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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

 (Mark
 One)

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2024

 OR

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from to

 Commission
File Number 001-33351

 NEUROMETRIX,
INC.

 (Exact
name of registrant as specified in its charter)

 Delaware

 04-3308180

 (State
 or Other Jurisdiction of

 Incorporation or Organization)

 (I.R.S.
 Employer

 Identification No.)

 4B
 Gill Street, Woburn, Massachusetts

 01801

 (Address
 of Principal Executive Offices)

 (Zip
 Code)

 (781) 890-9989

 (Registrant's
Telephone Number, Including Area Code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of exchange on which registered

 Common
 Stock, $0.0001 par value per share

 NURO

 The
 Nasdaq Stock Market LLC

 Preferred
 Stock Purchase Rights

 -

 The
 Nasdaq Stock Market LLC

 Securities
registered pursuant to Section 12(g) of the Act

 None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
accelerated filer Accelerated filer

 Non-accelerated
filer Smaller reporting company

 Emerging
growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 As
of June 28, 2024, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market
value of the voting stock held by non-affiliates of the registrant was $ 6.9 million based on the closing sale price of the common stock
as reported on the Nasdaq Capital Market on June 28, 2024.

 As
of March 28, 2025, there were 2,059,693 shares of common stock outstanding.

 DOCUMENTS
INCORPORATED BY REFERENCE

 The
following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K: Certain information
required by Part III of this Annual Report on Form 10-K will be incorporated from either an amendment to this Annual Report on Form 10-K
or a proxy statement to be filed within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates.

 NEUROMETRIX,
INC.

 ANNUAL
REPORT ON FORM 10-K

 FOR
THE YEAR ENDED DECEMBER 31, 2024

 TABLE
OF CONTENTS

 PART
 I

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 PART
 II

 Item
 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 Reserved

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions and Director Independence

 Item
 14.

 Principal Accounting Fees and Services

 PART
 IV

 Item
 15.

 Exhibits and Financial Statement Schedule

 Item
 16.

 Form 10-K Summary

 Signatures

 "NEUROMETRIX",
"NC-STAT", "OptiTherapy", "ADVANCE", "SENSUS", "Quell", stylized "Q",
"DPNCheck" and "NC-stat DPNCHECK" are the subject of either a trademark registration or application for registration
in the United States. Other brands, names and trademarks contained in this Annual Report on Form 10-K are the property of their respective
owners.

 PART
I

 The
statements contained in this Annual Report on Form 10-K, including under the section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and other sections of this Annual Report on Form 10-K include forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the Exchange Act), including, without limitation, statements regarding our or our management's expectations,
hopes, beliefs, intentions or strategies regarding the future, such as our estimates regarding anticipated operating losses, future revenues
and projected expenses, our future liquidity; the proposed Merger (as defined below), our belief that there are unmet needs for the management
of chronic pain and in the diagnosis and treatment of diabetic neuropathy; our expectations surrounding Quell and DPNCheck (including
in connection with the Fukuda Asset Purchase Agreement (as defined below)); our expected timing and our plans to develop and commercialize
our products; our ability to meet our proposed timelines for the commercial availability of our products; our ability to obtain and maintain
regulatory approval of our existing products and any future products we may develop; regulatory and legislative developments in the United
States and foreign countries; the performance of our third-party manufacturers; our ability to obtain and maintain intellectual property
protection for our products; the successful development of our sales and marketing capabilities; the size and growth of the potential
markets for our products and our ability to serve those markets; the rate and degree of market acceptance of any future products; our
reliance on key scientific management or personnel; the payment and reimbursement methods used by private or government third-party payers;
our ability to maintain the listing of shares of our common stock on the Nasdaq Capital Market; and other factors discussed elsewhere
in this Annual Report on Form 10-K or any document incorporated by reference herein. The words "believe," "may,"
"will," "estimate," "continue," "anticipate," "intend," "expect,"
"plan" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that
a statement is not forward-looking. The forward-looking statements contained in this Annual Report on Form 10-K are based on our current
expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some
of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those
expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors
described in the section titled "Risk Factors." Should one or more of these risks or uncertainties materialize, or should
any of our assumptions prove incorrect, actual results may vary from those projected in these forward-looking statements. We undertake
no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws. Unless the context otherwise requires, all references to "we",
"us", the "Company", or "NeuroMetrix" in this Annual Report on Form 10-K refer to NeuroMetrix, Inc.

 ITEM
1. BUSINESS

 Our
Business

 Overview

Inc., is a Delaware corporation headquartered in Woburn, Massachusetts. The Company is a commercial stage neurotechnology company
whose mission is to improve individual and population health through innovative medical devices and technology solutions for pain syndromes
and neurological disorders. The Company has created the market for point-of-care nerve testing and introduced sophisticated wearable
technology for chronic pain syndrome. The Company's two leading commercial products treat chronic pain syndromes through wearable
neuromodulation technology (Quell) and assess peripheral neuropathy with point-of-care diagnostic technology (DPNCheck). The
Company holds extensive, proprietary intellectual property on its products.

 Recent
Developments

 In
early 2024, the Company initiated a review of its strategic options with the objective of enhancing shareholder value. The review focused
on the Company's commercial activities and structure as well as business combination opportunities. The undertaking contributed
to several outcomes:

 A
 substantial reduction-in-force was implemented at the end of Q1 2024. Employee headcount was reduced by 50%. This had the effect
 of reducing operating expenses and shifting personnel costs toward a more variable cost structure.

 Our
 legacy ADVANCE business was terminated in Q2 2024. This business had ceased to be a positive contributor of cashflow.

 The
 Board of Directors was strengthened in Q2 2024. A new, independent director, Joshua S. Horowitz, was added to the Board. Mr. Horowitz
 brings valuable experience in financial management, business strategy, investor relations and business combinations.

 The
Company's at-the-market (ATM) common stock facility pursuant to an At Market Issuance Sales Agreement with Ladenburg Thalmann &
Co. Inc. was terminated.

 The
Company entered into a definitive Agreement and Plan of Merger on December 17, 2024 with electroCore, Inc. (Nasdaq: ECOR) (electroCore)
and Nexus Merger Sub Inc. (Merger Sub). electroCore is a commercial stage bioelectronic medicine and general wellness company dedicated
to improving health and quality of life through its proprietary vagus nerve stimulation (nVNS) technology platform. It is focused on
delivering non-invasive neuromodulation via its nVNS platform technology to deliver better health and treatment of certain medical conditions
such as primary headache and to promote general wellness and human performance.

 Following
 the signing of the Merger Agreement, the Company entered into an Asset Purchase Agreement on January 16, 2025 with Fukuda
 Denshi Co., Ltd. (Fukuda) for the sale of the Company's DPNCheck business in Japan (the Fukuda Asset Purchase Agreement).
 The Fukuda Asset Purchase Agreement has the potential to deliver approximately $2 million in sales proceeds, comprised of an initial
 upfront payment of $400,000 to the Company and up to $1.5 million in subsequent milestone payments.

 The
Proposed Merger

 Merger
Agreement

 On
December 17, 2024, the Company entered into the Merger Agreement with electroCore and Merger Sub, a wholly owned subsidiary of electroCore,
providing for the merger (the Merger) of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly owned
subsidiary of electroCore.

 Subject
to the terms of the Merger Agreement, if the Merger is completed, each share of common stock of the Company outstanding immediately prior
to the effective time of the Merger (the Effective Time), will be cancelled and converted into the right to receive (i) an amount in
cash (the Per Share Cash Consideration) equal to a pro rata share of the Company's balance of Net Cash (as defined in and determined
pursuant to the Merger Agreement) at the Effective Time, after deduction of certain pro rata payments that will be due in accordance
with the Company's Amended and Restated Management Retention and Incentive Plan (the MRIP), without interest and (ii) one contingent
value right (a CVR), representing the right to receive contingent payments subject to the terms and conditions set forth in the CVR Agreement
(as defined below) (the consideration contemplated by (i) and (ii), together, the Merger Consideration).

 In
addition, at the Effective Time, each share of preferred stock of the Company outstanding immediately prior to the Effective Time will
continue to be outstanding after the Effective Time, except that thereafter, such shares of preferred stock will, in accordance with
their own terms and the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock of
the Company, no longer be convertible into common stock, but will instead be converted into the right to receive the Merger Consideration
payable in respect of the shares of common stock into which such shares of preferred stock would have been convertible.

 As
of the Effective Time, each award of restricted stock (RSA) with respect to shares of common stock that is then outstanding and unvested
will be converted into the right to receive consideration as follows (notwithstanding any vesting conditions, restrictions or risk of
forfeiture): each RSA for which the holder thereof made a timely and valid election (a Section
83(b) Election) under Section 83(b) of the Internal Revenue Code of 1986, as amended, will be cancelled
and converted into the right to receive the Merger Consideration with respect to each share of common stock subject to such RSA in accordance
with the Merger Agreement and the CVR Agreement, and each RSA for which the holder thereof did not make a timely and valid Section 83(b)
Election will be cancelled and converted into the right to receive cash consideration and one CVR with respect to each share of common
stock subject to such RSA immediately prior to the Effective Time.

 At
the Effective Time, each option to purchase common stock that is outstanding and unvested immediately prior to the Effective Time (whether
time- or performance-based) will fully vest and become exercisable, and (i) each option that is then outstanding and unexercised and
which has a per share exercise price that is less than the Per Share Cash Consideration will be cancelled and converted into the right
to receive an amount in cash equal to: (a) the excess, if any, of the Per Share Cash Consideration over the exercise price per share
of such option, multiplied by the number of shares of common stock underlying such option and (b) one CVR with respect to each share
of common stock subject to such option immediately prior to the Effective Time; and (ii) each option that is then outstanding and unexercised
and that has an exercise price per share that is equal to or greater than the Per Share Cash Consideration will be cancelled with no
consideration payable in respect thereof.

 At
the Effective Time, each restricted stock unit (RSU) that is then outstanding will automatically be cancelled and converted into the
right to receive (i) an amount in cash equal to the product of (A) the number of shares of common stock then underlying such RSU multiplied
by (B) the Per Share Cash Consideration, without any interest thereon and (ii) one CVR with respect to each share of common stock subject
to such RSU immediately prior to the Effective Time.

 Effective
as of the Effective Time, subject to the MRIP and subject to the Company's receipt of an executed general release of claims, each
eligible participant in the MRIP (Participant) will have the right to receive (a) an amount in cash equal to (i) such Participant's
percentage interest set forth in the MRIP, multiplied by (ii) the aggregate amount of Net Cash, as determined pursuant to the Merger
Agreement; and (b) upon the making of any distributions pursuant to the CVR Agreement, such amounts in cash equal to (i) such Participant's
percentage interest set forth in the MRIP, multiplied by (ii) the gross proceeds in respect of the applicable distribution period under
the CVR Agreement.

 Consummation
of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, without limitation, the absence of
certain legal impediments, the approval by the holders of a majority of the outstanding shares of common stock entitled to vote on the
Merger, the determination of Net Cash pursuant to the Merger Agreement, the filing by the Company of this Annual Report on Form 10-K,
the parties having performed, or complied with, in all material respects its agreements, covenants and other obligations required to
be performed or complied with by the Merger Agreement at or prior to the closing date of the Merger, the representations and warranties
of the parties being true and correct (subject in certain instances to materiality qualifiers), there having been no material adverse
effect on the Company since the signing of the Merger Agreement, and the Company having Net Cash of at least $8,000,000.

 The
Merger Agreement includes covenants customary for a transaction of this nature, including non-solicitation covenants as well as covenants
regarding the operation of the business of the Company and its subsidiaries between signing of the Merger Agreement and the Effective
Time.

 The
Merger Agreement contains certain termination rights for the Company and electroCore. Upon termination of the Merger Agreement under
specified circumstances, the Company will be required to pay electroCore a termination fee of $500,000 or, in certain other specified
circumstances, reimburse electroCore for all reasonable out-of-pocket fees and expenses (up to a maximum of $250,000 or $500,000, depending
on the circumstances upon which such termination occurs) incurred by electroCore in connection with the Merger Agreement and the transactions
contemplated thereby.

 On March 21, 2025, the Company held a special meeting of stockholders,
where it obtained approval of the Merger Agreement and the transactions contemplated thereunder by the holders of a majority of the outstanding
shares of common stock. If
the Merger is consummated, our common stock will be delisted from the Nasdaq Capital Market and deregistered under the Exchange Act,
and we will cease to be a publicly traded company. The Merger is expected to close early in the second quarter of 2025.

 Voting
and Support Agreement

 In
connection with the execution of the Merger Agreement, electroCore entered into a Voting
and Support Agreement (the Voting Agreement) with certain of the Company's stockholders, including all of the Company's directors
and executive officers (collectively, the Stockholders). Pursuant to the Voting Agreement, the Stockholders have agreed, among other
things, to (i) vote or cause to be voted all of their shares of common stock in favor of the adoption of the Merger Agreement and (ii)
subject to limited exceptions, not to sell or otherwise transfer any of their shares of common stock other than with the consent of electroCore.

 Contingent
Value Rights Agreement

 At
the Effective Time, electroCore will enter into a contingent value rights agreement (the
CVR Agreement) with a rights agent, pursuant to which the holders of common stock, RSAs, RSUs and, if and when applicable pursuant to
the terms of the Merger Agreement, preferred stock and options may become entitled to receive cash payments contingent upon and subject
to the receipt by the Company of payments in connection with the sale of our products under the Quell product line or proceeds from one
or more agreements providing for disposition of our DPNCheck product line and upon the achievement of certain milestones related thereto.

 When
issued, each CVR will entitle the holder, over the term of the CVR Agreement, to receive a contingent payment in the form of a distribution
calculated as a portion of the proceeds, if any, during the applicable distribution period under the CVR Agreement, subject to certain
adjustments and deduction of certain expenses pursuant to the CVR Agreement.

 The
CVR Agreement has a term commencing on the Effective Date and ending on the earlier of (a) December 31 of the calendar year in which
electroCore will have caused to be paid to the holders pursuant to the terms of the CVR Agreement all distributions with respect to all
payments (including any contingent payments) contemplated to be made, and (b) December 31 of the calendar year in which the five-year
anniversary of the Effective Time shall have occurred (provided that if such five-year anniversary is during the month of December, such
date will be extended until March 31 of the immediately subsequent calendar year).

 The
Company's Board of Directors has unanimously (i) determined that the Merger Agreement, the CVR Agreement, the Voting Agreement
and the transactions contemplated thereby, including the Merger, are fair to and in the best interests of the Company and its stockholders,
(ii) approved, adopted and declared advisable the execution, delivery, and performance of the Merger Agreement and the consummation of
the transactions contemplated thereby, including the Merger, (iii) directed that the Merger Agreement be submitted to the Company's
stockholders for their adoption, and (iv) recommended that the Company's stockholders adopt the Merger Agreement.

 For
additional information related to the Merger, refer to the filings made by the Company with the Securities and Exchange Commission (the
SEC), including the definitive proxy statement filed on February 14, 2025. We have prepared this Form 10-K as if we are going to remain
an independent company. If the Merger is consummated, many of the forward-looking statements contained in this Form 10-K will no longer
be applicable.

No. 17 to Shareholder Rights Agreement

 In
connection with the Merger Agreement, on December 17, 2024, the Company entered into Amendment No. 17 (Amendment No. 17) to the Shareholder
Rights Agreement with Equiniti Trust Company, LLC (formerly known as American Stock Transfer & Trust Company, LLC), dated as of March
7, 2007 (the Shareholder Rights Agreement). Amendment No. 17 amends the Shareholder Rights Agreement such that, among other things, (i)
the signing of the Merger Agreement does not cause electroCore or any of its affiliates to be deemed to be an Acquiring Person (pursuant
to and as defined in the Shareholder Rights Agreement) or otherwise deem a triggering event to have occurred that would allow holders
to exercise their rights under the Shareholder Rights Agreement and (ii) provides that such rights may not be exercised after the Effective
Time.

Sale to Fukuda

 Following
the signing of the Merger Agreement, on January 16, 2025, the Company entered the Fukuda Asset Purchase Agreement, pursuant to which
the Company has agreed to sell its rights, title and interest in the assets related to its DPNCheck product line for use in the Japanese
market, including relevant intellectual property rights.

 In
connection with the Company's entry into the Fukuda Asset Purchase Agreement, the Company and Fukuda also entered into a Patent
Assignment Agreement, dated January 16, 2025, whereby the Company assigned to Fukuda certain intellectual property rights in Japan relating
to its DPNCheck product line, as well as an Intellectual Property License Agreement, dated January 16, 2025, whereby the Company granted
to Fukuda a limited, non-exclusive, royalty-free license in Japan to certain materials and know-how in connection with the use of the
intellectual property purchased pursuant to the Fukuda Asset Purchase Agreement.

to the Fukuda Asset Purchase Agreement, Fukuda agreed to pay the Company an initial payment of $400,000 in cash and two milestone payments
totaling up to $1.5 million after such closing payable upon the achievement of certain milestones. The Company anticipates the completion
of the first milestone and milestone payment by March 31, 2025 and the second milestone and milestone payment during April 2025.

 Background
of the Company

 Chronic
pain is a significant public health problem. It is defined by the National Institutes of Health (NIH) as pain lasting more than 12 weeks.
This contrasts with acute pain which is a normal bodily response to injury or trauma. Chronic pain conditions include low back pain,
arthritis, fibromyalgia, neuropathic pain, and cancer pain, among many others. Chronic pain may be triggered by an injury or there may
be an ongoing cause such as disease or illness. There may also be no clear cause. Chronic pain can also lead to other health problems
which can include fatigue, sleep disturbance and mood changes, which cause difficulty in carrying out important activities and contributing
to disability and despair. In general, chronic pain cannot be cured. Treatment of chronic pain is focused on reducing pain and improving
function. The goal is effective pain management.

 Chronic
pain affects nearly 100 million adults in the United States and more than 1.5 billion people worldwide. The estimated incremental impact
of chronic pain on health care costs in the United States is over $250 billion per year, and lost productivity is estimated to exceed
$300 billion per year. The most common approach to chronic pain management is pain medication. This includes over-the-counter (OTC) internal
and external analgesics as well as prescription pain medications, both non-opioid and opioids. The approach to treatment is individualized,
drug combinations may be employed, and the results are often inadequate. Side effects, including the potential for addiction are substantial.
Reflecting the complexity of chronic pain and the difficulty in treating it, we believe that inadequate relief leads 25% to 50% of pain
sufferers to seek alternatives to prescription pain medications. These alternatives include nutraceuticals, acupuncture, chiropractic
care, non-prescription analgesics, electrical stimulators, braces, sleeves, pads and other items. In total, these pain relief products
and services account for approximately $20 billion in annual out-of-pocket spending in the United States.

 Nerve
stimulation is a long-established category of treatment for chronic pain. This treatment approach is available through implantable devices
which have both surgical and ongoing risks, such as migration of the implanted nerve stimulation leads. Non-invasive approaches involving
transcutaneous electrical nerve stimulation (TENS) have achieved limited efficacy in practice due to power limitations, inadequate dosing
and low patient adherence. We believe that our Quell wearable technology for chronic pain is designed to address many of the limitations
of traditional TENS.

 Peripheral
neuropathies, or polyneuropathies, are diseases of the peripheral nerves. They affect about 10% of adults in the United States, with
the prevalence rising to over 30% among individuals 65 years and older. Peripheral neuropathies are associated with loss of sensation,
pain, increased risk of falling, weakness, and other complications. People with peripheral neuropathies have a diminished quality of
life, poor overall health and higher mortality. The most common specific cause of peripheral neuropathies, accounting for about one-third
of cases, is diabetes. Diabetes is a worldwide epidemic with an estimated affected population of over 400 million people. Within the
United States there are over 30 million people with diabetes and another 80 million with pre-diabetes. The annual direct cost of treating
diabetes in the United States exceeds $100 billion. Although there are dangerous acute manifestations of diabetes, the primary burden
of the disease is in its long-term complications which include cardiovascular disease, nerve disease and resulting conditions such as
foot ulcers which may require amputation, eye disease leading to blindness, and kidney failure. The most common long-term complication
of diabetes, affecting over 50% of the diabetic population, is peripheral neuropathy. Diabetic peripheral neuropathy (DPN) is the primary
trigger for diabetic foot ulcers which may progress to the point of requiring amputation. People with diabetes have a 15 to 25% lifetime
risk of foot ulcers and approximately 15% of foot ulcers lead to amputation. Foot ulcers are the most expensive complication of diabetes
with a typical cost of $5,000 to $50,000 per episode. In addition, between 16% and 26% of people with diabetes suffer from chronic pain
in their feet and lower legs.

 Early
detection of peripheral neuropathies, such as DPN, is important because there are no treatment options once the nerves have degenerated.
Currently available diagnostic methods for peripheral neuropathies range from a simple monofilament test for lack of sensory perception
in the feet to a nerve conduction study performed by a specialist. Our DPNCheck nerve conduction technology provides a rapid, low cost,
quantitative test for peripheral neuropathies, including DPN. It addresses an important medical need and is particularly effective in
screening large populations. DPNCheck has been validated in multiple clinical studies.

