. The increase in research and development expenses during the current year was mainly attributed to our clinical trial and product development costs. We expect to incur increased research and development costs in the future as we continue with our clinical trial and product development costs.

General and Administrative Expense

General and administrative expense was $1.8 million for the three months ended June 30, 2025 compared to $1.8 million for the same period in 2024. This was driven primarily by an increase in legal and professional fees of $0.1 million, offset by a decrease in officer and employee compensation and benefits of $0.1 million.

Interest expense

For the three months ended June 30, 2025 and 2024, we had interest expense of $0 and less than $0.1 million, respectively, related to the amortization of debt discount.

Interest income

For the three months ended June 30, 2025 and 2024, we had interest income of less than $0.1 million, respectively.

Liquidity and Capital Resources

On June 30, 2025, we had cash of $8.6 million, and working capital of $7.0 million. We have historically funded our operations from proceeds from debt and equity sales. We estimate our current cash resources are sufficient to fund our operations into but not beyond the second calendar quarter of 2026.

We will need to raise additional capital to meet our obligations and execute our business plan. We estimate that we will require additional financing of approximately $32 to $40 million to fund our operations to commercialization of our first indication. The timing and costs of clinical trials are difficult to predict and trial plans may change in response to evolving circumstances and as such the foregoing estimates may prove to be inaccurate. If we are unable to raise sufficient funds, we will be required to develop and implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. We recognize the need to raise additional capital to continue to execute our business plan, including obtaining regulatory clearance for our 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 us. A failure to raise sufficient capital, generate sufficient product revenues, control expenditures and regulatory matters, among other factors, will adversely impact our ability to meet our financial obligations as they become due and payable and to achieve our intended business objectives. If we are unable to raise sufficient additional funds, we will have to scale back our operations.

Summary of Cash Flows

Cash used in operating activities

Net cash used in operating activities was $2.6 million during the three months ended June 30, 2025, consisting of a net loss of $3.3 million, a decrease in operating assets of $0.1 million and an increase in operating liabilities of $0.2 million. The change in operating assets and liabilities included sources of cash from a decrease in other current assets of $0.1 million and a net increase in accounts payable and accrued expenses of $0.2 million. The increase in accounts payable and accrued expenses was driven primarily by increases in research and development expenses. Non-cash items primarily consisted of stock-based compensation of $0.4 million.

Cash used in investing activities

Net cash used in investing activities was $0 for the three months ended June 30, 2025.

Net cash used in investing activities was $5 thousand for the three months ended June 30, 2024 related to the purchase of computer hardware and software.

Cash provided by financing activities

Net cash provided by financing activities was $2.1 million for the three months ended June 30, 2025. On February 28, 2025, we entered into an At Market Issuances Sales Agreement (the "Agreement") with Ladenburg Thalmann & Co. Inc. (the "Agent"). Pursuant to the terms of the Agreement, we were able to sell $2.1 million of our common stock, before deducting Agent commissions and other estimated expenses payable by the Company. During the three months ended June 30, 2025, we also paid less than $0.1 million in issuance costs related to the Agreement.

Net cash provided by financing activities was $0 for the three months ended June 30, 2024.

Contractual Obligations and Commitments

None.

Employment Arrangements

We have agreements with key employees to provide certain benefits, including salary and other wage-related benefits, in the event of termination. In addition, the Company has adopted a severance policy for certain key members of executive management to provide certain benefits, including salary and other wage-related benefits, in the event of termination. In total, these benefits would amount to a range of $1.2 million to $1.7 million using the rate of compensation in effect at June 30, 2025.

Off-balance Sheet Arrangements

As of June 30, 2025 and March 31, 2025, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Significant Judgments and Estimates

The financial statements in this quarterly report have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto. We consider critical accounting policies to be those that require more significant judgments and estimates in the preparation of our financial statements, including the following: work performed but not yet billed by contract manufacturers, engineers and research organizations, warrant liability and the valuation of equity related instruments. Management relies on historical experience and other assumptions believed to be reasonable in making its judgments and estimates. Actual results could differ materially from those estimates.

Management believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change.

Our accounting policies are more fully described under the heading "Description of the Business, Basis of Presentation and Summary of Significant Accounting Policies" in Note 1 of our Annual Report on Form 10-K filed with the SEC on May 29, 2025.