 Quell,
our wearable neuromodulation technology for chronic pain, has been refined over the past eight years with feedback from over 200,000
chronic pain patients and is protected by over 20 U.S. utility patents. Patients control and personalize the technology with a mobile
phone app, and their utilization of the devices and certain clinical metrics may be tracked in the Quell Health Cloud. The degree of
technological sophistication, combined with our extensive consumer experience and the compelling results of clinical studies, gives us
the opportunity to leverage this technology base into a portfolio of Quell-based prescription (Rx) wearable neurotherapeutics.

 In
2021, Quell received Breakthrough Device Designation from the U.S. Food and Drug Administration (FDA) for a fibromyalgia indication.
A pivotal double-blind, randomized, sham-controlled clinical study of Quell - Fibromyalgia was completed, and a De Novo marketing
authorization was obtained from the FDA in 2022. Quell – Fibromyalgia is indicated for use as an aid for reducing the symptoms
of fibromyalgia in adults with high pain sensitivity. This Rx product was introduced to the domestic market in late 2022.

 Quell
also received FDA Breakthrough Device Designation in early 2022 for the treatment of chronic Chemotherapy Induced Peripheral Neuropathy
(CIPN). A CIPN double-blind, randomized, sham-controlled clinical study employing Quell, funded by the National Cancer Institute (NCI)
and the NIH, was completed in 2023. The Company intends to initiate a De Novo regulatory submission for Quell – CIPN and
is evaluating the potential timing. A successful De Novo regulatory review by FDA could lead to market introduction of Quell -
CIPN approximately nine months to one year following submission. This would be the second product in the Company's emerging portfolio
of Quell-based Rx wearable therapeutics. A similar approach to other disease indications involving chronic pain could include Fibromyalgia-like
Long COVID, Chronic Low Back Pain, and Chronic Overlapping Pain Conditions (COPC).

 DPNCheck,
our testing technology for peripheral neuropathies, has been evaluated in multiple clinical studies and promoted both in the domestic
Medicare Advantage (MA) market and also in the Asian markets of Japan and China. MA has historically contributed the majority of DPNCheck
revenue and been the driver of product-line growth.

 In
early 2023, the Centers for Medicare and Medicaid (CMS) adopted significant changes to its MA Hierarchical Condition Categories (HCC)
risk adjustment payments and to its MA Risk Adjustment Data Validation (RADV) audit practices. These changes created significant uncertainty
in the market among participating healthcare providers and insurers. Subsequently, CMS confirmed that RADV changes would be implemented
immediately and applied retroactively, and that changes in HCC payments would be phased in over a three-year period. The changes to HCC
risk factor coding significantly reduced CMS payments for population screening for various conditions, including for neuropathy. During
2023 and 2024 we experienced significant reductions in MA sales resulting from CMS reimbursement changes. It is unlikely that there will
be a near-term recovery from the decline in revenue of the DPNCheck MA business.

 Commercial
Model

 Our
products consist of a medical device used in conjunction with a consumable electrode or biosensor. Other accessories and consumables
are also available to customers. Our objective is to grow active, installed user bases regularly ordering or subscribing to aftermarket
products. Our DPNCheck and Quell products conform to this business model.

 Marketed
Products

 Quell

 Quell
is a wearable device for symptomatic relief and management of chronic pain indications. It incorporates a collection of proprietary approaches
designed to optimize the effectiveness of nerve stimulation. These include high power electrical stimulation hardware with precise control,
algorithms that automatically determine therapeutic stimulation intensity and compensate for nerve desensitization, and automated detection
of user sleep and appropriate adjustment of stimulation level. Quell is comprised of (1) an electronic device that is placed in a flexible
band worn on the upper calf; (2) an electrode that attaches to the device and is the interface between the device and the skin; and (3)
a smartphone app to control the device and visualize, understand and optimize data relating to chronic pain and health. The app is integrated
with the Quell Health Cloud for storage of user data, data analytics and scientific research. An Apple Watch app provides many of
the functions of the smartphone app with the convenience of a smartwatch. The Quell device is lightweight and can be worn during the
day while active, and at night while sleeping. It has been authorized by the FDA for symptomatic relief and management of lower extremity
chronic pain and as an aid for reducing the symptoms of fibromyalgia in adults with high pain sensitivity. Cumulatively through 2024,
over 205,000 Quell devices have been shipped to customers.

is a fast, accurate, and quantitative nerve conduction test that is used to evaluate peripheral neuropathies (also called polyneuropathies
or systemic neuropathies) such as DPN. It is designed to be used by primary care physicians, endocrinologists, podiatrists and other
clinicians at the point-of-care to objectively detect, stage, and monitor peripheral neuropathies. The device measures nerve conduction
velocity and response amplitude of the sural nerve, a nerve in the lower leg and ankle. These parameters are recognized as sensitive
and specific biomarkers of peripheral neuropathies. DPNCheck is comprised of: (1) an electronic hand-held device and (2) a single patient-use
biosensor (limited biosensor re-use is allowed in certain international markets). In addition, we provide users with PC-based software
that links to the device via a USB connection thereby allowing physicians to generate reports, manage their test data and integrate with
enterprise systems including electronic medical record (EMR) systems.

is a modified version of our previously marketed NC-stat nerve testing device that has the same clinical indications with respect to
peripheral neuropathies. While lower in cost than the original device, DPNCheck has the same functionality with respect to sural nerve
testing. Over 4 million patient studies have been performed using our NC-stat technology. Our nerve testing technology has been the subject
of over 50 peer-reviewed publications, including over 30 studies specifically addressing the accuracy and clinical utility of the
DPNCheck device in the assessment of DPN and other peripheral neuropathies. Cumulatively through 2024, over 9,300 DPNCheck devices have
been shipped to customers.

 The
following chart summarizes our previously and currently marketed products.

 Product

 Time
 on Market

 Technology

 Primary
 Clinical Indications

 No.
 Patients Tested/Treated

 Quell

 Q2
 2015 – present

 Transcutaneous
 Electrical Nerve Stimulation

 Symptomatic
 and management relief of lower extremity chronic pain (OTC) and fibromyalgia (Rx)

 >
 205,000

 SENSUS

 Q1
 2013 – Q4 2020

 Transcutaneous
 Electrical Nerve Stimulation

 Symptomatic
 relief and management of chronic pain (Rx)

 >
 11,000

 Q4
 2011 – present

 Nerve
 Conduction

 Evaluation
 of peripheral neuropathies

 >
 2,600,000

 ADVANCE

 Q2
 2008 – present

 Nerve
 Conduction

 Evaluation
 of entrapment and systemic neuropathies

 >
 1,960,000 (ADVANCE and NC-stat)

 NC-stat

 Q2
 1999 – Q3 2010

 Nerve
 Conduction

 Evaluation
 of entrapment and systemic neuropathies

 Customers

customers include managed care organizations, health assessment providers, endocrinologists, podiatrists and primary care physicians
in the United States and distributors in Japan and China. Through December 31, 2024, over 9,300 DPNCheck devices have been shipped to
customers. Quell customers are primarily located in the United States. Through December 31, 2024, over 205,000 Quell devices have been
shipped.

 At
December 31, 2024, two customers accounted for 66% of accounts receivable and one customer accounted for 14% of revenue.

 Sales,
Marketing, and Distribution

 Our
U.S. sales efforts for DPNCheck primarily focus on MA organizations and providers who assume financial responsibility and the associated
risks for the health care costs of their patients. We believe that DPNCheck presents an attractive clinical case with detection of peripheral
neuropathy allowing for earlier clinical intervention to help mitigate the effects of peripheral neuropathy on both patient quality of
life and cost of care. Outside the United States, DPNCheck has been sold in Japan by our distribution partner Fukuda and in China by
Omron Medical (Beijing) Ltd. The Company entered the Fukuda Asset Purchase Agreement on January 16, 2025, which, upon full execution,
will transfer DPNCheck rights to the Japan market to Fukuda. For additional information about the Fukuda Asset Purchase Agreement, see
"DPNCheck Sale to Fukuda" above.

 Sales
and marketing efforts for DPNCheck are led by our Senior Vice President, Population Health and Value Based Care.

 Quell
– Fibromyalgia is available in the United States via HealthWarehouse.com, an online pharmacy. An Rx is required for purchase. Quell
(OTC) for lower extremity chronic pain is available to customers via our website. Sales and marketing efforts for Quell are led by our
National Sales Director, Neuromodulation.

 Manufacturing
and Supply

 We
perform final assembly and servicing of our Quell and DPNCheck devices at our manufacturing facility in Massachusetts. Outside suppliers
provide the sub-assemblies and components that we use in manufacturing Quell and DPNCheck, as well as our consumable products including
biosensors and electrodes. Reflecting the relatively small volumes of our products being manufactured and sold, we do not have alternative
suppliers for many of the key components of our products. Rather, we rely on regular contact and close working relationships with local
suppliers developed over many years. In outsourcing, we target companies that meet FDA, International Organization for Standardization
(ISO), and other quality standards supported by internal policies and procedures. Supplier performance is maintained and managed through
a corrective action program ensuring all product requirements are met or exceeded. Following the receipt of products or product components
from our third-party manufacturers, we conduct the necessary inspection, final assembly, packaging, and labeling at our manufacturing
facility. We believe that our manufacturing relationships minimize our capital investment, provide us with manufacturing expertise, and
help control costs.

 A
New England regional supplier has been manufacturing devices and providing sub-assemblies to us since 2005. The supplier currently manufactures
sub-assemblies for Quell and DPNCheck. A full-service original equipment manufacturer (OEM) based in the central United States and specializing
in medical and cosmetic devices, manufactures DPNCheck biosensors and Quell electrodes.

 We
are registered with the FDA and subject to compliance with FDA quality system regulations. As a registered device manufacturer, we undergo
scheduled FDA quality system inspections, are subject to inspections by state agencies and, if deemed necessary by the FDA, additional
inspections may occur. We are also ISO registered and undergo annual quality system audits for regulatory compliance by T V S D.
DPNCheck is cleared for marketing within the United States and Canada. DPNCheck is also cleared for marketing in Japan and China. Quell
is authorized for marketing in the United States.

 Research
and Development

 Our
research and development (R&D) team has over two decades of experience in developing diagnostic and therapeutic devices involving
the precision nerve stimulation and measurement of nerve signals for clinical purposes. Our company has extensive experience in neurophysiology,
biomedical instrumentation, signal processing, biomedical sensors, and information systems.

 Our
R&D team works closely with regulatory, marketing and customers to design and support products that are focused on improving clinical
outcomes. The team of five engineers (including employees and contractors) includes one member who holds an M.D. Our founder and Chief
Executive Officer leads the R&D team and coordinates our clinical program. He holds both an M.D. and a Ph. D.

2025, R&D will continue to support customer usage of our lead diagnostic, DPNCheck Gen 2, the latest version of the technology. Our
next therapeutic target is Quell - CIPN, which was the subject of a multi-center, double blind, randomized, sham-controlled trial. We
are evaluating the filing of an De Novo marketing application with the FDA for moderate to severe neuropathic pain and muscle
cramps in patients with CIPN. R&D efforts will encompass participation in drafting the De Novo application, supporting the
FDA review process, and developing CIPN-specific product features including a customized mobile app and digital health integration which
will be essential to marketing launch.

 Clinical
Program

 Our
clinical program operates under the direction of our Chief Executive Officer. This may from time to time be comprised of internal, collaborative,
and external clinical studies. Internal clinical studies are designed and implemented directly by us for the purposes of product design
and early clinical validation. Collaborative studies are conducted with leading researchers to provide clinical validation and to explore
the clinical utility of our products. External studies are entirely independent of us, although in many cases the researchers request
unrestricted grants for financial and/or material support, such as providing devices and consumables. External studies may examine the
clinical performance and utility of our products or use our products for outcomes measures. We actively seek to publish clinical study
results in leading peer-reviewed journals while also encouraging our clinical collaborators and clinical study grant recipients to do
the same. In 2025, we expect that our clinical program will be limited to external studies.

 Competition

 The
Quell technology falls within the crowded TENS category which encompasses a wide number of neurostimulation devices, the majority of
which are imported from Asia-based manufacturers. However, we believe there is no direct competition to our Quell technology with the
level of power, sophistication, and user-friendly features for the symptomatic relief of chronic pain. The most common approach to chronic
pain is pain medication. This includes OTC drugs (such as Advil and Motrin), and Rx drugs including anti-convulsants (such as Lyrica
and Neurontin) and anti-depressants (such as Cymbalta and Elavil). Topical creams may also be used (such as Zostrix and Bengay). With
severe pain, narcotic or opioid pain medications may be prescribed (such as codeine, fentanyl, morphine, and oxycodone). The approach
to treatment is individualized, where drug combinations may be employed, but the results are often inadequate. Side effects, including
the potential for addiction, are substantial.

 Reflecting
the difficulty in treating chronic pain, inadequate relief leads many pain sufferers to turn to the OTC market for supplements or alternatives
to Rx pain medications. These include non-Rx medications, topical creams, lotions, TENS devices, dietary products, braces, sleeves, pads
and other items. In the United States, over $4 billion is spent annually on such pain relief products.

 Nerve
stimulation is an established treatment for chronic pain. It is available through implantable spinal cord stimulation; however, this
approach requires surgery and has attendant risks. Non-invasive approaches to neurostimulation have achieved limited success in practice
due to device limitations, inadequate dosing and low patient adherence. We believe that our Quell – Fibromyalgia wearable technology
whose Rx indications make it the only FDA authorized non-pharmaceutical treatment for fibromyalgia, and its personalized features including
app control, high power and automation, and digital health integration characteristics place it in a unique neurostimulation category
without direct competition. Further, we expect that our initiative to build a portfolio of Quell-based Rx wearable neurotherapeutics
will, if successful, significantly reduce direct competition from TENS devices.

 We
believe that DPNCheck is currently the only objective and standardized test for peripheral neuropathies widely available at the point-of-care.
The American Diabetes Association and other organizations recommend at least annual evaluation of all people with diabetes for DPN. Due
to cost and availability, the evaluation is typically performed using a simple (5.07/10g) monofilament. The method is subjective and
only identifies late-stage neuropathy where intervention is generally limited to foot care. Experts in the field have indicated that
there is an unmet need for a practical, objective, and sensitive test for diabetic neuropathy that can be widely deployed in the regular
care of all people with diabetes. Monofilaments (5.07/10g) are a commodity sold by multiple medical supply companies.

 Intellectual
Property

 We
rely on a combination of patents, trademarks, copyrights, trade secrets, and other intellectual property laws, nondisclosure agreements
and other measures to protect our proprietary technology, intellectual property rights, and know-how. We hold issued utility patents
covering a number of important aspects of our Quell, SENSUS, DPNCheck and ADVANCE products. We believe that in order to have a competitive
advantage, we must develop and maintain the proprietary aspects of our technologies. We also require our employees, consultants and advisors,
whom we expect to work on our products, to agree to disclose and assign to us all inventions conceived, or developed using our property,
or which relate to our business. Despite any measures taken to protect our intellectual property, unauthorized parties may attempt to
copy aspects of our products or to obtain and use information that we regard as proprietary.

 Patents

 As
of December 31, 2024, we had 46 issued U.S. patents, 43 issued foreign patents, and 16 patent applications. Our wearable therapeutic
products have 28 issued U.S. utility patents, 25 foreign utility patents, 10 issued U.S. design patents plus 11 issued foreign design
patents. We also have 15 patent applications related to our wearable therapeutic products 7 U.S. and 8 foreign. For our DPNCheck diagnostic
device, 11 utility patents (4 U.S. and 7 foreign) were issued that cover the core technology.

 With
regard to our legacy neurodiagnostic products, our issued design patents began to expire in 2015, and our issued utility patents began
to expire in 2017. We have additional patents and patent applications directed to other novel inventions that extend patent terms into
2027.

 The
medical device industry is characterized by the existence of a large number of patents and frequent litigation based on allegations of
patent infringement. Patent litigation can involve complex factual and legal questions, and its outcome is uncertain. Any claim relating
to infringement of patents that is successfully asserted against us may require us to pay substantial damages. Even if we were to prevail,
any litigation could be costly and time-consuming and would divert the attention of our management and key personnel from our business
operations. Our success will also depend in part on our not infringing patents issued to others, including our competitors and potential
competitors. If our products are found to infringe the patents of others, our development, manufacture, and sale of these potential products
could be severely restricted or prohibited. In addition, our competitors may independently develop similar technologies. Because of the
importance of our patent portfolio to our business, we may lose market share to our competitors if we fail to protect our intellectual
property rights.

 A
patent infringement suit brought against us may force us or any strategic partners or licensees to stop or delay developing, manufacturing,
or selling potential products that are claimed to infringe a third party's intellectual property, unless that party grants us rights
to use its intellectual property. In such cases, we may be required to obtain licenses to patents or proprietary rights of others in
order to continue to commercialize our products. However, we may not be able to obtain any licenses required under any patents or proprietary
rights of third parties on acceptable terms, or at all. Even if we were able to obtain rights to the third party's intellectual
property, these rights may be non-exclusive, thereby giving our competitors access to the same intellectual property. Ultimately, we
may be unable to commercialize some of our potential products or may have to cease some of our business operations as a result of patent
infringement claims, which could severely harm our business.

 Trademarks

 We
hold domestic registrations for the trademarks NEUROMETRIX, Quell, stylized Q, Quell Health Cloud, DPNCheck, NC-stat, ADVANCE, and NC-stat
DPNCheck. We use a trademark for Wearable Pain Relief Technology and Therapy Autopilot. We hold certain foreign registrations for the
marks NEUROMETRIX, Quell, OptiTherapy, and NC-stat.

 Third-Party
Reimbursement

 Procedures
performed with our DPNCheck neurodiagnostic medical device may be paid for by third-party payers, including government health programs,
such as Medicare, and private insurance and managed care organizations. The 2024 Physicians Fee Schedule published by the CMS includes
CPT 95905 for nerve conduction studies performed with pre-configured electrode arrays such as those used with the DPNCheck device.

 We
believe that physicians are generally receiving reimbursement under CPT 95905 from Medicare for nerve conduction studies performed for
CTS using pre-configured electrode arrays that meet the medical necessity requirements in their local Medicare region but that commercial
insurers are generally not providing reimbursement. Reimbursement by third-party payers is an important element of success for medical
device companies. We do not foresee a significant near-term improvement in reimbursement for procedures performed with DPNCheck.

 In
the United States, some insured individuals receive their medical care through managed care programs which monitor and, for payment purposes,
often require pre-approval of the services that a member's provider prescribes. Some managed care programs pay their providers
a predetermined annual payment per member which puts the providers at financial risk for the services provided to their members. Our
domestic sales efforts for DPNCheck have been focused on the MA program. The MA program is administered by CMS and operated by private
managed care organizations or insurers referred to as Medicare Advantage organizations (MAOs). CMS pays these MAOs capitated fees that
are adjusted under CMS's risk adjustment model, which uses health status indicators, or risk scores, to ensure the adequacy of
payment. Members with higher risk codes generally require more healthcare resources than those with lower risk codes. In turn, the MAOs
fully absorb the risk of patient health care costs. MAOs may share a portion of the risk with provider organizations such as independent
practice associations with whom they contract to provide medical services to their members. Proper assessment of each member's
health status and accurate coding helps to assure that MAOs receive capitation fees consistent with the CMS risk adjustment model.

 The
MA program experienced significant change during 2023 as CMS issued a new rule regarding the MA RADV program that is used to recover
improper risk adjustment payments made to MAOs and also issued its 2024 Medicare Advantage Advance Notice, which confirmed substantial
changes to the HCC risk adjustment model for calendar year 2024. These changes to RADV and to HCC significantly limited patient screening
for various conditions, including for peripheral neuropathy, which had an adverse effect on DPNCheck testing and revenue during 2023
and 2024. We do not expect any further changes during 2025 in the CMS risk adjustment model as it relates to neuropathy.

 Our
success in selling DPNCheck will depend upon, among other things, our customers receiving, and our potential customers' expectation
that they will receive sufficient reimbursement or patient capitated premium adjustments from third-party payers for procedures or therapies
using these products. We expect that Quell will generally not be reimbursed by third-party payers in the near future. See "Risk
Factors - If health care providers are unable to obtain sufficient reimbursement or other financial incentives from third-party health
care payers related to the use of DPNCheck, their adoption and our future product sales will be materially adversely affected."

 FDA
and Other Governmental Regulation

 FDA
Regulation

 Our
products are medical devices that are subject to extensive regulation by the U.S. FDA under the Federal Food, Drug, and Cosmetic Act
(FDCA), and the regulations promulgated thereunder, as well as by other regulatory bodies in the United States and abroad. The FDA classifies
medical devices into one of three classes based on the risks associated with the medical device and the controls deemed necessary to
reasonably ensure the device's safety and effectiveness. Those three classes are:

 Class
 I: The lowest risk products, which require compliance with medical device general controls, including labelling, establishment registration,
 device product listing, adverse event reporting and, for some products, adherence to good manufacturing practices through the FDA's
 quality system regulations.

 Class
 II: Comprising moderate-risk devices, which also require compliance with general controls and in some cases, so-called special controls
 that may include performance standards, particular labelling requirements, or post-market surveillance obligations; typically a Class
 II device also requires pre-market review and clearance by FDA of a pre-market notification (510(k) application) as well as adherence
 to the quality system regulations/good manufacturing practices for devices; and

 Class
 III: High-risk devices that are often implantable or life-sustaining, which also require compliance with the medical device general
 controls and quality system regulations, but which generally must be approved by FDA before entering the market, through a more-lengthy
 pre-market approval (PMA) application. Approved PMAs can include post-approval conditions and post-market surveillance requirements,
 analogous to some of the special controls that may be imposed on Class II devices.

 Before
being introduced into the U.S. market, our products must obtain marketing clearance or approval from FDA through the 510(k) pre-market
notification process, or the De Novo classification process (summarized below under De Novo Classification Process (the
PMA process)), unless they are determined to be Class I devices or to otherwise qualify for an exemption from one of these available
forms of pre-market review and authorization by the FDA. To date, our products have all been classified as Class II, moderate-risk medical
devices and have been subject to the 510(k) or the De Novo review and clearance process. See " Risk Factors - We are subject
to extensive regulation by the FDA which could restrict the sales and marketing of Quell and DPNCheck, as well as other products for
which we may seek FDA clearance or approval and could cause us to incur significant costs."

 510(k)
Pre-Market Notification Process

 Class
II devices typically require pre-market review and clearance by the FDA, which is accomplished through the submission of a 510(k) pre-market
notification before the device may be marketed. To obtain 510(k) clearance, we must demonstrate that a new device is substantially equivalent
to another device with 510(k) clearance or grandfathered status, or to a device that was reclassified from Class III to Class II or Class
I - this device to which the new device is compared is called the "predicate device." In some cases, we may be required to
perform clinical trials to support a claim of substantial equivalence. If clinical trials are required, we may be required to submit
an application for an investigational device exemption (IDE), which must be cleared by the FDA prior to the start of a clinical investigation,
unless the device and clinical investigation are considered non-significant risk by the FDA or are exempt from the IDE requirements.
Whether or not an IDE is required for a clinical study involving a medical device, an appropriate Institutional Review Board (IRB) must
review and approve the study protocol before it is initiated. It generally takes three months from the date of the pre-market notification
submission to obtain a final 510(k) clearance decision from the FDA, but it can be significantly longer.

 After
a medical device receives a 510(k) clearance letter, which authorizes commercial marketing of the new device for one or more specific
indications for use, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change
in its intended use, requires the submission of a new 510(k) notification or could require De Novo classification or a PMA. The
FDA allows each company to make this determination, but the FDA can review the decision as part of routine compliance audits of the company.
If the FDA disagrees with a company's decision not to seek prior FDA authorization, the FDA may require the company to seek additional
510(k) clearance or pre-market approval. The FDA also can require the company to cease marketing and/or recall the medical device in
question until its regulatory status is resolved.

 De
Novo Classification Process

 If
the FDA determines that a new, previously unclassified medical device or its intended use is not substantially equivalent to a predicate
device, the device is automatically placed into Class III, requiring the submission of a PMA. Devices that cannot be cleared through
the 510(k) process due to lack of a predicate device but would be considered low or moderate risk (in other words, they do not rise to
the level of requiring the approval of a PMA because any risks associated with the device could be mitigated through general controls
and/or special controls) may be eligible for the 510(k) De Novo classification process. If a product is classified as Class II
through the De Novo classification process, then that device may serve as a predicate device for subsequent 510(k) pre-market
notifications.

 FDA
has issued a Guidance document that formally codifies requirements for the medical device De Novo process and the procedures and
criteria for product developers to file a De Novo classification request. FDA's activities to create predictability, consistency,
and transparency for innovative medical device developers may benefit the medical technology industry as a whole.

 PMA
Application Process

 If
a medical device does not qualify for the 510(k) pre-market notification process and is not eligible for classification as a low or moderate-risk
device through the De Novo process, the device is deemed to be Class III and a company must submit a PMA application to seek authorization
for its commercial sale. A PMA requires more extensive pre-filing testing than is required in the 510(k) application and is more costly,
lengthy and uncertain. The PMA review and approval process can take one to three years or longer, from the time the PMA application is
filed with the FDA. Under a PMA, the company must demonstrate to the FDA that the new medical device is safe and effective for its intended
purpose. A PMA typically includes extensive pre-clinical and clinical trial data, and information about the device, its design, manufacture,
labeling and components. Before approving a PMA, the FDA generally also performs an on-site inspection of manufacturing facilities for
the product to ensure compliance with the FDA's quality system regulation (QSR).

 If
FDA approves the PMA, the approved indications may be more limited than those originally sought. In addition, FDA's approval order
may include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device, including,
among other things, restrictions on labeling, promotion, sale and distribution and post-market study requirements. Failure to comply
with the post-approval conditions can result in adverse enforcement or administrative actions, including the withdrawal of the approval.
Approval of a new PMA application or a PMA supplement may be required before making certain types of modifications to the device, including
to its labeling, intended use or indication, or manufacturing process, especially when such modifications have the potential to affect
safety and effectiveness.

 Post-Marketing
Compliance Obligations

 Regardless
of which pre-market pathway a medical device uses to reach the U.S. market, after a device is placed on the market, numerous regulatory
requirements continue to apply. These include:

 the
 FDA's QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control,
 documentation and other good manufacturing practice and quality assurance procedures during all aspects of the manufacturing process
 (unless a device category is exempt from this requirement by the FDA, such as in the case of many Class I devices);

 labeling
 regulations and FDA prohibitions against the promotion of products for uncleared or unapproved uses (known as off-label uses), as
 well as requirements to provide adequate information on both risks and benefits;

 medical
 device reporting regulations, which require that manufacturers report to FDA any event that the company learns of in which a device
 may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a
 death or serious injury if the malfunction were to recur;

 correction
 and removal reporting regulations, which require that manufacturers report to the FDA field corrections and device recalls or removals
 if undertaken to reduce a risk to health by the device or to remedy a violation of the FDA caused by the device that may present
 a risk to health;

 post-market
 surveillance regulations, which apply to Class II or III devices if the FDA has issued a post-market surveillance order and the failure
 of the device would be reasonably likely to have serious adverse health consequences, the device is expected to have significant
 use in the pediatric population, the device is intended to be implanted in the human body for more than one year, or the device is
 intended to be used to support or sustain life and to be used outside a user facility;

 regular
 and for-cause inspections by FDA to review a manufacturer's facility and its compliance with applicable FDA requirements; and

 the
 FDA's recall authority, whereby it can ask, or order, device manufacturers to recall from the market a product that is in violation
 of applicable laws and regulations.

 Regulatory
Approvals and Clearances

 The
ADVANCE System received 510(k) clearance as a Class II medical device in April 2008 for its intended use by physicians to perform nerve
conduction studies and needle electromyography procedures. The ADVANCE System is no longer marketed and, where possible, we have transitioned
customers to DPNCheck.

 The
NC-stat System is also a Class II medical device and has been the subject of several 510(k) clearances, most recently in July 2006 (K060584).
The NC-stat System is cleared for use to stimulate and measure neuromuscular signals that are useful in diagnosing and evaluating systemic
and entrapment neuropathies. Our NC-stat DPNCheck, or DPNCheck, device is a technical modification to the 510(k) cleared NC-stat device
and has the same intended use, and therefore does not raise safety or effectiveness questions that would require a separate 510(k) submission
under the FDA's published guidance on 510(k) requirements for modified devices.

 As
transcutaneous electrical nerve stimulators, the SENSUS and Quell pain therapy devices are Class II medical devices that received 510(k)
clearance from the FDA in August 2012 and July 2014, respectively. In November 2012, the FDA provided 510(k) clearance for the disposable
electrode used in conjunction with the SENSUS device, and in July 2013, the FDA provided 510(k) clearance for the use of SENSUS during
sleep. The intended use of the SENSUS pain management therapeutic system is the symptomatic relief and management of chronic pain. The
SENSUS device is no longer marketed and, where possible, we have transitioned SENSUS customers to Quell. In July 2014, our Quell device
received 510(k) clearance for over-the-counter use and in November 2014, our Quell disposable electrode received 510(k) clearance for
over-the-counter use. In January 2016, a number of new features were added to Quell and received 510(k) clearance, most notably use with
an optional mobile app that contains several convenience features. The intended use of the Quell pain management therapeutic system is
the symptomatic relief and management of chronic pain. The Quell device may also be used during nighttime sleep.

 Quell
– Fibromyalgia is a transcutaneous electrical nerve stimulator employing our core Quell technology. Its intended use was not substantially
equivalent to an existing predicate device; however, it was considered low to moderate risk. FDA accepted the eligibility of Quell –
Fibromyalgia as a 510 (k) De Novo submission and provided the device with De Novo authorization in May 2022.

 Federal
Trade Commission Regulatory Oversight

 We
are subject to Federal Trade Commission (FTC) regulatory oversight. Under the Federal Trade Commission Act (FTC Act), the FTC is empowered,
among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce;
(b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations
relating to the organization, business, practices, and management of entities engaged in commerce. The FTC has very broad enforcement
authority, and failure to abide by the substantive requirements of the FTC Act and other consumer protection laws can result in administrative
or judicial penalties, including civil penalties, or injunctions affecting the manner in which Quell could be marketed in the future.

 Manufacturing
Facilities

 Our
facility, and the facilities utilized by our contract sub-assembly manufacturer, have been inspected by FDA in the past, and observations
were noted. There were no findings that involved a significant violation of regulatory requirements. The responses to these observations
have been accepted by the FDA and we believe that we and our contract manufacturers are in substantial compliance with the FDA QSR. We
expect that our facility and our subcontract facilities will be inspected again as required by the FDA. If the FDA finds significant
violations, we could be subject to fines, recalls, requirements to halt manufacturing, or other administrative or judicial sanctions.

 Medical
Device Single Audit Program (MDSAP)

 The
International Medical Device Regulators Forum (IMDRF) recognized that a global approach to auditing and monitoring the manufacturing
of medical devices could improve their safety and oversight on an international scale. The IMDRF established a work group which developed
specific documents to advance a Medical Device Single Audit Program (MDSAP).

 The
Medical Device Single Audit Program allowed MDSAP recognized Auditing Organizations to conduct a single regulatory audit of a medical
device manufacturer to satisfy the relevant requirements of the regulatory authorities participating in the program.

 MDSAP
participating international partners include:

 MDSAP
 Members

 Therapeutic
 Goods Administration of Australia

 Brazil's
 Ag ncia Nacional de Vigil ncia Sanit ria

 Health
 Canada

 Japan's
 Ministry of Health, Labour and Welfare, and the Japanese Pharmaceuticals and Medical Devices Agency

 U.S.
 Food and Drug Administration

 MDSAP
 Official Observers:

 The
 World Health Organization (WHO) Prequalification of In Vitro Diagnostics (IVDs) Programme

 United
 Kingdom's Medicines and Healthcare products Regulatory Agency (MHRA)

 European
 Union (EU)

 MDSAP
 Affiliate Members:

 Republic
 of Korea's Ministry of Food and Drug Safety

 Argentina's
 National Administration of Drugs, Foods, and Medical Devices (ANMAT)

 Federal
 Commission for Protection from Sanitary Risks (COFEPRIS) of Mexico

 Ministry
 of Health of Israel

 Singapore's
 Health Sciences Authority (HSA)

 TFDA
 – Taiwan Food and Drug Administration

 Based
on its evaluation of the MDSAP Final Pilot Report, the MDSAP Regulatory Authority Council (the international MDSAP governing body) determined
that the MDSAP Pilot had satisfactorily demonstrated the viability of the Medical Device Single Audit Program.

 In
May 2024, we underwent a MDSAP audit by the registrar T V S D. There was one minor non-conformance noted during the audit,
which was satisfactorily resolved. The FDA accepts MDSAP audit reports as a substitute for routine Agency inspections.

 Human
Capital Resources

 As
of December 31, 2024, we had 13 full time employees. Of these employees, two were in research and development, five in sales and marketing,
three in production/distribution, and three in general and administrative services. One employee holds both an M.D. and a Ph. D. Our employees
are not represented by a labor union and are not subject to a collective bargaining agreement. We have never experienced a work stoppage
and believe that we have good employee relations.

 We
recruit employees with the skills and training relevant to functional responsibilities. As a small, innovative company focused on growth,
we believe that our future success largely depends on our continued ability to attract and retain highly skilled employees. We assess
the likelihood that a particular candidate will contribute to the Company's overall goals, and beyond their specifically assigned
tasks. Depending on the position, our recruitment reach can be national or local. We aim to provide market-based compensation and stretch
incentives. We work to retain our employees for many years, as evidenced by the average of over 15 years' tenure of our workforce.
New employees are provided industry-relevant compliance training and are introduced to our Code of Business Conduct and Ethics, with
which all employees are required to annually confirm compliance.

 Available
Information

 Access
to our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed
with or furnished to the SEC may be obtained through the Investor Relations section of our website at www.neurometrix.com/investor
 as soon as reasonably practical after we electronically file or furnish these reports. We do not charge for access to and viewing
these reports. Information on our Investor Relations page and on our website is not part of this Annual Report on Form 10-K or any of
our other securities filings unless specifically incorporated herein by reference. In addition, the SEC maintains an Internet site that
contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Also,
our filings with the SEC may be accessed through the SEC's website at www.sec.gov. All statements made in any of our securities
filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included,
and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

 Corporate
Information

 NeuroMetrix
was founded in June 1996 by our President and Chief Executive Officer, Shai N. Gozani, M.D., Ph. D. We were originally incorporated in
Massachusetts in 1996 and were reincorporated in Delaware in 2001. Our offices and production facilities are located at 4-B Gill Street,
Woburn, Massachusetts 01801. Our website is www.neurometrix.com.

 ITEM
1A. Risk Factors

 You
should carefully consider the following risks and all other information contained in this Annual Report on Form 10-K and our other public
filings before making any investment decisions with respect to our securities. If any of the following risks occurs, our business, prospects,
reputation, results of operations, or financial condition could be harmed. In that case, the trading price of our securities could decline,
and our stockholders could lose all or part of their investment. This Annual Report also contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result
of specific factors, including the risks described below and elsewhere in this Annual Report on Form 10-K

 Summary
of Risk Factors

 Our
business is subject to numerous risks and uncertainties, including those highlighted in this section below, that represent challenges
that we face in connection with the successful implementation of our strategy. The occurrence of one or more of the events or circumstances
described in more detail in the risk factors below, alone or in combination with other events or circumstances, may have an adverse effect
on our business, prospects, reputation, results of operations, or financial condition. Such risks include, but are not limited to:

 While
 the Merger Agreement is in effect, we are subject to certain interim covenants.

 The
 announcement and pendency of the Merger may result in disruptions to our business, and the Merger could divert management's
 attention, disrupt our relationships with third parties and employees, and result in negative publicity or legal proceedings, any
 of which could negatively impact our operating results and ongoing business.

 The
 Merger may not be completed within the expected timeframe, or at all, for a variety of reasons, including the possibility that the
 Merger Agreement is terminated, and the failure to complete the Merger could adversely affect our business, results of operations,
 financial condition and the market price of our common stock.

 Litigation
 challenging the Merger could prevent the Merger from occurring or adversely affect our business, financial condition or results of
 operations.

 We
 have incurred significant operating losses since inception and cannot assure you that we will achieve profitability.

 Our
 future capital needs are uncertain. Our operations could be curtailed if we are unable to obtain the required additional funding
 when needed. The terms of any financings may not be advantageous to us.

 We
 hold an investment portfolio of securities that could experience losses.

 We
 are focused on growing sales of Quell, our wearable device for chronic pain, and DPNCheck, our test for peripheral neuropathy. We
 cannot assure you that we will be successful with these products or future product candidates or product enhancements in our development
 pipeline.

 Our
 current and future revenue is dependent upon commercial acceptance of our products in the marketplace. If our products are not accepted
 by prescribers and customers, our operations will be materially and adversely affected.

 If
 health care providers are unable to obtain sufficient reimbursement or other financial incentives from third-party health care payers
 related to the use of DPNCheck, their adoption and our future product sales will be materially adversely affected.

 The
 clinical study process is lengthy and expensive with uncertain outcomes. Results of earlier studies may not be predictive of future
 clinical study results, or the safety profile for such products or products under development.

 We
 rely on third parties to conduct clinical trials and perform data collection and analysis, which may result in costs and delays that
 prevent us from successfully commercializing our product candidates.

 We
 depend on several single source manufacturers to produce components of our products. Any material adverse changes in our relationships
 with these manufacturers, or material supply chain delays, could prevent us from delivering products to our customers in a timely
 manner and may adversely impact our future revenues or costs.

 If
 our manufacturers are unable to supply us with an adequate supply of product components, we could lose customers, our potential future
 growth could be limited and our business could be harmed.

 The
 success of our business depends upon our ability to advance our pipeline products to commercialization.

 Our
 ability to achieve profitability depends in part on maintaining or increasing our gross margins on product sales which we may not
 be able to achieve.

 If
 we lose any of our officers or key employees, our management and technical expertise could be weakened significantly.

 If
 we are unable to recruit, hire and retain skilled and experienced personnel, our ability to manage and expand our business will be
 harmed, which would impair our future revenues and profitability.

 Failure
 to develop or enter into relationships to sell products other than our existing products or enhance our existing products could have
 an adverse effect on our business prospects.

 If
 we are unable to develop new products or enhance existing products, we may be unable to attract or retain customers.

 We
 currently compete, and may in the future need to compete, against other medical device and consumer companies with greater resources,
 more established distribution channels and other competitive advantages, and the success of these competitors may harm our ability
 to generate revenues.

 Cybersecurity
 incidents, security breaches and other disruptions could compromise our information, hinder our ability to perform essential activities
 and expose us to financial claims and liabilities, which could cause our business and reputation to suffer.

 If
 future clinical studies or other articles are published, or physician associations or other organizations announce positions that
 are unfavorable to our products, our sales efforts and revenues may be negatively affected.

 If
 we expand in foreign markets, we will be affected by new business risks that may adversely impact our financial condition or results
 of operations.

 We
 are subject to extensive regulation by the FDA and other federal and state regulators which could restrict the sales and marketing
 of Quell and DPNCheck, as well as other products for which we may seek FDA clearance or approval and could cause us to incur significant
 costs.

 If
 we or our manufacturers fail to comply with the FDA's quality system regulation, the manufacturing and distribution of our
 products could be interrupted, and our product sales and operating results could suffer.

 We
 are subject to Federal Trade Commission regulatory oversight. Exercise of this regulatory oversight could lead to an outcome which
 would constrain our marketing of Quell, cause us to incur significant costs and penalties, and adversely affect our financial results.

 Our
 products may be subject to recalls, even after receiving FDA clearance or approval, which would harm our reputation, business and
 financial results.

 We
 are subject to federal and state laws prohibiting "kickbacks" and false or fraudulent claims, which, if violated, could
 subject us to substantial penalties. Additionally, any challenge to or investigation into our practices under these laws could cause
 adverse publicity and be costly to respond to, and thus could harm our business.

 If
 we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to civil or
 criminal penalties, which could increase our liabilities, damage our reputation and harm our business.

 The
 use of our products could result in product liability claims that could be expensive, damage our reputation and harm our business.

 Our
 products are complex in design, and defects may not be discovered prior to shipment to customers, which could result in warranty
 obligations or product liability or other claims, reducing our revenues and increasing our costs and liabilities.

 The
 patent rights we rely upon to protect the intellectual property underlying our products may not be adequate, which could enable third
 parties to use our technology and would harm our ability to compete in the market.

 Other
 rights and measures we have taken to protect our intellectual property may not be adequate, which would harm our ability to compete
 in the market.

 We
 may need to initiate lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive
 and, if we lose, could cause us to lose some of our intellectual property rights, which would harm our ability to compete in the
 market.

 Claims
 that our products infringe on the proprietary rights of others could adversely affect our ability to sell our products and increase
 our costs.

 Future
 sales of securities may cause our stock price to decline as a result of the dilution which will occur to existing stockholders.

 The
 trading price of our common stock has been volatile and is likely to be volatile in the future.

 We
 have, in the past, failed to satisfy certain continued listing requirements on The Nasdaq Stock Market LLC (Nasdaq) and could fail
 to satisfy those requirements again in the future which could affect the market price of our common stock and liquidity and reduce
 our ability to raise capital.

 Anti-takeover
 provisions in our organizational documents and Delaware law, and the shareholder rights plan that we adopted in 2007 and updated
 in 2021, may discourage or prevent a change of control, even if an acquisition would be beneficial to our stockholders, which could
 affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

 We
 do not intend to pay cash dividends.

 Risks
Related to the Proposed Merger

 While
the Merger Agreement is in effect, we are subject to certain interim covenants.

 The
Merger Agreement generally requires us to operate our business in the ordinary course, subject to certain exceptions, including as required
by applicable law, pending consummation of the Merger, and subjects us to customary interim operating covenants that restrict us, without
electroCore's approval (such approval not to be unreasonably conditioned, withheld or delayed), from taking certain specified actions
until the Merger is completed or the Merger Agreement is terminated in accordance with its terms. These restrictions could prevent us
from pursuing certain business opportunities that may arise prior to the consummation of the Merger and may affect our ability to execute
our business strategies and attain financial and other goals and may impact our financial condition, results of operations and cash flows.

 The
announcement and pendency of the Merger may result in disruptions to our business, and the Merger could divert management's attention,
disrupt our relationships with third parties and employees, and result in negative publicity or legal proceedings, any of which could
negatively impact our operating results and ongoing business.

 In
connection with the pending Merger, our current and prospective employees may experience uncertainty about their future roles with us
following the Merger, which may materially adversely affect our ability to attract and retain key personnel and other employees while
the Merger is pending. Key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire
not to remain with us following the Merger and may depart prior to the consummation of the Merger. Accordingly, no assurance can be given
that we will be able to attract and retain key employees to the same extent that we have been able to in the past.

 The
proposed Merger may cause disruptions to our business or business relationships with our existing and potential suppliers and other business
partners, and this could have an adverse impact on our results of operations. Parties with which we have business relationships may experience
uncertainty as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships
with third parties, or seek to negotiate changes to or alter their present business relationships with us. Parties with whom we otherwise
may have sought to establish business relationships may seek alternative relationships with third parties.

 The
pursuit of the proposed Merger has placed an increased burden on management and internal resources, which may have a negative impact
on our ongoing business. It also diverts management's time and attention from the day-to-day operation of our remaining businesses
and the execution of our other strategic initiatives. This could adversely affect our financial results. In addition, we have incurred
and will continue to incur other significant costs, expenses and fees for professional services and other transaction costs in connection
with the proposed Merger, and many of these fees and costs are payable regardless of whether or not the pending Merger is consummated.

 Any
of the foregoing, individually or in combination, could materially and adversely affect our business, our financial condition and our
results of operations and prospects.

 The
Merger may not be completed within the expected timeframe, or at all, for a variety of reasons, including the possibility that the Merger
Agreement is terminated, and the failure to complete the Merger could adversely affect our business, results of operations, financial
condition and the market price of our common stock.

 There
can be no assurance that the Merger will be completed in the expected timeframe or at all. The Merger Agreement contains a number of
customary closing conditions that must be satisfied or waived prior to the completion of the Merger, including, among others, the receipt
of the required approvals from NeuroMetrix's stockholders. If any of these closing conditions are not satisfied or waived and the
Merger has not been consummated on or before June 15, 2025, it is possible that the Merger Agreement may be terminated. The Merger Agreement
also provides both NeuroMetrix and electroCore certain termination rights.

 If
the Merger is not consummated within the expected time frame or at all, we may be subject to a number of material risks. The price of
our common stock may decline to the extent that current market prices reflect a market assumption that the Merger will be completed.
In addition, some costs, expenses and fees related to the Merger must be paid whether or not the Merger is completed, and we have incurred,
and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection
with the proposed Merger, as well as the direction of management resources towards the Merger, for which we will have received little
or no benefit if the closing of the Merger does not occur. We may also experience negative reactions from our stockholders and other
investors, employees and other parties with which we maintain business relationships. In addition, if the Merger Agreement is terminated,
in specified circumstances, we may be required to pay a termination fee. If the Merger is not consummated, there can be no assurance
that any other transaction acceptable to us will be offered or that our business, prospects or results of operations will not be adversely
affected.

 Litigation
challenging the Merger could prevent the Merger from occurring or adversely affect our business, financial condition or results of operations.

 In
connection with the announcement of the Merger Agreement, as is common in the context of mergers and acquisitions of publicly traded
companies, we (along with our directors and officers) may attract lawsuits seeking to enjoin us from proceeding with or consummating
the Merger or seeking to have the Merger rescinded after its consummation.

 One
of the conditions to the consummation of the Merger is the absence of any order issued by certain governmental authorities of competent
jurisdiction prohibiting the Merger. If any future plaintiffs are successful in obtaining an injunction or other order prohibiting the
Merger, we may be unable to consummate the Merger. The risks and uncertainties associated with a failure to consummate the Merger are
discussed in the immediately above risk factor. In addition, responding to any litigation targeting the Merger, even those without merit,
will cause us to incur legal costs and expenses, which may negatively impact our financial condition. Responding to lawsuits may also
divert the time and attention of our management away from our ongoing business operations and adversely affect our business and results
of operations.

 Risks
Related to Our Business

 We
have incurred significant operating losses since inception and cannot assure you that we will achieve profitability.

 We
have incurred recurring losses from operations and negative cash flows from operating activities. At December 31, 2024, we had an accumulated
deficit of $218 million. The extent of our future operating income or losses is highly uncertain, and we cannot assure you that we will
be able to achieve or maintain profitability.

 Our
future capital needs are uncertain. Our operations could be curtailed if we are unable to obtain the required additional funding when
needed. The terms of any financing may not be advantageous to us.

 We
held cash, cash equivalents and investment grade securities of $13 million as of December 31, 2024. We believe that these resources,
and the cash to be generated from future product sales will be sufficient to meet our projected operating requirements for at least the
next twelve months from the day of issuance of the financial statements. However, we may still need to raise additional funds to support
our future operating and capital needs.

 We
expect to incur further losses as we work to grow sales of our products. We continue to face significant challenges and uncertainties
and, as a result, our available capital resources may be consumed more rapidly than currently expected due to (a) decreases in sales
of our products and the uncertainty of future revenues from new products; (b) the effect of supply chain issues on our ability to obtain
parts and materials from our suppliers; (c) changes we may make to the business that affect ongoing operating expenses; (d) changes we
may make in our business strategy; (e) regulatory developments and inquiries affecting our existing products; (f) changes in our research
and development spending plans; and (g) other items affecting our forecasted level of expenditures and use of cash resources. We may
attempt to obtain additional funding through public or private financing, collaborative arrangements with strategic partners, asset divestitures,
or through additional credit lines or other debt financing sources to increase the funds available to fund operations. However, we may
not be able to secure such financing in a timely manner or on favorable terms, if at all. Furthermore, if we issue equity or debt securities
to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may have rights,
preferences and privileges senior to those of our existing stockholders. If we raise additional funds through collaboration, licensing
or other similar arrangements, it may be necessary to relinquish valuable rights to our potential products or proprietary technologies,
or to grant licenses on terms that are not favorable to us. Without additional funds, we may be forced to delay, scale back or eliminate
some of our sales and marketing efforts, research and development activities, or other operations and potentially delay product development
in an effort to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development
and commercialization goals would be adversely affected.

 We
hold an investment portfolio of securities that could experience losses.

 We
invest our cash resources not required for near-term operations in a portfolio of debt securities. These securities are evaluated by
independent rating agencies and meet the criteria of "investment grade" securities at the time of purchase. Changes in domestic
or world-wide economic conditions, or in the operations of the issuing entities could result in a rating downgrade of the securities
or an inability of the issuer to meet its obligation to the Company upon maturity. In this event, the Company would be exposed to loss
in value of the security. If the change in economic conditions was so severe as to affect the overall securities market and therefore
a significant part of the Company's portfolio, the loss in value could jeopardize the Company's ability to adequately fund
its operations, its strategic initiatives and achieve its development and commercialization goals.

 We
are focused on growing sales of Quell, our wearable device for chronic pain, and DPNCheck, our test for peripheral neuropathy. We cannot
assure you that we will be successful with these products or future product candidates or product enhancements in our development pipeline.

 Quell
was launched in June 2015 and is a wearable neuromodulation device for the symptomatic relief and management of chronic pain indications.
We are leveraging our core Quell technology into a portfolio of Rx wearable neurotherapeutics. Quell - Fibromyalgia, the first product
in this emerging portfolio, was launched in late 2022 as an aid for reducing the symptoms of fibromyalgia in adults with high pain sensitivity.
We are evaluating plans to file a De Novo marketing application with FDA for Quell – CIPN.

was launched in 2011 and is a nerve conduction test for peripheral neuropathies such as DPN. Our sales strategy for DPNCheck has focused
primarily on the U.S. MA sector through our own commercial team.

 The
MA market experienced substantial change during 2023 when CMS issued new rules on the MA RADV program that is used to recover improper
risk adjustment payments made to MA plans and also issued its 2024 Medicare Advantage Advance Notice, which confirmed substantial changes
to the HCC risk adjustment model limiting HCC codes for many types of peripheral neuropathies. The impact of these factors on 2023 and
2024 DPNCheck revenue was materially adverse. While we continue to support our customers and work to acquire new accounts, we do not
expect a near-term recovery from the decline in DPNCheck revenue.

 Our
future prospects are closely tied to our success with Quell and DPNCheck, which, in turn, depend upon market acceptance and growth in
future revenues and margins. We cannot assure you that our commercialization strategy will be successful. If our strategy is not successful,
it could materially affect our revenues and results of operations.

 Our
future success could be adversely affected by a number of factors, including:

 inability
 to increase adoption of DPNCheck within the MA market and other market segments in the United States;

 regulatory
 inquiries or issues affecting our products;

 unfavorable
 changes to current Medicare, Medicare Advantage and commercial payer payment policies;

 changes
 to payor policies under the Patient Protection and Affordable Care Act;

 inability
 to efficiently create market demand for prescription wearable neurotherapeutics based on Quell technology at profitable pricing and
 with efficient marketing;

 manufacturing
 issues with Quell or DPNCheck;

 unfavorable
 experiences by patients and physicians using DPNCheck, Quell and our other products; and,

 physicians'
 or patients' reluctance to alter their existing practices and adopt the use of our devices.

 If
we are unable to expand exposure and market demand for DPNCheck and Quell, our ability to increase our revenues will be limited and our
business prospects will be adversely affected.

 Our
current and future revenue is dependent upon commercial acceptance of our products in the marketplace. If our products are not accepted
by prescribers and customers, our operations will be materially and adversely affected.

 We
will continue to incur operating losses until such time as sales of Quell and DPNCheck reach a mature level and we are able to generate
sufficient revenue from their sale to meet our operating expenses. There can be no assurance that customers will adopt our technology
and products, or that prospective customers will agree to pay for our products. In the event that we are not able to significantly increase
the number of customers that purchase our products, or if we are unable to charge the necessary prices, our financial condition and results
of operations will be materially and adversely affected.

 If
health care providers are unable to obtain sufficient reimbursement or other financial incentives from third-party health care payers
related to the use of DPNCheck, their adoption and our future product sales will be materially adversely affected.

 Widespread
adoption of our diagnostic products by the medical community is unlikely to occur without a financial incentive from third-party payers
for the use of these products. If health care providers are unable to obtain adequate reimbursement for procedures performed using these
products, and if managed care organizations do not receive improved capitated payments due to more accurate patient risk assessment using
our products, we may be unable to sell our products at levels that are sufficient to allow us to achieve and maintain profitability,
and our business would suffer significantly. Additionally, even if these products and procedures are adequately reimbursed by third-party
payers today, adverse changes in payers future policies toward payment would harm our ability to market and sell our products. Third-party
payers include governmental programs such as Medicare and Medicaid, private health insurers, workers' compensation programs and
other organizations.

 Future
regulatory action by CMS or other governmental agencies or negative clinical results may diminish reimbursement payments to physicians
for performing procedures using our products. Medicaid reimbursement differs from state to state, and some state Medicaid programs may
not cover the procedures performed with our products or pay physicians an adequate amount for performing those procedures, if at all.
Additionally, some private payers do not follow the Medicare guidelines and may reimburse for only a portion of these procedures or not
at all. We are unable to predict what changes will be made in the reimbursement methods used by private or governmental third-party payers.

 The
clinical study process is lengthy and expensive with uncertain outcomes. Results of earlier studies may not be predictive of future clinical
study results, or the safety profile for such products or products under development.

 Clinical
testing is difficult to design and implement, can take many years, can be expensive, and carries uncertain outcomes. The results of clinical
studies of our products conducted to date and ongoing or future studies of our current, planned, or future products and product candidates
may not be predictive of the results of later clinical studies, and interim results of a clinical study do not necessarily predict final
results. Our interpretation of data and results from our clinical studies do not ensure that we will achieve similar results in future
clinical studies. In addition, clinical data is often susceptible to various interpretations and analyses, and many companies that have
believed their products performed satisfactorily in clinical studies have nonetheless failed to replicate results in later clinical studies.
Products in later stages of clinical studies may fail to show the desired safety and efficacy despite having progressed through nonclinical
studies. Failure can occur at any stage of clinical testing. Our clinical studies may produce negative or inconclusive results, and we
may decide, or regulators may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned.

 We
rely on third parties to conduct our clinical trials and perform data collection and analysis, which may result in costs and delays that
prevent us from successfully commercializing our product candidates.

 We
rely on contract research organizations, medical institutions, clinical investigators, and contract laboratories to perform data collection
and analysis and other aspects of our clinical trials. Our clinical trials may be delayed, suspended, or terminated if: the quality or
accuracy of the data obtained by the third parties on whom we rely is compromised due to their failure to adhere to our clinical protocols
or regulatory requirements or if for other reasons, these third parties do not successfully carry out their contractual duties or fail
to meet regulatory obligations or expected deadlines, or these third parties need to be replaced.

 If
the third parties on whom we rely fail to perform, our development costs may increase, and our ability to obtain regulatory approval
and commercialize our product candidates may be delayed or prevented altogether. We currently support medical institutions who are conducting
clinical trials related to our products. While we believe that there are alternative approaches to these medical institutions, in the
event that we seek such alternative sources we may not be able to enter into replacement arrangements without delays or incurring additional
expenses.

 We
depend on several single source manufacturers to produce components of our products. Any material adverse changes in our relationships
with these manufacturers, or material supply chain delays, could prevent us from delivering products to our customers in a timely manner
and may adversely impact our future revenues or costs.

 We
rely on third-party manufacturers to manufacture components of our Quell and DPNCheck systems. In the event that our manufacturers cease
to manufacture sufficient quantities of our products or components in a timely manner and on terms acceptable to us, we would be forced
to locate alternate manufacturers. Additionally, if our manufacturers experience a failure in their production process, are unable to
obtain sufficient quantities of the components necessary to manufacture our products, experience extraordinary price increases on parts
essential to our products or otherwise fail to meet our quality requirements, we may be forced to delay the manufacture and sale of our
products or to locate an alternative manufacturer. We may be unable to locate suitable alternative manufacturers for our products or
components for which the manufacturing process is relatively specialized, on terms acceptable to us, or at all. While we have long-standing
relationships with our primary suppliers for device components, electrodes and biosensors, these suppliers are, in turn, dependent on
other manufacturers of electronic parts and components, and are therefore subject to supply and demand risks of the electronic parts
and components marketplace, and the potential for parts obsolescence. As a result, there is a risk that certain parts and components
could be in short supply at a time when required by us or they could be discontinued and no longer available to us.

 We
have experienced, from time to time, inventory shortages on our products and essential parts. If any materially adverse changes in our
relationships with manufacturers or parts suppliers occur, our ability to supply our customers will be severely limited until we are
able to engage an alternate manufacturer or parts supplier or, if applicable, resolve any quality issues with our existing manufacturer.
This situation could prevent us from delivering products to our customers in a timely manner, lead to decreased sales or increased costs,
or harm our reputation with our customers.

 If
our manufacturers are unable to supply us with an adequate supply of product components, we could lose customers, our potential future
growth could be limited and our business could be harmed.

 In
order for us to successfully expand our business, our contract manufacturers must be able to provide us with substantial quantities of
components of our products in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable cost
and on a timely basis. Our potential future growth could strain the ability of our manufacturers to deliver products and obtain materials
and components in sufficient quantities. Manufacturers often experience difficulties in scaling up production, including problems with
production yields and quality control and assurance. If we are unable to obtain sufficient quantities of high-quality products to meet
customer demand on a timely basis, we could lose customers, our growth may be limited and our business could be harmed.

 The
success of our business depends upon our ability to advance our pipeline products to commercialization.

 We
commenced commercialization of Quell in June 2015 and we completed a DPNCheck product upgrade during 2022. We have additional product
candidates and enhancements of our existing products in our R&D pipeline. We expect that advancing our pipeline products will require
significant time and resources. We may not be successful in our commercialization efforts for any of the product candidates or product
enhancements currently in our pipeline and we may not be successful in developing, acquiring, or in licensing additional product candidates,
to the extent we decide to do so. If we are not successful in advancing new products through our development pipeline, the regulatory
process and commercial launch, our business, financial condition, and results of operations will be adversely affected.

 Our
ability to achieve profitability depends in part on maintaining or increasing our gross margins on product sales which we may not be
able to achieve.

 A
number of factors may adversely impact our gross margins on product sales and services, including:

 shortages
 of electronic components resulting in higher prices or an inability to supply key parts;

 low
 production volume which will result in high levels of overhead cost per unit of production;

 increased
 material or labor costs;

 increased
 service or warranty costs or the failure to reduce service or warranty costs;

 increased
 price competition;

 variation
 in the margins across products in a particular period; and

 how
 well we execute on our strategic and operating plans.

 If
we are unable to maintain or increase our gross margins on product sales, our results of operations could be adversely impacted, we may
not achieve profitability and our stock price could decline.

 If
we lose any of our officers or key employees, our management and technical expertise could be weakened significantly.

 Our
success largely depends on the skills, experience, and efforts of our executive officers, Shai N. Gozani, M.D., Ph. D., our founder, Chairman,
President and Chief Executive Officer, and Thomas T. Higgins, our Senior Vice President and Chief Financial Officer. We do not maintain
key person life insurance policies covering any of our employees. The loss of either of our executive officers could weaken our management
and technical expertise significantly and harm our business.

 If
we are unable to recruit, hire and retain skilled and experienced personnel, our ability to manage and expand our business will be harmed,
which would impair our future revenues and profitability.

 We
are a small company with 13 employees as of December 31, 2024, and our ability to retain our skilled labor force and our success in attracting
and hiring new skilled employees will be a critical factor in determining our future performance. We may not be able to meet our future
hiring needs or retain existing personnel, particularly given the challenges faced by our business. We will face challenges and risks
in hiring, training, managing and retaining engineering and sales and marketing employees. Failure to attract and retain personnel, particularly
technical and sales and marketing personnel would materially harm our ability to compete effectively and grow our business.

 Failure
to develop or enter into relationships to sell products other than our existing products or enhance our existing products could have
an adverse effect on our business prospects.

 Our
future business and financial success will depend, in part, on our ability to effectively market our products, including Quell and DPNCheck,
and to enhance these products in response to customer demand and feedback. Developing new products and upgrades to existing and future
products imposes burdens on our research and development department and our management. This process is costly, and we cannot assure
you that we will be able to successfully develop new products or enhance our current products. We also may not be able to enter into
relationships with other companies to sell additional products. In addition, as we develop the market for our products, future competitors
may develop desirable product features earlier than we do which could make our competitors' products less expensive or more effective
than our products and could render our products obsolete or unmarketable. If our product development efforts are unsuccessful, we will
have incurred significant costs without recognizing the expected benefits and our business prospects may suffer.

 If
we are unable to develop new products or enhance existing products, we may be unable to attract or retain customers.

 Our
success depends on the successful development, regulatory clearance or approval (if required), introduction and commercialization of
new generations of products, treatment systems, and enhancements to and/or simplification of existing products. Quell and DPNCheck must
keep pace with, among other things, the products of our competitors. We are making investments in long-term growth initiatives. Such
initiatives require capital commitments, involvement of senior management and other investments on our part, which we may be unable to
recover. Our timeline for the development of new products or enhancements may not be achieved and price and profitability targets may
not prove feasible. Commercialization of new products may prove challenging, and we may be required to invest more time and money than
expected to successfully introduce them. Once introduced, new products may adversely impact orders and sales of our existing products,
or make them less desirable or even obsolete. Compliance with regulations, competitive alternatives, and shifting market preferences
may also impact the successful implementation of new products or enhancements.

 Our
ability to successfully develop and introduce new products and product enhancements, and the revenues and costs associated with these
efforts, may be affected by our ability to:

 properly
 identify customer needs;

 prove
 feasibility of new products in a timely manner;

 educate
 physicians about the use of new products and procedures;

 comply
 with internal quality assurance systems and processes timely and efficiently;

 comply
 with regulatory requirements relating to our products, and limit the timing and cost of obtaining required regulatory approvals or
 clearances;

 accurately
 predict and control costs associated with inventory overruns caused by phase-in of new products and phase-out of old products;

 price
 new products competitively;

 manufacture
 and deliver our products in sufficient volumes on time, and accurately predict and control costs associated with manufacture of the
 products; and

 meet
 our product development plan and launch timelines.

 Even
if customers accept new products or product enhancements, the revenues from these products may not be sufficient to offset the significant
costs associated with making them available to customers. Failure to successfully develop, obtain regulatory approval or clearance for,
manufacture or introduce new products or to complete these processes in a timely and efficient manner could result in delays that could
affect our ability to attract and retain customers, or could cause customers to delay or cancel orders, causing our backlog, revenues
and operating results to suffer.

 We
currently compete, and may in the future need to compete, against other medical device and consumer companies with greater resources,
more established distribution channels and other competitive advantages, and the success of these competitors may harm our ability to
generate revenues.

 We
currently do, and in the future may need to, compete directly and indirectly with a number of other companies that may have competitive
advantages over us. Our diagnostic devices for nerve testing compete with companies that sell traditional nerve conduction study and
electromyography equipment including Cadwell Laboratories, Inc. and Natus Medical Incorporated. These companies enjoy significant competitive
advantages, including:

 greater
 resources for product development, sales and marketing;

 more
 established distribution networks;

 greater
 name recognition;

 more
 established relationships with health care professionals, customers and third-party payers; and

 additional
 lines of products and the ability to offer rebates or bundle products to offer discounts or incentives.

 As
we develop the market for wearable technology for chronic pain, we will be faced with competition from other companies that decide and
are able to enter the market as well as competition from other forms of treatment for chronic pain. Some or all of our future competitors
in the diagnostic nerve testing market and the chronic pain market may enjoy competitive advantages such as those described above. If
we are unable to compete effectively against existing and future competitors, our sales will decline and our business will be harmed.

 Cybersecurity
incidents, security breaches and other disruptions could compromise our information, hinder our ability to perform essential activities,
and expose us to financial claims and liabilities, which could cause our business and reputation to suffer.

 In
the ordinary course of our business, we collect and store sensitive data in our data centers, on our networks, including intellectual
property, our proprietary business information, and that of our customers, suppliers and business partners, and personally identifiable
information of our employees. The secure processing, maintenance and transmission of this information is critical to our operations.
Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due
to employee error, malfeasance or other disruptions. Similar risks exist with respect to our business partners and third-party providers,
including suppliers, software and cloud-based service providers, that we rely upon for aspects of our information technology support
services and certain administrative functions. Any such incident or breach could compromise our networks and the information stored there
could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal
claims or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence in our products and services, which
could have a material adverse effect on our business, financial condition, results of operations or cash flows.

 If
future clinical studies or other articles are published, or physician associations or other organizations announce positions that are
unfavorable to our products, our sales efforts and revenues may be negatively affected.

 Future
clinical studies or other articles regarding our existing products or any competing products may be published that either support a claim,
or are perceived to support a claim, that a competitor's product is more accurate or effective than our products or that our products
are not as accurate or effective as we claim or previous clinical studies have concluded. Additionally, physician associations or other
organizations that may be viewed as authoritative or have an economic interest in nerve conduction studies and in related electrodiagnostic
procedures or other procedures that may be performed using our products or in neurostimulation therapies using our devices could endorse
products or methods that compete with our products or otherwise announce positions that are unfavorable to our products. Any of these
events may negatively affect our sales efforts and result in decreased revenues.

 If
we expand in foreign markets, we will be affected by new business risks that may adversely impact our financial condition or results
of operations.

 Foreign
markets represented approximately 17% and 20% of our revenues in 2024 and 2023, respectively. Expansion in foreign markets will subject
us to the possibility of new business risks, including:

 failure
 to fulfill foreign regulatory requirements, if applicable, to market our products;

 availability
 of, and changes in, reimbursement within prevailing foreign health care payment systems;

 adapting
 to the differing business practices and laws in foreign countries;

 difficulties
 in managing foreign relationships and operations, including any relationships that we establish with foreign distributors or sales
 or marketing agents;

 limited
 protection for intellectual property rights in some countries;

 difficulty
 in collecting accounts receivable and longer collection periods;

 costs
 of enforcing contractual obligations in foreign jurisdictions;

 recessions
 in economies outside of the United States;

 political
 instability and unexpected changes in diplomatic and trade relationships;

 currency
 exchange rate fluctuations; and

 potentially
 adverse tax consequences.

 If
we are successful in expansion in foreign markets, we will be affected by these additional business risks, which may adversely impact
our financial condition or results of operations. In addition, expansion into foreign markets imposes additional burdens on our executive
and administrative personnel, research and sales departments, and general managerial resources. Any efforts to introduce our products
into foreign markets may not be successful, in which case we may have expended significant resources without realizing the expected benefit.

 Risks
Related to Government Regulation and Other Legal Compliance Matters

 We
are subject to extensive regulation by the FDA and other federal and state regulators which could restrict the sales and marketing of
Quell and DPNCheck, as well as other products for which we may seek FDA clearance or approval and could cause us to incur significant
costs.

 We
sell medical devices that are subject to extensive regulation in the United States by the FDA with regard to manufacturing, labeling,
sale, promotion, distribution, shipping and ongoing monitoring and follow-up. Before a new medical device, or a new use of or claim for
an existing product, can be marketed in the United States, it must first be cleared or approved by the FDA. Medical devices may be marketed
only for the indications for which they are approved or cleared. The regulatory review process can be expensive and lengthy. The FDA's
process for granting 510(k) clearance typically takes approximately three to six months, and for De Novo clearance approximately
five months to one year. However, in both cases it can be significantly longer. The process for obtaining a PMA is much more costly and
onerous. By law, the time period designated for the FDA's review of a PMA is 180 days; however, this time is often extended and
it is not uncommon for the PMA review process to take three years or longer from the time the application is filed with the FDA.

 The
FDA may remove our devices from the market or enjoin them from commercial distribution if safety or effectiveness problems develop. Further,
we may not be able to obtain additional 510(k) clearances, De Novo clearances or pre-market approvals for new products or for
modifications to, or additional indications for, our existing products in a timely fashion, or at all. Delays in obtaining future clearances
or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our
revenue and future profitability. We have made modifications to our devices in the past and may make additional modifications in the
future that we believe do not or will not require additional clearances or approvals. If the FDA disagrees, and requires new clearances
or approvals for the modifications, we may be required to recall and to stop marketing the modified devices. If any of these events occurs
or if the FDA takes other enforcement actions, we may not be able to provide our customers with the products they require on a timely
basis, our reputation could be harmed, and we could lose customers and suffer reduced revenues and increased costs.

 We
also are subject to numerous post-marketing regulatory requirements, including the FDA's (i) quality system regulations, which
relate to the design, manufacture, packaging, labeling, storage, installation and servicing of our products; (ii) labeling regulations,
medical device reporting regulations; and (iii) correction and removal reporting regulations. Third-party pharmacies, including online
pharmacies, and other distributors of our products may also be subject to federal, state and local licensing, accreditation and other
regulatory requirements. Our failure or the failure by any manufacturer, pharmacy or distributor of our products to comply with applicable
regulatory requirements could result in enforcement action by the FDA or other regulators or it could result in delays in the distribution
of our products. FDA enforcement actions relating to post-marketing regulatory requirements or other issues may include any of the following:

 warning
 letters, untitled letters, fines, injunctions, product seizures, consent decrees and civil penalties;

 requiring
 repair, replacement, refunds, customer notifications or recall of our products;

 imposing
 operating restrictions, suspension or shutdown of production;

 refusing
 our requests for 510(k) clearance or PMA approval of new products, new intended uses, or modifications to existing products;

 requesting
 voluntary rescission of 510(k) clearances or withdrawing PMA approvals that have already been granted; and

 criminal
 prosecution.

 If
any of these events were to occur, they could harm our reputation, our ability to generate revenues and our profitability.

 Also,
from time to time, legislation is introduced into Congress that could significantly change the statutory provisions governing the approval,
manufacturing and marketing of medical devices. FDA regulations and guidance are often revised or reinterpreted by the agency in ways
that may significantly affect our business and our products. It is impossible to predict whether legislative changes will be enacted,
or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be. The FDA has publicly stated
that it is reevaluating its longstanding 510(k) review program. It is not clear when, or if, the program will be modified and what effect
the modified review process will have on our ability to bring our product candidates to market.

 If
we or our manufacturers fail to comply with the FDA's quality system regulation, the manufacturing and distribution of our products
could be interrupted, and our product sales and operating results could suffer.

 We
and our contract manufacturers are required to comply with the FDA's QSR which is a complex regulation that governs the procedures
and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping
of our devices. The FDA enforces the QSR through periodic inspections. We cannot assure you that our facilities or the facilities of
the manufacturers of our products would pass any future inspection. If our facilities or any of the facilities of the manufacturers of
our products fail an inspection, the manufacturing or distribution of our products could be interrupted and our operations disrupted.
Failure to take adequate and timely corrective action in response to an adverse inspection could result in a suspension or shutdown of
our packaging and labeling operations and the operations of the manufacturers of our products or a recall of our products, or other administrative
or judicial sanctions. If any of these events occurs, we may not be able to provide our customers with the quantity of products they
require on a timely basis, our reputation could be harmed, and we could lose customers and suffer reduced revenues and increased costs.

 We
are subject to Federal Trade Commission regulatory oversight. Exercise of this regulatory oversight could lead to an outcome which would
constrain our marketing of Quell, cause us to incur significant costs and penalties, and adversely affect our financial results.

 Under
the FTC Act, the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices
in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information
and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce. The FTC
has very broad enforcement authority, and failure to abide by the substantive requirements of the FTC Act and other consumer protection
laws can result in administrative or judicial penalties, including civil penalties, or injunctions affecting the manner in which we would
be able to market Quell in the future.

 Our
products may be subject to recalls, even after receiving FDA clearance or approval, which would harm our reputation, business and financial
results.

 We
are subject to the medical device reporting regulations, which require us to report to the FDA if our products may have caused or contributed
to a death or serious injury, or have malfunctioned in a way that would likely cause or contribute to a death or serious injury if the
malfunction were to occur. We are also subject to the correction and removal reporting regulations, which require us to report to the
FDA any field corrections and device recalls or removals that we undertake to reduce a risk to health posed by the device or to remedy
a violation of the FDCA caused by the device which may present a risk to health. In addition, the FDA and similar governmental agencies
in other countries have the authority to require the recall of our products if there is a reasonable probability that the products would
cause serious adverse health consequences or death. A government-mandated or voluntary recall by us could occur as a result of manufacturing
defects, labeling deficiencies, packaging defects or other failures to comply with applicable regulations. Any recall would divert management
attention and financial resources and harm our reputation with customers and could have a material adverse effect on our financial condition
and results of operations.

 We
are subject to federal and state laws prohibiting "kickbacks" and false or fraudulent claims, which, if violated, could subject
us to substantial penalties. Additionally, any challenge to or investigation into our practices under these laws could cause adverse
publicity and be costly to respond to, and thus could harm our business.

 A
federal law commonly known as the federal anti-kickback law, and several similar state laws, prohibit the payment of any remuneration
that is intended to induce physicians or others either to refer patients or to acquire or arrange for or recommend the acquisition of
health care products or services. These laws constrain a medical device company's sales, marketing and other promotional activities
by limiting the kinds of business relationships and financial arrangements, including sales programs we may have with hospitals, pharmacies
(including online pharmacies), physicians or other potential purchasers of medical devices. Other federal and state laws generally prohibit
individuals or entities from knowingly presenting, or causing to be presented, claims for payment to Medicare, Medicaid or other third-party
payers that are false or fraudulent, or for items or services that were not provided as claimed. We rely on third-party health care organizations,
pharmacies (including online pharmacies) and distributors to fulfill orders of our products. In addition, from time to time, we may provide
coding and billing information as product support to purchasers of our products. Our relationships with health care organizations, pharmacies
and other third parties could be scrutinized under federal and state health care laws such as the anti-kickback laws. Anti-kickback and
false claims laws prescribe civil and criminal penalties for noncompliance, which can be quite substantial including exclusion from participation
in federal health care programs. A number of states have enacted laws that require pharmaceutical and medical device companies to monitor
and report payments, gifts and other remuneration made to physicians and other health care professionals and health care organizations.
Some state statutes, such as the one in Massachusetts, impose an outright ban on gifts to physicians. These laws are often referred to
as "gift ban" or "aggregate spend" laws and carry substantial fines if they are violated. Similar legislation,
known as the Physician Payments Sunshine Act, was enacted by Congress in 2014. In the event that we are found to have violated these
laws or determine to settle a claim that we have done so, our business may be materially adversely affected as a result of any payments
required to be made, restrictions on our future operations or actions required to be taken, damage to our business reputation or adverse
publicity in connection with such a finding or settlement or other adverse effects relating thereto. Additionally, even an unsuccessful
challenge or investigation into our practices could cause adverse publicity, and be costly to respond to, and thus could harm our business
and results of operations.

 If
we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to civil or criminal
penalties, which could increase our liabilities, damage our reputation and harm our business.

 There
are a number of federal and state laws protecting the confidentiality of individually identifiable patient health information, including
patient records, and restricting the use and disclosure of that protected information. In particular, the U.S. Department of Health and
Human Services promulgated patient privacy rules under the Health Insurance Portability and Accountability Act of 1996. These privacy
rules protect medical records and other personal health information by limiting their use and disclosure, giving individuals the right
to access, amend and seek accounting of their own health information and limiting most use and disclosures of health information to the
minimum amount reasonably necessary to accomplish the intended purpose. Any failure or perceived failure by us or any third-party distributors,
pharmacies, service providers, contractors or consultants to comply with privacy, confidentiality, data security or similar obligations,
or any data security incidents or other security breaches that result in the accidental, unlawful or unauthorized access to, use of,
release of, or transfer of sensitive information, may result in negative publicity, harm to our reputation, governmental investigations,
enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could
result in claims by third parties, including class action lawsuits, any of which could have a material adverse effect on our reputation,
business, financial condition or results of operations.

 The
use of our products could result in product liability claims that could be expensive, damage our reputation and harm our business.

 Our
business exposes us to an inherent risk of potential product liability claims related to the manufacturing, marketing and sale of medical
devices. The medical device industry historically has been litigious, and we face financial exposure to product liability claims if the
use of our products were to cause or contribute to injury or death. Our products may be susceptible to claims of injury because their
use involves the electric stimulation of a patient's nerves. Although we maintain product liability insurance for our products
and other commercial insurance, the coverage limits of these policies may not be adequate to cover future claims. We may be unable to
maintain sufficient product liability or other commercial insurance on acceptable terms or at reasonable costs, and this insurance may
not provide us with adequate coverage against potential liabilities. A successful claim brought against us in excess of, or outside of,
our insurance coverage could have a material adverse effect on our financial condition and results of operations. A product liability
claim, regardless of its merit or eventual outcome, could result in substantial costs to us, a substantial diversion of management attention
and adverse publicity. A product liability claim could also harm our reputation and result in a decline in revenues and an increase in
expenses.

 Our
products are complex in design, and defects may not be discovered prior to shipment to customers, which could result in warranty obligations
or product liability or other claims, reducing our revenues and increasing our costs and liabilities.

 We
depend upon third parties for the manufacture of our products or components. Our products, particularly our electrodes, require a significant
degree of technical expertise to produce. If these manufacturers fail to produce our products to specification, or if the manufacturers
use defective materials or workmanship in the manufacturing process, the reliability and performance of our products will be compromised.

 If
our products contain defects that cannot be repaired quickly, easily and inexpensively, we may experience:

 loss
 of customer orders and delay in order fulfillment;

 damage
 to our brand reputation;

 increased
 cost of our warranty program due to product repair or replacement;

 inability
 to attract new customers;

 diversion
 of resources from our manufacturing and research and development departments into our service department; and

 legal
 action.

 The
occurrence of any one or more of the foregoing could harm our reputation and materially reduce our revenues and increase our costs and
liabilities.

 Risks
Related to Our Intellectual Property

 The
patent rights we rely upon to protect the intellectual property underlying our products may not be adequate, which could enable third
parties to use our technology and would harm our ability to compete in the market.

 Our
success will depend in part on our ability to develop or acquire commercially valuable patent rights and to protect these rights adequately.
The risks and uncertainties that we face with respect to our patents and other related rights include the following:

 the
 pending patent applications we have filed or to which we have exclusive rights may not result in issued patents or may take longer
 than we expect to result in issued patents;

 the
 claims of any patents that are issued may not provide meaningful protection;

 we
 may not be able to develop additional proprietary technologies that are patentable;

 other
 parties may challenge patents, patent claims or patent applications licensed or issued to us; and

 other
 companies may design around technologies we have patented, licensed or developed.

 Our
issued and filed patents for our wearable therapeutic products are recent. With regard to our legacy neurodiagnostic products, our issued
design patents began to expire in 2015, and our issued utility patents began to expire in 2017. In particular, seven of our issued U.S.
utility patents covering various aspects of the legacy neurodiagnostic business expired on the same day in 2017. Although the patent
protection for material aspects of these products covered by the claims of the patents were lost at that time, we have additional patents
and patent applications directed to other novel inventions that have patent terms extending into 2027 and beyond

 In
addition, the laws of other countries may not protect our patent rights to the same extent as the laws of the United States. Consequently,
we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling
or importing products made using our inventions in and into the United States or other jurisdictions. Many companies have encountered
significant difficulties in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain
countries, including certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property
protection, particularly those relating to medical devices, which could make it difficult for us to stop the infringement of our patent
rights or the marketing of competing products in violation of our intellectual property and proprietary rights generally. For this or
other reasons, we may not pursue or obtain patent protection in all major markets or may not obtain protection that enables us to prevent
the entry of third parties onto the market.

 Additionally,
proceedings to enforce our intellectual property and proprietary rights in foreign jurisdictions could result in substantial costs and
divert our efforts and attention from other aspects of our business, put our patents at risk of being invalidated or interpreted narrowly,
put our patent applications at risk of not issuing and provoke third parties to assert claims against us. We may not prevail in any lawsuits
that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to
enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage
from the intellectual property that we develop or license.

 Further,
many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition,
many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent
owner may have limited remedies, which could materially diminish the value of such patent. If we are forced to grant a license to third
parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition,
results of operations and prospects may be adversely affected.

 In
addition, our patent rights underlying our products may not be adequate, and our competitors or customers may design around our proprietary
technologies or independently develop similar or alternative technologies or products that are equal or superior to our technology and
products without infringing on any of our patent rights. In addition, the patents licensed or issued to us may not provide a competitive
advantage. If any of these events were to occur, our ability to compete in the market would be harmed.

 Other
rights and measures we have taken to protect our intellectual property may not be adequate, which would harm our ability to compete in
the market.

 In
addition to patents, we rely on a combination of trade secrets, copyright and trademark laws, confidentiality, nondisclosure and assignment
of invention agreements and other contractual provisions and technical measures to protect our intellectual property rights. We rely
on trade secrets to protect the technology and algorithms we use in our customer data processing and warehousing information system.
While we currently require employees, consultants and other third parties to enter into confidentiality, non-disclosure or assignment
of invention agreements or a combination thereof where appropriate, any of the following could still occur:

 the
 agreements may be breached or not enforced in a particular jurisdiction;

 we
 may have inadequate remedies for any breach;

 trade
 secrets and other proprietary information could be disclosed to our competitors; or

 others
 may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets
 or disclose such technologies.

 If,
for any of the above reasons, our intellectual property is disclosed or misappropriated, it would harm our ability to protect our rights
and our competitive position.

 We
may need to initiate lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive and,
if we lose, could cause us to lose some of our intellectual property rights, which would harm our ability to compete in the market.

 We
rely on patents to protect a portion of our intellectual property and our competitive position. Patent law relating to the scope of claims
in the technology fields in which we operate is still evolving and, consequently, patent positions in the medical device industry are
generally uncertain. In order to protect or enforce our patent rights, we may initiate patent litigation against third parties, such
as infringement suits or interference proceedings. Litigation may be necessary to:

 assert
 claims of infringement;

 enforce
 our patents;

 protect
 our trade secrets or know-how; or

 determine
 the enforceability, scope and validity of the proprietary rights of others.

 Any
lawsuits that we initiate could be expensive, take significant time and divert management's attention from other business concerns.
Litigation also puts our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing.
Additionally, we may provoke third parties to assert claims against us. We may not prevail in

 any
lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially valuable. The occurrence of any
of these events could harm our business, our ability to compete in the market or our reputation.

 Claims
that our products infringe on the proprietary rights of others could adversely affect our ability to sell our products and increase our
costs.

 Substantial
litigation over intellectual property rights exists in the medical device industry. We expect that our products could be increasingly
subject to third-party infringement claims as the number of competitors grows and the functionality of products and technology in different
industry segments overlap. Third parties may currently have, or may eventually be issued, patents on which our products or technologies
may infringe. Any of these third parties might make a claim of infringement against us. Any litigation regardless of its impact would
likely result in the expenditure of significant financial resources and the diversion of management's time and resources. In addition,
litigation in which we are accused of infringement may cause negative publicity, adversely impact prospective customers, cause product
shipment delays or require us to develop non-infringing technology, make substantial payments to third parties, or enter into royalty
or license agreements, which may not be available on acceptable terms, or at all. If a successful claim of infringement were made against
us and we could not develop non-infringing technology or license the infringed or similar technology on a timely and cost-effective basis,
our revenues may decrease substantially and we could be exposed to significant liability.

 Risks
Related to Our Common Stock

 Future
sales of securities may cause our stock price to decline as a result of the dilution which will occur to existing stockholders.

 Until
such time as we are profitable, as to which we can make no assurance, we may need additional funds to develop our business and sustain
our operations. We have sold shares of common stock, convertible preferred stock and warrants on several occasions in the past, and any
additional sales of shares of our common stock or other securities exercisable into our common stock are likely to have a dilutive effect
on some or all of our then existing stockholders. Resales of newly issued shares in the open market could also have the effect of lowering
our stock price, thereby increasing the number of shares we may need to issue in the future to raise the same dollar amount and consequently
further diluting our outstanding shares.

 The
perceived risk associated with the possible sale of a large number of shares could cause some of our stockholders to sell their stock,
thus causing the price of our stock to decline. In addition, actual or anticipated downward pressure on our stock price due to actual
or anticipated issuances or sales of stock could cause some institutions or individuals to engage in short sales of our common stock,
which may itself cause the price of our stock to decline.

 If
our stock price declines, it may be difficult to raise additional capital and it could impair our ability to attract and retain qualified
employees, reduce the liquidity of our common stock, and result in the delisting of our common stock from Nasdaq.

 The
trading price of our common stock has been volatile and is likely to be volatile in the future.

 The
trading price of our common stock has been highly volatile. For the two-year period ended December 31, 2024, our stock price has fluctuated
from a low of $2.66 to a high of $17.44. The market price for our common stock will be affected by a number of factors, including:

 the
 denial or delay of regulatory clearances or approvals for our products under development or receipt of regulatory approval of competing
 products;

 our
 ability to accomplish clinical, regulatory and other product development and commercialization milestones and to do so in accordance
 with our timing estimates;

 changes
 in policies affecting third-party coverage and reimbursement in the United States and other countries;

 changes
 in government regulations and standards affecting the medical device industry and our products;

 ability
 of our products to achieve market success;

 the
 performance of third-party contract manufacturers and component suppliers;

 actual
 or anticipated variations in our results of operations or those of our competitors;

 announcements
 of new products, technological innovations or product advancements by us or our competitors;

 developments
 with respect to patents and other intellectual property rights;

 sales
 of common stock or other securities by us or our stockholders in the future;

 additions
 or departures of key scientific or management personnel;

 disputes
 or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection
 for our technologies;

 trading
 volume of our common stock;

 regulatory
 inquiries or developments affecting our products;

 changes
 in earnings estimates or recommendations by securities analysts, failure to obtain or maintain analyst coverage of our common stock
 or our failure to achieve analyst earnings estimates;

 public
 statements by analysts or clinicians regarding their perceptions of our clinical results or the effectiveness of our products;

 decreases
 in market valuations of medical device companies; and

 general
 market conditions and other factors unrelated to our operating performance or the operating performance of our competitors.

 The
stock prices of many companies in the medical device industry have experienced wide fluctuations that have often been unrelated to the
operating performance of these companies. Periods of volatility in the market price of a company's securities can result in securities
class action litigation against a company. If class action litigation is initiated against us, we may incur substantial costs and our
management's attention may be diverted from our operations, which could significantly harm our business.

 We
have, in the past, failed to satisfy certain continued listing requirements on Nasdaq and could fail to satisfy those requirements again
in the future which could affect the market price of our common stock and liquidity and reduce our ability to raise capital.

 We
have, in the past, failed to satisfy certain continued listing requirements on Nasdaq. For example, as previously disclosed, on August
8, 2023, we received a deficiency letter from the Nasdaq Listing Qualifications Department notifying us that because the closing bid
price of our common stock had fallen below $1.00 per share for 30 consecutive business days, we no longer met the bid price requirement.
We were able to regain compliance with the minimum bid price requirement within the prescribed 180-day compliance period by effecting
a reverse stock split, and currently, our common stock trades on Nasdaq. However, if we fail to maintain compliance with any Nasdaq listing
requirements in the future, including minimum bid price for our common stock, we could be delisted and our stock would be considered
a penny stock under regulations of the SEC and would therefore be subject to rules that impose additional sales practice requirements
on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements could discourage
broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of our common stock and
your ability to sell our securities in the secondary market.

 Anti-takeover
provisions in our organizational documents and Delaware law, and the shareholder rights plan that we adopted in 2007 and updated in 2021,
may discourage or prevent a change of control, even if an acquisition would be beneficial to our stockholders, which could affect our
stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

 Our
certificate of incorporation and bylaws contain provisions that could delay or prevent a change of control of our Company or changes
in our Board of Directors that our stockholders might consider favorable. Some of these provisions:

 authorize
 the issuance of preferred stock which can be created and issued by the Board of Directors without prior stockholder approval, with
 rights senior to those of our common stock;

 provide
 for a classified Board of Directors, with each director serving a staggered three-year term;

 prohibit
 our stockholders from filling board vacancies, calling special stockholder meetings, or taking action by written consent;

 provide
 for the removal of a director only with cause and by the affirmative vote of the holders of 75% or more of the shares then entitled
 to vote at an election of our directors; and

 require
 advance written notice of stockholder proposals and director nominations.

 We
have also adopted a shareholder rights plan that could make it more difficult for a third party to acquire, or could discourage a third
party from acquiring, us or a large block of our common stock. A third party that acquires 15% or more of our common stock could suffer
substantial dilution of its ownership interest under the terms of the shareholder rights plan through the issuance of common stock to
all stockholders other than the acquiring person.

 In
addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business
combinations with stockholders owning 15% or more of our outstanding voting stock. These and other provisions in our certificate of incorporation,
bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our Board of Directors
or initiate actions that are opposed by our then-current Board of Directors, including a merger, tender offer, or proxy contest involving
our Company. Any delay or prevention of a change of control transaction or changes in our Board of Directors could cause the market price
of our common stock to decline.

 We
do not intend to pay cash dividends.

 We
have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings
for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. As
a result, capital appreciation, if any, of our common stock will be our stockholders' sole source of potential gain for the foreseeable
future.

 ITEM
1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM
1C. CYBERSECURITY

 We
operate in the medical device industry, which is subject to various cybersecurity risks that could adversely affect our business, financial
condition, and results of operations, including intellectual property theft; fraud; extortion; harm to employees or customers; violation
of privacy laws and other litigation and legal risk; and reputational risk. We have initiated a risk-based approach designed to identify
and assess the cybersecurity threats that could affect our business and information systems. Our strategy is to maintain a high level
of risk awareness, identify critical IT assets, regularly update or replace those assets, and systematically perform vulnerability testing,
and to promptly remediate deficiencies. Our cybersecurity program is aligned with industry standards and best practices, such as the
National Institute of Standards and Technology (NIST) Cybersecurity Framework.

 We
have adopted various tools and methodologies to manage cybersecurity risk that perform testing and scrutiny on a regular cadence. We
have also adopted a process of monitoring and evaluating our cybersecurity posture and performance on an ongoing basis through scheduled
vulnerability scans, penetration tests and threat intelligence feeds. We require third-party service providers with access to personal,
confidential or proprietary information to implement and maintain comprehensive cybersecurity practices consistent with applicable legal
standards and industry best practices.

 Our
business depends on the availability, reliability, and security of our information systems, networks, data, and intellectual property.
Any disruption, compromise, or breach of our systems or data due to a cybersecurity threat or incident could adversely affect our operations,
customer service, product development, and competitive position. They may also result in a breach of our contractual obligations or legal
duties to protect the privacy and confidentiality of our stakeholders. Such a breach could expose us to business interruption, lost revenue,
ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory
scrutiny and actions, reputational harm, customer dissatisfaction, harm to our vendor relationships, or loss of market share.

 Our
Board of Directors, the Audit Committee and the Cyber Committee, which is chaired by the Chief Executive Officer and staffed by the IT
Director, Chief Financial Officer, Corporate Controller and other management employees, are responsible for overseeing cybersecurity
risks and risk management. The Board has assigned oversight responsibility for cybersecurity to the Audit Committee, which is in regular
communication with management concerning cybersecurity threats and incidents. The Audit Committee reviews management assessment of cyber
controls, control testing and outcomes. The Audit Committee is responsible for keeping the Board informed of significant cybersecurity
developments including incidents which might potentially have a material effect on the Company. The Cyber Committee is responsible for
evaluating cyber threats, the potential effect on operations and scope of the threat. Threats or incidents which the Cyber Committee
has judged to have potentially material consequences will be communicated to the Audit Committee. A meeting of the full Board of Directors,
including the Audit Committee, will be convened within 48 hours of the Cyber Committee assessment. If the Board determines that the threat
or incident is material, Form 8-K will be finalized and filed within four days following the determination, as required under SEC rules.

 ITEM
2. PROPERTIES

 Our
headquarters, engineering activities, and manufacturing and fulfillment activities are located in an approximately 10,000 square foot
leased facility in Woburn, Massachusetts. This facility is adequate for our needs during the foreseeable future.

 ITEM
3. LEGAL PROCEEDINGS

 The
Company is not party to or aware of any legal proceedings.

 ITEM
4. MINE SAFETY DISCLOSURES

 Not
applicable.

 PART
II

 ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market
Information

 Our
common stock is traded on the Nasdaq Capital Market under the symbol "NURO".

 Stockholders

 On
March 28, 2025, there were approximately 40 stockholders of record of our common stock. This number does not include stockholders for
whom shares were held in a "nominee" or "street" name. On March 28, 2025, the last reported sale price per share
of our common stock on the Nasdaq Capital Market was $4.43.

 Unregistered
Sales of Securities

 Not
applicable

 Issuer
Purchases of Equity Securities

 Not
applicable

 ITEM
6. [RESERVED]

 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 You
should read the following discussion of our financial condition and results of operations in conjunction with our selected financial
data, our financial statements, and the accompanying notes to those financial statements included elsewhere in this Annual Report on
Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. For a description of factors that
may cause our actual results to differ materially from those anticipated in these forward-looking statements, please refer to the section
titled "Risk Factors", contained in Item 1A of this Annual Report on Form 10-K.

 Our
Business

 NeuroMetrix
is a commercial stage neurotechnology company based in Woburn, MA whose mission is to improve individual and population health through
innovative medical devices and technology solutions for pain syndromes and neurological disorders. The Company has created the market
for point-of-care nerve testing and introduced sophisticated wearable technology for chronic pain syndrome. The Company's two leading
commercial products treat chronic pain syndromes through wearable neuromodulation technology (Quell) and assess peripheral neuropathy
with point-of-care diagnostic technology (DPNCheck). The Company holds extensive, proprietary intellectual property on its products.

 Recent
Developments

 In
early 2024, the Company initiated a review of its strategic options with the objective of enhancing shareholder value. The review focused
on the Company's commercial activities and structure as well as business combination opportunities. The undertaking contributed
to several outcomes:

 A
 substantial reduction-in-force was implemented at the end of Q1 2024. Employee headcount
 was reduced by 50%. This had the effect of reducing operating expenses and shifting personnel
 costs toward a more variable cost structure.

 Our
 legacy ADVANCE business was terminated in Q2 2024. This business had ceased to be a positive
 contributor of cash flow.

 The
 Board of Directors was strengthened in Q2 2024. A new, independent director, Joshua S. Horowitz,
 was added to the Board. Mr. Horowitz brings valuable experience in financial management,
 business strategy, investor relations and business combinations.

 The
 Company's ATM common stock facility pursuant to an At Market Issuance Sales Agreement
 with Ladenburg Thalmann & Co. Inc. was terminated.

 The
 Company entered into the Merger Agreement on December 17, 2024 with electroCore and Merger
 Sub. electroCore is a commercial stage bioelectronic medicine and general wellness company
 dedicated to improving health and quality of life through its nVNS technology platform. It
 is focused on delivering non-invasive neuromodulation via its nVNS platform technology to
 deliver better health and treatment of certain medical conditions such as primary headache
 and to promote general wellness and human performance.

 Following
 the signing of the Merger Agreement, the Company entered into the Fukuda Asset Purchase Agreement
 on January 16, 2025 with Fukuda for the sale of the Company's DPNCheck business in
 Japan. The Fukuda Asset Purchase Agreement has the potential to deliver approximately $2
 million in sales proceeds, comprised of an initial upfront payment of $400,000 to the Company
 and up to $1.5 million in subsequent milestone payments.

 Proposed
Merger

 Merger
Agreement

 On
December 17, 2024, the Company entered into the Merger Agreement with electroCore and Merger Sub, a wholly owned subsidiary of electroCore,
providing for Merger of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of electroCore.

 Subject
to the terms of the Merger Agreement, if the Merger is completed, each share of common stock of the Company outstanding immediately prior
to the Effective Time will be cancelled and converted into the right to receive (i) Per Share Cash Consideration equal to a pro rata
share of the Company's balance of Net Cash at the Effective Time, after deduction of certain pro rata payments that will be due
in accordance with the MRIP, without interest and (ii) one CVR, representing the right to receive contingent payments subject to the
terms and conditions set forth in the CVR Agreement (the consideration contemplated by (i) and (ii), together, the Merger Consideration).

 In
addition, at the Effective Time, each share of preferred stock of the Company outstanding immediately prior to the Effective Time will
continue to be outstanding after the Effective Time, except that thereafter, such shares of preferred stock will, in accordance with
their own terms and the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock of
the Company, no longer be convertible into common stock, but will instead be converted into the right to receive the Merger Consideration
payable in respect of the shares of common stock into which such shares of preferred stock would have been convertible.

 As
of the Effective Time, each RSA with respect to shares of common stock that is then outstanding and unvested will be converted into the
right to receive consideration as follows (notwithstanding any vesting conditions, restrictions or risk of forfeiture): each RSA for
which the holder thereof made a Section 83(b) Election
 will be cancelled and converted into the right to receive the Merger Consideration with respect
to each share of common stock subject to such RSA in accordance with the Merger Agreement and the CVR Agreement, and each RSA for which
the holder thereof did not make a timely and valid Section 83(b) Election will be cancelled and converted into the right to receive cash
consideration and one CVR with respect to each share of common stock subject to such RSA immediately prior to the Effective Time.

 At
the Effective Time, each option to purchase common stock that is outstanding and unvested immediately prior to the Effective Time (whether
time- or performance-based) will fully vest and become exercisable, and (i) each option that is then outstanding and unexercised and
which has a per share exercise price that is less than the Per Share Cash Consideration will be cancelled and converted into the right
to receive an amount in cash equal to: (a) the excess, if any, of the Per Share Cash Consideration over the exercise price per share
of such option, multiplied by the number of shares of common stock underlying such option and (b) one CVR with respect to each share
of common stock subject to such option immediately prior to the Effective Time; and (ii) each option that is then outstanding and unexercised
and that has an exercise price per share that is equal to or greater than the Per Share Cash Consideration will be cancelled with no
consideration payable in respect thereof.

 At
the Effective Time, each RSU that is then outstanding will automatically be cancelled and converted into the right to receive (i) an
amount in cash equal to the product of (A) the number of shares of common stock then underlying such RSU multiplied by (B) the Per Share
Cash Consideration, without any interest thereon and (ii) one CVR with respect to each share of common stock subject to such RSU immediately
prior to the Effective Time.

 Effective
as of the Effective Time, subject to the MRIP and subject to the Company's receipt of an executed general release of claims, each
eligible Participant will have the right to receive (a) an amount in cash equal to (i) such Participant's percentage interest set
forth in the MRIP, multiplied by (ii) the aggregate amount of Net Cash, as determined pursuant to the Merger Agreement; and (b) upon
the making of any distributions pursuant to the CVR Agreement, such amounts in cash equal to (i) such Participant's percentage
interest set forth in the MRIP, multiplied by (ii) the gross proceeds in respect of the applicable distribution period under the CVR
Agreement.

 Consummation
of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, without limitation, the absence of
certain legal impediments, the approval by the holders of a majority of the outstanding shares of common stock entitled to vote on the
Merger, the determination of Net Cash pursuant to the Merger Agreement, the filing by the Company of this Annual Report on Form 10-K,
the parties having performed, or complied with, in all material respects its agreements, covenants and other obligations required to
be performed or complied with by the Merger Agreement at or prior to the closing date of the Merger, the representations and warranties
of the parties being true and correct (subject in certain instances to materiality qualifiers), there having been no material adverse
effect on the Company since the signing of the Merger Agreement, and the Company having Net Cash of at least $8,000,000.

 The
Merger Agreement includes covenants customary for a transaction of this nature, including non-solicitation covenants as well as covenants
regarding the operation of the business of the Company and its subsidiaries between signing of the Merger Agreement and the Effective
Time.

 The
Merger Agreement contains certain termination rights for the Company and electroCore. Upon termination of the Merger Agreement under
specified circumstances, the Company will be required to pay electroCore a termination fee of $500,000 or, in certain other specified
circumstances, reimburse electroCore for all reasonable out-of-pocket fees and expenses (up to a maximum of $250,000 or $500,000, depending
on the circumstances upon which such termination occurs) incurred by electroCore in connection with the Merger Agreement and the transactions
contemplated thereby.

 On March 21, 2025, the Company held a special meeting of stockholders,
where it obtained approval of the Merger Agreement and the transactions contemplated thereunder by the holders of a majority of the outstanding
shares of common stock. If
the Merger is consummated, our common stock will be delisted from the Nasdaq Capital Market and deregistered under the Exchange Act,
and we will cease to be a publicly traded company. The Merger is expected to close early in the second quarter of 2025.

 Contingent
Value Rights Agreement

 At
the Effective Time, electroCore will enter into the CVR Agreement with a rights agent, pursuant
to which the holders of common stock, RSAs, RSUs and, if and when applicable pursuant to the terms of the Merger Agreement, preferred
stock and options may become entitled to receive cash payments contingent upon and subject to the receipt by the Company of payments
in connection with the sale of our products under the Quell product line or proceeds from one or more agreements providing for disposition
of our DPNCheck product line and upon the achievement of certain milestones related thereto.

 When
issued, each CVR will entitle the holder, over the term of the CVR Agreement, to receive a contingent payment in the form of a distribution
calculated as a portion of the proceeds, if any, during the applicable distribution period under the CVR Agreement, subject to certain
adjustments and deduction of certain expenses pursuant to the CVR Agreement.

 The
CVR Agreement has a term commencing on the Effective Date and ending on the earlier of (a) December 31 of the calendar year in which
electroCore will have caused to be paid to the holders pursuant to the terms of the CVR Agreement all distributions with respect to all
payments (including any contingent payments) contemplated to be made, and (b) December 31 of the calendar year in which the five-year
anniversary of the Effective Time shall have occurred (provided that if such five-year anniversary is during the month of December, such
date will be extended until March 31 of the immediately subsequent calendar year).

Sale to Fukuda

 Following
the signing of the Merger Agreement, on January 16, 2025, the Company entered the Fukuda Asset Purchase Agreement, pursuant to which
the Company has agreed to sell its rights, title and interest in the assets related to its DPNCheck product line for use in the Japanese
market, including relevant intellectual property rights.

 In
connection with the Company's entry into the Fukuda Asset Purchase Agreement, the Company and Fukuda also entered into a Patent
Assignment Agreement, dated January 16, 2025, whereby the Company assigned to Fukuda certain intellectual property rights in Japan relating
to its DPNCheck product line, as well as an Intellectual Property License Agreement, dated January 16, 2025, whereby the Company granted
to Fukuda a limited, non-exclusive, royalty-free license in Japan to certain materials and know-how in connection with the use of the
intellectual property purchased pursuant to the Fukuda Asset Purchase Agreement.

to the Fukuda Asset Purchase Agreement, Fukuda agreed to pay the Company an initial payment of $400,000 in cash and two milestone payments
totaling up to $1.5 million after such closing payable upon the achievement of certain milestones. The Company anticipates the completion
of the first milestone and milestone payment by March 31, 2025 and the second milestone and milestone payment by April 2025.

 Background
of the Company

 Early
detection of peripheral neuropathies, such as DPN, is important because there are no treatment options once the nerves have degenerated.
Currently available diagnostic methods for peripheral neuropathies range from a simple monofilament test for lack of sensory perception
in the feet to a nerve conduction study performed by a specialist. Our DPNCheck nerve conduction technology provides a rapid, low cost,
quantitative test for peripheral neuropathies, including DPN. It addresses an important medical need and is particularly effective in
screening large populations. DPNCheck has been validated in multiple clinical studies

 In
early 2023, CMS adopted significant changes to its MA HCC risk adjustment payments and to its MA RADV audit practices. These changes
created significant uncertainty in the market among participating healthcare providers and insurers. Subsequently, CMS confirmed that
RADV changes would be implemented immediately and applied retroactively, and that changes in HCC payments would be phased in over a three-year
period. The changes to HCC risk factor coding significantly reduced CMS payments for population screening for various conditions, including
for neuropathy. During 2023 and 2024 we experienced significant reductions in MA sales as a result of these CMS reimbursement changes.
It is unlikely that there will be a near-term recovery from the decline in revenue of the DPNCheck MA business.

 Chronic
pain is a significant public health problem. It is defined by the NIH as pain lasting more than 12 weeks. This contrasts with acute pain
which is a normal bodily response to injury or trauma. Chronic pain conditions include low back pain, arthritis, fibromyalgia, neuropathic
pain, and cancer pain, among many others. Chronic pain may be triggered by an injury or there may be an ongoing cause such as disease
or illness. There may also be no clear cause. Chronic pain can also lead to other health problems which can include fatigue, sleep disturbance
and mood changes, which cause difficulty in carrying out important activities and contributing to disability and despair. In general,
chronic pain cannot be cured. Treatment of chronic pain is focused on reducing pain and improving function. The goal is effective pain
management.

 Quell
is our wearable neuromodulation technology for chronic pain. It has been refined over the past eight years with feedback from over 200,000
chronic pain patients and is protected by over 20 U.S. utility patents. Patients control and personalize the technology with a mobile
phone app, and their utilization of the devices and certain clinical metrics may be tracked in the Quell Health Cloud. The degree of
technological sophistication, combined with our extensive consumer experience and the compelling results of clinical studies, gives us
the opportunity to leverage this technology base into a portfolio of Quell-based prescription (Rx) wearable neurotherapeutics.

 In
2021, Quell received Breakthrough Device Designation from the FDA for a fibromyalgia indication. A pivotal double-blind, randomized,
sham-controlled clinical study of Quell - Fibromyalgia was completed, and a De Novo marketing authorization was obtained from
the FDA in 2022. Quell – Fibromyalgia is indicated for use as an aid for reducing the symptoms of fibromyalgia in adults with high
pain sensitivity. This Rx product was launched into the domestic market in late 2022.

 Quell
also received FDA Breakthrough Device Designation in early 2022 for the treatment of chronic CIPN. A CIPN double-blind, randomized, sham-controlled
clinical study employing Quell, funded by the NCI and the NIH, was completed in 2023. The Company intends to initiate a De Novo
regulatory submission for Quell – CIPN and is evaluating the potential timing. A successful De Novo regulatory review by
FDA could lead to market introduction of Quell - CIPN approximately nine months to one year following submission. This would be the second
product in the Company's emerging portfolio of Quell-based Rx wearable therapeutics. A similar approach to other disease indications
involving chronic pain could include Fibromyalgia-like Long COVID, Chronic Low Back Pain, and COPC.

 Results
of Operations

 Comparison
of Years Ended December 31, 2024 and December 31, 2023

 Fiscal Year

 Increase (Decrease)

 2024

 2023

 Amount

 Percent

 Revenues

 $
 3,032,837

 $
 5,901,425

 $
 (2,868,588
)

 (48.6
)%

 Gross profit

 $
 1,679,667

 $
 3,947,413

 $
 (2,267,746
)

 (57.4
)%

 –% of revenues

 55.4
 %

 66.9
 %

 Operating expenses

 $
 10,461,704

 $
 11,098,934

 $
 (637,230
)

 (5.7
)%

 Other income

 $
 975,982

 $
 622,034

 $
 353,948

 56.9
 %

 $
 (7,806,055
)

 $
 (6,529,487
)

 $
 (1,276,568
)

 19.6
 %

 Net loss per share of common stock

 $
 (3.96
)

 $
 (6.27
)

 $
 2.31

 (36.8
)%

 Revenues

 Revenues
for 2024 decreased by $2.9 million, or 48.6%, from 2023. DPNCheck contributed the majority of revenues in both years. It posted a revenue
drop of 55.0% in 2024 following a revenue drop of 25.2% in 2023. The reductions in DPNCheck revenue were primarily attributable to adverse
CMS reimbursement changes in the Medicare Advantage market which were introduced in 2023. This caused many healthcare providers to reduce
patient screening for various conditions, including for peripheral neuropathy. Also, sales of accessories for the legacy ADVANCE business
were terminated in mid-2024 due to erosion of sales activity and cash flow. This was partially offset by Quell revenues which increased
21.1% from 2023 and constituted 23.5% of revenue in 2024.

 Gross
Profit

 Gross
profit for 2024 decreased by $2.3 million or 57.4% from 2023 primarily due to the drop in DPNCheck sales and the termination of ADVANCE
sales. The gross margin rate contracted by 11.5 percentage points to 55.4% reflecting decreased production efficiency, higher unabsorbed
costs relative to production volume and unfavorable revenue mix from the decline in DPNCheck sales.

 Operating
Expenses

 Operating
expenses declined in 2024 by $0.6 million or 5.7% from 2023. The decrease reflected actions taken by the Company to reduce operating
expenses and conserve cash due to the impact of changes in CMS reimbursement, partially offset by costs associated with the Company's
evaluation of strategic alternatives.

 Research
and development spending in 2024 of $1.8 million decreased by 35.5% or $1.0 million from 2023, with reduced engineering staff and a shift
to variable cost contractor outsourcing support. Sales and marketing spending of $2.3 million in 2024 decreased by $1.0 million or 30.5%
from 2023 due primarily to a reduction in personnel for DPNCheck and Quell promotion. General and administrative costs of $6.3 million
increased by $1.4 million or 27.8% from 2023, primarily reflecting outside professional services for legal, banking and financial support
during the strategic process which led to the proposed Merger described above under "—Proposed Merger". Personnel costs
(including equity compensation) declined by $372 thousand or 18.2% and professional services costs increased by $1.6 million or 236.4%.

 Other
Income

 Other
income increased by $354 thousand or 56.9% from 2023, reflecting the offsetting effects of the timing of investment maturity in the Company's
securities portfolio and the $4.6 million contraction of the portfolio to support operating costs.

 Net
loss

 Net
loss in 2024 was $7.8 million or $3.96 per share of common stock versus a net loss in 2023 of $6.5 million or $6.27 per share of common
stock. Shares of common stock outstanding were 2,051,028 at December 31, 2024 versus 1,524,939 at December 31, 2023.

 Liquidity
and Capital Resources

 The
following table contains certain key performance indicators we believe depict our liquidity and cash flow position:

 Years Ended December 31,

 2024

 2023

 Cash, cash equivalents and marketable securities

 $
 13,095,034

 $
 17,997,151

 Working capital

 $
 14,001,035

 $
 19,613,803

 Current ratio

 14.8

 16.8

 Net debt position

 $
 (12,082,558
)

 $
 (16,664,027
)

 Days sales outstanding

 42.2

 35.6

 Inventory turnover

 0.9

 1.2

 Our
primary sources of liquidity are cash, cash equivalents and marketable securities, collections on sales of our products, and net proceeds
from equity sales. We believe that our resources are sufficient to fund our cash requirements over at least the next twelve months from
the date of issuance of the financial statements.

 As
of December 31, 2024, we had $13.1 million in cash, cash equivalents and marketable securities, working capital of $14 million, and a
current ratio of 14.8. We had no term debt or borrowings at the end of 2024 and 2023, which contributed to a negative net debt position
at each year end. (Net debt position is defined as short-term and long-term financial obligations, less cash, cash equivalents and marketable
securities.) These measures indicate adequate liquidity and capitalization of the company.

 Days
sales outstanding (DSO) reflect our customer payment terms which vary from payment on order to 60 days from shipment date. The increase
in DSO in 2024 in comparison to 2023 reflects a greater weighting during 2024 of DPNCheck sales with terms of 30 to 60 days. Inventory
turnover rate declined during 2024 due to reduced sales volume.

 Cash
Flows

 Years Ended December 31,

 2024

 2023

 Change

 Net cash provided by (used in):

 –Operating activities

 $
 (7,128,353
)

 $
 (6,084,868
)

 $
 (1,043,485
)

 –Investing activities

 $
 5,437,890

 $
 1,156,353

 $
 4,191,537

 –Financing activities

 $
 1,476,301

 $
 2,325,441

 $
 (849,140
)

 Net decrease in cash and cash equivalents

 $
 (304,162
)

 $
 (2,603,074
)

 Operating

 Operations
cash usage in 2024 increased by $1.0 million from 2023. This reflected an increased net loss of $1.3 million in 2024 partially offset
by net reductions in non-cash elements of the net loss plus changes in operating assets and liabilities from 2023.

 Investing

 Proceeds
from maturities of marketable securities, net of reinvestments were $5.3 million in 2024. Investing activities in 2023 include cash deployment
of cash reserves into marketable securities valued at $1.2 million. Fixed asset purchases were $0 in 2024 and $184 thousand in 2023.

 Financing

2024 we raised net proceeds of $1.5 million from the sale of shares of common stock, registered under a shelf registration statement,
to investors utilizing our ATM facility and administered by an investment bank. This amount compared with $2.3 million raised under the
ATM in 2023. As a result of the Company's evaluation of strategic options, and in response to shareholder concerns with dilution,
we terminated the ATM facility in 2024.

 Critical
Accounting Policies and Estimates

 Our
financial statements are based on the selection and application of generally accepted accounting principles, which require us to make
estimates and assumptions about future events that affect the amounts reported in our financial statements and the accompanying notes.
Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise
of judgment. Actual results could differ significantly from those estimates, and any such differences may be material to our financial
statements. We believe that the policies set forth below may involve a higher degree of judgment and complexity in their application
than our other accounting policies and represent the critical accounting policies used in the preparation of our financial statements.
If different assumptions or conditions were to prevail, the results could be materially different from our reported results. Our significant
accounting policies are presented within Note 2 to our Financial Statements.

 Inventories,
consisting primarily of finished goods and purchased components, are stated at the lower of cost or net realizable value. Cost is determined
using the first-in, first-out inventory valuation method. We perform an analysis of inventory valuation on at least a quarterly basis
to determine whether the inventory carrying value exceeds its net realizable value. Net realizable value is based on current selling
price and estimated future sales volume. Should market conditions deteriorate, our inventory realization could be lower than estimated
net realizable value.

 Recently
Issued or Adopted Accounting Pronouncements

 From
time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board and are adopted by us as of the specified
effective date. Unless otherwise discussed, we believe that the impact of recently adopted and recently issued accounting pronouncements
will not have a material impact on our balance sheets, results of operations and cash flows.

 ITEM
8. Financial Statements and Supplementary Data

 The
information required by this item may be found on pages F-1 through F-21 of this Annual Report on Form 10-K.

 ITEM
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 ITEM
9A. Controls and Procedures

 (a)
Evaluation of disclosure controls and procedures.

 Our
principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K, have
concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the SEC's rules and forms, and is accumulated and communicated to our management, including our principal
executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.

 (b)
Management's Report on Internal Control Over Financial Reporting.

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief
Financial Officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting as of December 31,
2024 based on the criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). Based on our evaluation under the framework in Internal Control – Integrated Framework
(2013) issued by the COSO, our management concluded that our internal control over financial reporting was effective as of December 31,
2024.

 This
Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal
control over financial reporting. Management's report is not subject to attestation by our independent registered public accounting
firm pursuant to rules of the SEC that permit us to provide only management's report in this Annual Report on Form 10-K.

 (c)
Changes in internal control over financial reporting.

 There
have been no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

 ITEM
9B. Other Information

 On
March 28, 2025, we entered into Amendment No. 18 to our Shareholder Rights Agreement (Amendment No. 18) with Equiniti Trust Company,
LLC dated as of March 7, 2007, as amended. Amendment No. 18 extends the term of the Shareholder Rights Agreement by an additional year.
The foregoing description of Amendment No. 18 is subject to, and is qualified in its entirety by reference to, the full text of Amendment
No. 18, a copy of which is set forth as Exhibit 4.3.19 to this Annual Report on Form 10-K and is incorporated herein by reference.

 Rule
10b5-1 Trading Plans

the three months ended December 31, 2024, no directors or executive officers entered into, modified or terminated, contracts, instructions
or written plans for the sale or purchase of the Company's securities that were intended to satisfy the affirmative defense conditions
of Rule 10b5-1.

 ITEM
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Not
applicable.

 PART
III

 ITEM
10. Directors, Executive Officers and Corporate Governance

 Information
Regarding the Directors and Executive Officers

 Name

 Age

 Position

 Shai
 N. Gozani, M.D., Ph. D.

 Chairman
 of the Board, Chief Executive Officer, President and Secretary

 Thomas
 T. Higgins

 Senior
 Vice President, Chief Financial Officer and Treasurer

 David
 E. Goodman, M.D.

 Joshua
 S. Horowitz

 Nancy
 E. Katz

 David
 Van Avermaete

 Shai
N. Gozani, M.D., Ph. D. founded our company in 1996 and currently serves as Chairman of our Board of Directors and as our President,
Chief Executive Officer and Secretary. Since founding our company in 1996, Dr. Gozani has served in a number of positions at our company
including Chairman since 1996, President from 1996 to 1998 and from 2002 to the present, Chief Executive Officer since 1997 and Secretary
since July 2008. Dr. Gozani holds a B.A. in computer science, an M.S. in Biomedical Engineering and a Ph. D. in Neurobiology, from the
University of California, Berkeley. He also received an M.D. from Harvard Medical School and the Harvard-M.I.T. Division of Health Sciences
at M.I.T. Prior to forming our company, Dr. Gozani completed a neurophysiology research fellowship in the laboratory of Dr. Gerald Fischbach
at Harvard Medical School. Dr. Gozani has published articles in the areas of basic and clinical neurophysiology, biomedical engineering
and computational chemistry. Since 2019 Dr. Gozani has served on the Board of Directors of Madorra, Inc. The Board has concluded that
Dr. Gozani should serve as a director because Dr. Gozani's extensive knowledge of engineering and neurophysiology, combined with
the unique understanding of our technology and business he has gained as our founder and as a key executive, provides invaluable insight
to our Board and to the entire organization.

 David
E. Goodman, M.D., M.S.E. has served as a member of our Board of Directors since June 2004. Since 2013, Dr. Goodman has been running
his own independent primary care medical practice where he also manages the care of first responders (police, fire, EMS) injured in the
line of duty. From 2013 to 2016, Dr. Goodman served as CEO of Feet First, a technology-focused healthcare services company he co-founded
that is committed to preventing the devastating and expensive microvascular complications of diabetes. From 2014 to 2016, Dr. Goodman
served as a director of Xtant Medical (OTC QX: BONE), a comprehensive supplier of orthopedic and spine surgery products. From 2012 to
2015, Dr. Goodman served as CMO of FirstVitals, a healthcare services company focused on wellness and prevention. Since 2011, Dr. Goodman
has also served as an independent consultant. During 2010, Dr. Goodman served as President and Chief Executive Officer of SEDline, Inc.,
a research-focused company with the mission to expand the scope and applications for neuromonitoring. From 2008 to 2009, Dr. Goodman
served as Executive Vice President of Business Development for Masimo Corporation, a manufacturer of non-invasive patient monitors. From
2006 to 2008, Dr. Goodman served as an independent consultant providing product design, regulatory and analytical consulting services
to medical device and biopharmaceutical companies and also served in this capacity from 2003 to 2004 and from 2001 to 2002. From 2005
to 2006, Dr. Goodman served as President and Chief Executive Officer of BaroSense, Inc., a medical device company focused on developing
minimally invasive devices for the long-term treatment of obesity. From 2004 to 2005, Dr. Goodman served as President and Chief Executive
Officer of Interventional Therapeutic Solutions, Inc., an implantable drug delivery systems company. From 2002 to 2003, Dr. Goodman served
as Chairman, President and Chief Executive Officer of Pherin Pharmaceuticals, a pharmaceutical discovery and development company. From
1994 to 2001, Dr. Goodman held various positions, including Chief Executive Officer, Chief Medical Officer and director, for LifeMasters
Supported SelfCare, Inc., a disease management services company that Dr. Goodman founded. Dr. Goodman also served as a director of Sound
Surgical Technologies LLC, a private manufacturer of aesthetic surgical tools from 2011 until its acquisition by Solta Medical (Nasdaq: SLTM)
in 2013. Dr. Goodman holds a B.A.S. in applied science and bioengineering and a M.S.E. in bioengineering from the University of Pennsylvania.
He also received an M.D. from Harvard Medical School and the Harvard-M.I.T. Division of Health Sciences and Technology. Dr. Goodman holds
22 issued and pending patents and is a practicing physician with licenses in California and Hawaii. The Board has concluded that Dr.
Goodman should serve as a director because Dr. Goodman's medical and engineering background and his many years of executive experience
in the medical device industry provide important experience and expertise to the Board.

 Joshua
S. Horowitz has served as a member of our Board of Directors since April 2024. Mr. Horowitz is a professional investor with over
23 years of investing experience. Since January 2012, he has served as a portfolio manager and Managing Director at various Palm entities,
first with Palm Ventures LLC and currently with Palm Management (US) LLC, where he manages the Palm Global Small Cap Master Fund. He
was formerly Director of Research at Berggruen Holdings, a multi-billion dollar family office, and was a research analyst at Crossway
Partners LP, a value strategy investment partnership. In addition to his experience in the financial industry, Mr. Horowitz brings extensive
public company board experience. Earlier in his career, he served as a director of The Lincoln General Insurance Company, a private company)
from October 2011 to November 2015, 1347 Capital Corp (Nasdaq: TFSC) from July 2014 to July 2016, and 1347 Property Insurance Holdings,
Inc. (Nasdaq: PIH) from April 2015 to April 2018. He served as both Director, and ultimately, Interim Chairman of the Board of Directors
of Birner Dental Management Services, Inc. (OTC: BDMS) from December 2017 until the Company's sale to Mid Atlantic Dental Partners
in January 2019. At the time of his service, Birner was the only publicly traded dental service organization in the country with 67 offices
and over 500 employees. Since December 2023, Mr. Horowitz has served as Chairman of the Board of BK Technologies, Inc. (NYSE: BKTI),
a leading critical communications company serving public safety professionals and government agencies. In June of 2024, he was named
Chairman of the Board of Limbach Holdings (NASDAQ: LMB), a leading mechanical engineering concern where he has served on the Board since
April of 2020. He has served as a Director of Barnwell, Inc. (NYSE: BRN), a holding company with diverse investments in oil and gas assets,
since February 2023. The Board has concluded that Mr. Horowitz's should serve as a director because of his executive management
experience with Palm Management (US) LLC, his background in investment management, corporate strategy, governance, consensus building,
investor communications, and his extensive experience serving on the boards of both private and publicly traded companies.

 Nancy
E. Katz has served as a member of our Board of Directors since December 2010. From May 2011 to August 2014, Ms. Katz served as Vice
President, Consumer Marketing at Medtronic, Inc., a medical technology company. From July 2005 to July 2010, Ms. Katz was Senior Vice
President, Bayer Diabetes Care — North America. Prior to this position, she was President and Chief Executive Officer of Calypte
Biomedical Corporation, a manufacturer of HIV diagnostics, President of Zila Pharmaceutical, Inc., a manufacturer of oral care products,
and held senior marketing positions with the Lifescan division of Johnson & Johnson (blood glucose diabetes products), Schering-Plough
Healthcare Products, and with American Home Products. Since October 2016, Ms. Katz has served on the Board of Directors of Cyanotech
Corporation (Nasdaq: CYAN). She has previously served on the Boards of Directors of Neoprobe Corporation (AMEX: NEOP), Calypte Biomedical
Corporation, LXN Corporation and Pepgen Corporation. She received a B.S. in business from the University of South Florida. The Board
has concluded that Ms. Katz should serve as a director because of her executive level experience in the healthcare industry, as well
as consumer marketing expertise which provides the Board with valuable insight in business strategy and execution.

 David
Van Avermaete has served as a member of our Board of Directors since September 2013. Since January 2015, Mr. Van Avermaete has served
as President of Inject Safe Technologies, a privately held company that has developed a bandage specifically designed to support injections.
From April 2004 to February 2013, Mr. Van Avermaete served as Chief Executive Officer of VeraLight, Inc., a medical device company he
founded, that focuses on non-invasive screening for type 2 diabetes. From 2000 to 2004, Mr. Van Avermaete served as Senior Vice President
Non-Invasive Technology of InLight Solutions, a Johnson & Johnson company focused on transformational technology in the diabetes
field. From 1998 to 2000, Mr. Van Avermaete served as U.S. President of the LifeScan division of Johnson & Johnson and, from 1990
to 1998, in various senior level positions at LifeScan concentrating in sales and marketing. Previously, Mr. Van Avermaete served as
Vice President Sales and Marketing at Biotope, Director of Marketing at Roche Diagnostics, and Director of Marketing and Sales at Syntex
Medical Diagnostics. Mr. Van Avermaete received an M.B.A. and an M.S. in Microbiology from the University of Arizona and a Bachelor of
Science Degree in medical technology and chemistry from Ball State University. The Board has concluded that Mr. Van Avermaete should
serve as a director because his executive level experience in the medical device and diabetes field, as well as in entrepreneurial ventures,
provides the Board with a valuable perspective in commercializing medical device products.

 Thomas
T. Higgins has served as our Senior Vice President, Chief Financial Officer and Treasurer since September 2009. Prior to joining
NeuroMetrix, from January 2005 to March 2008, Mr. Higgins was Executive Vice President and Chief Financial Officer at Caliper Life Sciences,
Inc., a provider of technology and services for life sciences research. Before Caliper, Mr. Higgins was Executive Vice President, Operations
and Chief Financial Officer at V.I. Technologies, Inc. (Vitex), a biotechnology company addressing blood safety. Before Vitex, Mr. Higgins
served at Cabot Corporation in various senior finance and operations roles. His last position at Cabot was President of Distrigas of
Massachusetts Corporation, a subsidiary involved in the liquefied natural gas business, and prior to that he was Vice President and General
Manager of Cabot's Asia Pacific carbon black operations. Before joining Cabot, Mr. Higgins was with PricewaterhouseCoopers where
he started his career. Mr. Higgins holds a B.B.A. with honors from Boston University.

 Other
information required by this item will be incorporated by reference from the discussion responsive thereto under the captions "Board
Matters and Corporate Governance," "Information Regarding the Directors and Executive Officers," "Code of Business
Conduct and Ethics" and "Delinquent Section 16(a) Reports" in either an amendment to this Annual Report on Form 10-K
or a proxy statement to be filed within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates.

 ITEM
11. Executive Compensation

 The
response to this item is incorporated by reference from the discussion responsive thereto under the captions "Directors'
Compensation" and "Compensation of Executive Officers" in either an amendment to this Annual Report on Form 10-K or
a proxy statement to be filed within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates.

 ITEM
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The
response to this item is incorporated by reference from the discussion responsive thereto under the captions "Security Ownership
of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" in either an amendment to this
Annual Report on Form 10-K or a proxy statement to be filed within 120 days of the end of the fiscal year to which this Annual Report
on Form 10-K relates.

 ITEM
13. Certain Relationships and Related Transactions, and Director Independence

 The
response to this item is incorporated by reference from the discussion responsive thereto under the captions "Certain Relationships
and Related Person Transactions" and "Board Matters and Corporate Governance" in either an amendment to this Annual
Report on Form 10-K or a proxy statement to be filed within 120 days of the end of the fiscal year to which this Annual Report on Form
10-K relates.

 ITEM
14. Principal Accounting Fees and Services

 The
response to this item is incorporated by reference from the discussion responsive thereto under the caption "Accounting Fees"
in either an amendment to this Annual Report on Form 10-K or a proxy statement to be filed within 120 days of the end of the fiscal year
to which this Annual Report on Form 10-K relates.

 PART
IV

 ITEM
15. Exhibits and Financial Statement Schedule

 (a)
1. Financial Statements

 The
financial statements are listed in the accompanying index to financial statements on page F-1.

 2.
Financial Statement Schedule

 The
financial statement schedule is listed in the accompanying index to financial statements on page F-1. Other financial statement schedules
required under this Item and Item 8 are omitted because they are not applicable or the required information is shown in the financial
statements or the footnotes thereto.

 3.
Exhibit Index

 The
following is a list of exhibits filed as part of this Annual Report on Form 10-K:

 Exhibit

 Exhibit
 Description

 Filed
 with this Report

 Incorporated
 by

 Reference herein

 from Form or

 Filing
 Date

 SEC
 File/

 Registration

 2.1

 Agreement and Plan of Merger, dated as of December 17, 2024, by and among electroCore, Inc., Nexus Merger Sub Inc., and NeuroMetrix, Inc.

 2.1)

 12/17/2024

 3.1.1

 Third
 Amended and Restated Certificate of Incorporation of NeuroMetrix, Inc. dated July 27, 2004

 S-8

 8/9/2004

 333-118059

 3.1.2

 of Designations for Series A Junior Cumulative Preferred Stock, par value $0.001 per share, dated March 7, 2007

 8-A12(b)

 3/8/2007

 3.1.3

 of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated September 1, 2011

 9/1/2011

 3.1.4

 of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated February 15, 2013

 2/15/2013

 3.1.5

 of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated December 1, 2015

 12/1/2015

 3.1.6

 of Amendment of Restated Certificate of Incorporation of NeuroMetrix, Inc. dated May 11, 2017

 5/12/2017

 3.1.7

 of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated November 18, 2019

 11/18/2019

 3.1.8

 of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated November 20, 2023

 11/20/2023

 3.1.9

 of Designation of Preferences, Rights and Limitations of Series A-1 Convertible Preferred Stock, par value $0.001 per share, dated
 June 5, 2013

 6/6/2013

 3.1.10

 of Designation of Preferences, Rights and Limitations of Series A-2 Convertible Preferred Stock, par value $0.001 per share, dated
 June 5, 2013

 (Exhibit 3.2)

 6/6/2013

 3.1.11

 of Designation of Preferences, Rights and Limitations of Series A-3 Convertible Preferred Stock, par value $0.001 per share, dated
 June 24, 2014

 6/25/2014

 3.1.12

 of Designation of Preferences, Rights and Limitations of Series A-4 Convertible Preferred Stock, par value $0.001 per share, dated
 June 24, 2014

 (Exhibit 3.2)

 6/25/2014

 3.1.13

 of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, par value $0.001 per share, dated
 May 26, 2015

 5/29/2015

 3.1.14

 of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, par value $0.001 per share, dated
 December 30, 2015

 12/30/2015

 3.1.15

 of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, par value $0.001 per share, dated
 June 3, 2016

 6/3/2016

 3.1.16

 of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock, par value $0.001 per share, dated
 December 28, 2016

 12/29/2016

 3.1.17

 of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock, par value $0.001 per share, dated
 July 10, 2017

 7/11/2017

 3.2.1

 Amended
 and Restated Bylaws of NeuroMetrix, Inc.

 12/10/2021

 4.1

 Description
 of Securities of the Registrant

 1/28/2022

 4.2

 Specimen
 Certificate for Shares of Common Stock

 S-1/A

 7/19/2004

 333-115440

 4.3.1

 Shareholder
 Rights Agreement, dated as of March 7, 2007, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights
 Agent

 8-A12(b)

 3/8/2007

 4.3.2

 to Shareholder Rights Agreement, dated September 8, 2009, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company,

 9/14/2009

 4.3.3

 No. 2 to Shareholder Rights Agreement, dated June 5, 2013, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company,

 6/6/2013

 4.3.4

 No. 3 to Shareholder Rights Agreement, dated June 25, 2014, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company,

 6/25/2014

 4.3.5

 No. 4 to Shareholder Rights Agreement, dated May 28, 2015, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company,

 7/23/2015

 4.3.6

 No. 5 to Shareholder Rights Agreement, dated December 29, 2015, between NeuroMetrix, Inc. and American Stock Transfer & Trust

 (Exhibit 4.3)

 12/30/2015

 4.3.7

 No. 6 to Shareholder Rights Agreement, dated June 3, 2016,between NeuroMetrix, Inc. and American Stock Transfer & Trust

 6/3/2016

 4.3.8

 No. 7 to Shareholder Rights Agreement, dated December 28, 2016, between NeuroMetrix, Inc. and American Stock Transfer & Trust

 12/29/2016

 4.3.9

 No. 8 to Shareholder Rights Agreement, dated February 8, 2017, between NeuroMetrix, Inc. and American Stock Transfer & Trust

 (Exhibit 4.2.9)

 2/8/2017

 4.3.10

 No. 9 to Shareholder Rights Agreement, dated July 10, 2017, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company,

 7/11/2017

 4.3.11

 No. 10 to Shareholder Rights Agreement, dated February 5, 2018, between NeuroMetrix, Inc. and American Stock Transfer & Trust

 (Exhibit 4.2.11)

 2/8/2018

 4.3.12

 No. 11 to Shareholder Rights Agreement, dated January 21, 2019, between NeuroMetrix, Inc. and American Stock Transfer & Trust

 (Exhibit 4.2.11)

 1/24/2019

 4.3.13

 No. 12 to Shareholder Rights Agreement, dated January 27, 2020, between NeuroMetrix, Inc. and American Stock Transfer & Trust

 (Exhibit 4.3.13)

 1/28/2020

 4.3.14

 No. 13 to Shareholder Rights Agreement, dated January 25, 2021, between NeuroMetrix, Inc. and American Stock Transfer & Trust

 (Exhibit 4.3.14)

 1/29/2021

 4.3.15

 No. 14 to Shareholder Rights Agreement, dated July 20, 2021, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company,

 7/22/2021

 4.3.16

 No. 15 to Shareholder Rights Agreement, dated March 6, 2023, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company,

 3/10/2023

 4.3.17

 No. 16 to Shareholder Rights Agreement, dated February 20, 2024, between NeuroMetrix, Inc. and Equiniti Trust Company LLC, as Rights
 Agent

 8-K/A

 2/27/2024

 4.3.18

 No. 17 to Shareholder Rights Agreement, dated December 17, 2024, between NeuroMetrix, Inc. and Equiniti Trust Company LLC, as Rights
 Agent

 4.1)

 12/17/2024

 4.3.19

 Amendment No. 18 to Shareholder Rights Agreement, dated March 28, 2025, between NeuroMetrix, Inc. and Equiniti Trust Company LLC, as Rights Agent

 X

 Lease Agreements

 10.1.1

 Lease
 Agreement, dated August 27, 2014, between Cummings Properties, LLC and NeuroMetrix, Inc.

 (Exhibit 10.1)

 10/28/2014

 011-33351

 10.1.2

 Lease
 Extension #1, dated June 14, 2018, between Cummings Properties, LLC and NeuroMetrix, Inc.

 (Exhibit 10.2)

 7/19/2018

 011-33351

 Credit Facilities, Loan
 and Equity Agreements

 10.5.3

 Promissory
 Note with Comerica Bank dated April 27, 2020

 (Exhibit 10.1)

 4/30/2020

 10.5.4

 Loan
 Agreement by and between NeuroMetrix, Inc. and Comerica Bank, dated April 27, 2020

 (Exhibit 10.2)

 4/30/2020

 10.5.5

 At
 Market Issuance Sales Agreement by and between NeuroMetrix, Inc. and Ladenburg Thalmann & Co. Inc., dated October 22, 2021

 S-3

 (Exhibit 1.2)

 10/22/2021

 333-260438

 Equity Compensation Plans

 10.6+

 Twelfth
 Amended and Restated 2004 Stock Option and Incentive Plan

 14A

 (Appendix A)

 3/16/2021

 10.7+

 2009
 Non-Qualified Inducement Stock Plan

 S-8

 (Exhibit 99.1)

 6/3/2009

 333-159712

 10.8+

 Employee
 Stock Purchase Plan, as amended

 S-8

 (Exhibit 99.1)

 5/19/2022

 333-265080

 10.9.1+

 2022
 Equity Incentive Plan

 S-8

 (Exhibit 99.2)

 5/19/2022

 333-265080

 10.9.2+

 Form
 of Stock Option Agreement under 2022 Equity Incentive Plan

 S-8

 (Exhibit 99.3)

 5/19/2022

 333-265080

 10.9.3+

 Form
 of Restricted Stock Unit Agreement under 2022 Equity Incentive Plan

 S-8

 (Exhibit 99.4)

 5/19/2022

 333-265080

 Agreements with Executive Officers and Directors

 10.10+

 Inc. Form of Indemnification Agreement

 10.1)

 4/19/2024

 10.11.1+

 Indemnification
 Agreement dated June 21, 2004, by and between Shai N. Gozani, M.D., Ph. D., and NeuroMetrix, Inc.

 S-1/A

 (Exhibit 10.20)

 6/22/2004

 333-115440

 10.11.2+

 Employment
 Agreement dated December 30, 2020, by and between NeuroMetrix, Inc. and Shai N. Gozani, M.D., Ph. D., and NeuroMetrix, as amended

 (Exhibit 10.12.2)

 1/28/2022

 10.11.3+

 Addendum,
 dated April 4, 2024, to Employment Agreement by and between NeuroMetrix, Inc. and Shai N. Gozani, M.D., Ph. D.

 10.1)

 4/5/2024

 10.11.4+

 Addendum,
 dated April 25, 2024, to Employment Agreement by and between NeuroMetrix, Inc. and Shai N. Gozani, M.D., Ph. D.

 10.2)

 5/15/2024

 10.12.1+

 Indemnification
 Agreement, dated September 10, 2009, by and between NeuroMetrix, Inc. and Thomas T. Higgins

 (Exhibit 10.2)

 9/15/2009

 10.12.2+

 Employment
 Agreement, dated December 30, 2020 by and between NeuroMetrix, Inc. and Thomas T. Higgins, as amended

 (Exhibit 10.13.2)

 1/28/2022

 10.12.3+

 Addendum,
 dated April 5, 2024, to Employment Agreement by and between NeuroMetrix, Inc. and Thomas T. Higgins

 10.2)

 4/5/2024

 10.12.4+

 Addendum,
 dated April 25, 2024, to Employment Agreement by and between NeuroMetrix, Inc. and Thomas T. Higgins

 10.3)

 5/15/2024

 10.13+

 Amended
 and Restated Management Retention and Incentive Plan, as modified, dated February 3, 2017

 (Exhibit 10.17)

 2/9/2017

 10.14+

 Amended
 and Restated Management Retention and Incentive Plan, as modified, dated January 20, 2020

 (Exhibit 10.16.2)

 1/28/2020

 10.15+

 Amended
 and Restated Management Retention and Incentive Plan, as modified, dated

 10.2)

 12/17/2024

 Agreements with Respect to Collaborations,
 Licenses, Research and Development

 10.15

 Manufacturing
 and Supply Agreement, dated as of August 2, 2006, by and between Parlex Polymer Flexible Circuits, Inc. and NeuroMetrix, Inc.

 (Exhibit 99.1)

 8/2/2006

 000-50856

 10.16

 Asset Purchase Agreement, dated as of January 16, 2025, by and between NeuroMetrix, Inc. and Fukuda Denshi Co., Ltd.

 X

 Other

 19.1

 NeuroMetrix, Inc. Insider Trading Policy

 X

 23.1

 Consent of Baker Tilly US, LLP, an independent registered public accounting firm.

 X

 31.1

 Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

 X

 31.2

 Certification of Principal Accounting and Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

 X

 Certification of the Principal Executive Officer and the Principal Accounting and Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

 X

 Compensation
 Recovery Policy

 97)

 3/1/2024

 101.1

 The
 following materials from NeuroMetrix, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in
 for the years ended December 31, 2024 and 2023, (iii) Statements of Changes in Stockholders' Equity for the years ended December
 31, 2024 and 2023, (iv) Statements of Cash Flows for the years ended December 31, 2024 and 2023, and (v) Notes to Financial Statements.

 X

 101.INS

 Instance Document

 X

 101.SCH

 Taxonomy Extension Schema

 X

 101.CAL

 Taxonomy Extension Calculation Linkbase

 X

 101.DEF

 Taxonomy Extension Definition Linkbase

 X

 101.LAB

 Taxonomy Extension Label Linkbase

 X

 101.PRE

 Taxonomy Extension Presentation Linkbase

 X

 +

 Indicates
 management contract or any compensatory plan, contract or arrangement.

 Confidential
 treatment has been granted with respect to certain portions of this Exhibit, which portions have been omitted and filed separately
 with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to the Securities Exchange
 Act of 1934, as amended.

 ITEM
16. Form 10-K Summary

 We
may voluntarily include a summary of information required by Form 10-K under this Item 16. We have elected not to include such summary
information.

 SIGNATURES

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 NEUROMETRIX,
INC.

 By:

 /s/
 SHAI N. GOZANI, M.D., PH.D.

 Shai
 N. Gozani, M.D., Ph. D.

 Chairman,
 President and Chief Executive Officer

 Date:
March 31, 2025

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant on March 31, 2025 in the capacities indicated below.

 Name

 Title

 /s/
 SHAI N. GOZANI, M.D., PH.D.

 Chairman,
 President and Chief Executive Officer

 (Principal Executive Officer)

 Shai
 N. Gozani, M.D., Ph. D.

 /s/
 THOMAS T. HIGGINS

 Senior
 Vice President, Chief Financial Officer and Treasurer

 (Principal Financial Officer and Principal Accounting Officer)

 Thomas
 T. Higgins

 /s/
 DAVID E. GOODMAN, M.D.

 David
 E. Goodman, M.D.

 /s/
 JOSHUA S. HOROWITZ

 Joshua
 S. Horowitz

 /s/
 NANCY E. KATZ

 Nancy
 E. Katz

 /s/
 DAVID VAN AVERMAETE

 David
 Van Avermaete

TO FINANCIAL STATEMENTS

Inc.

 Years
ended December 31, 2024 and 2023

 Page

 Report
 of Independent Registered Public Accounting Firm (PCAOB ID 23)

 Financial

 Sheets

 of Operations

 of Comprehensive Loss

 of Changes in Stockholders' Equity

 of Cash Flows

 Notes

 II — Valuation and Qualifying Accounts

 S-1

 F- 1

 Report
of Independent Registered Public Accounting Firm

 To
the Board of Directors and Stockholders of NeuroMetrix, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying balance sheets of NeuroMetrix, Inc. (the Company) as of December 31, 2024 and 2023, and the related
statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes and schedule (collectively referred to as the financial statements).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two year period ended
December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Critical
Audit Matters

 Critical
audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be
communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and
(2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 We
have served as the Company's auditor since 2017.

 /s/
 Baker Tilly US, LLP

 Tewksbury,
Massachusetts

 March
31, 2025

 F- 2

Inc.

Sheets

 2024

 2023

 31,

 2024

 2023

 Assets

 Current assets:

 Cash and cash equivalents

 $
 1,427,784

 $
 1,731,946

 Available-for-sale securities

 16,265,205

 Accounts receivable, net of allowances of $ 25,000
 at December 31, 2024 and 2023

 192,916

 518,824

 1,347,507

 1,559,428

 Prepaid expenses and other
 current assets

 378,054

 779,039

 Total current assets

 15,013,511

 20,854,442

 Fixed assets, net

 199,419

 293,449

 Right of use asset

 111,197

 250,150

 Other long-term assets

 —

 26,400

 Total assets

 $
 15,324,127

 $
 21,424,441

 Liabilities and Stockholders'
 Equity

 Current liabilities:

 Accounts payable

 $
 363,304

 $
 215,509

 Accrued expenses and compensation

 541,820

 876,739

 Lease obligation, current
 portion

 107,352

 148,391

 Total current liabilities

 1,012,476

 1,240,639

 Lease obligation, net
 of current portion

 —

 92,485

 Total liabilities

 1,012,476

 1,333,124

 Commitments and contingencies (Note 10)

 -

 -

 Stockholders' equity:

 Preferred stock

 —

 —

 Convertible preferred stock

 Preferred stock

 Common stock, $ 0.0001 par value; 25,000,000
 authorized at December 31, 2024 and 2023; 2,051,028 and 1,524,939 shares issued and outstanding at December 31, 2024 and 2023, respectively

 Additional paid-in capital

 232,165,904

 229,960,346

 Accumulated other comprehensive income

 Accumulated deficit

 ( 217,915,408
)

 ( 210,109,353
)

 Total stockholders'
 equity

 14,311,651

 20,091,317

 Total liabilities
 and stockholders' equity

 $
 15,324,127

 $
 21,424,441

 The

 F- 3

Inc.

of Operations

 2024

 2023

 Years

 2024

 2023

 Revenues, net

 $
 3,032,837

 $
 5,901,425

 Cost of revenues

 1,353,170

 1,954,012

 Gross profit

 1,679,667

 3,947,413

 Operating expenses:

 Research and development

 1,792,610

 2,777,960

 Sales and marketing

 2,337,644

 3,365,265

 General
 and administrative

 6,331,450

 4,955,709

 Total
 operating expenses

 10,461,704

 11,098,934

 Loss from operations

 ( 8,782,037
)

 ( 7,151,521
)

 Other income:

 Interest income

 46,825

 257,105

 Other
 income

 929,157

 364,929

 Total
 other income

 975,982

 622,034

 Net loss:

 $
)

 $
)

 Net loss per share of
 common stock applicable to common stockholders, basic and diluted

 $
 ( 3.96
)

 $
 ( 6.27
)

 Weighted average number
 of common shares outstanding, basic and diluted

 1,969,858

 1,041,991

 The

 F- 4

of Comprehensive Loss

 2024

 2023

 Years

 2024

 2023

 $
)

 $
)

 Other comprehensive income:

 Unrealized gain on available-for-sale securities

 749,935

 605,100

 Reclassification of realized
 gain on available-for-sale securities to other income

 ( 929,157
)

 ( 364,929
)

 Comprehensive loss

 $
 ( 7,985,277
)

 $
 ( 6,289,316
)

 The

 F- 5

Inc.

of Changes in Stockholders' Equity

 Series
 B Convertible

 Preferred
 Stock

 Common
 Stock

 Additional

 Accumulated
 Other

 of Shares

 Amount

 of Shares

 Amount

 Paid-In
 Capital

 Comprehensive Income

 Accumulated
 Deficit

 Total

 Balance at December 31, 2022

 959,460

 226,935,456

 —

 ( 203,579,866
)

 23,355,687

 Stock-based compensation expense

 —

 —

 —

 —

 699,505

 —

 —

 699,505

 Issuance of common stock under at the market
 offering

 —

 —

 537,094

 2,305,699

 —

 —

 2,305,753

 Issuance of common stock under employee stock
 purchase plan

 —

 —

 4,902

 —

 19,688

 —

 —

 19,688

 Vesting of restricted stock under equity plan

 —

 —

 17,261

 ( 2
)

 —

 —

 —

 Other comprehensive income

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

)

)

 Balance at December 31, 2023

 $

 1,518,717

 $

 $
 229,960,346

 $

 $
 ( 210,109,353
)

 $
 20,091,317

 $

 1,518,717

 $

 $
 229,960,346

 $

 $
 ( 210,109,353
)

 $
 20,091,317

 Stock-based compensation expense

 —

 —

 —

 —

 729,310

 —

 —

 729,310

 Issuance of common stock under at the market
 offering

 —

 —

 458,380

 1,471,053

 —

 —

 1,471,099

 Issuance of common stock under employee stock
 purchase plan

 —

 —

 1,679

 —

 5,202

 —

 —

 5,202

 Vesting of restricted stock under equity plan

 —

 —

 71,390

 ( 7
)

 —

 —

 —

 Other comprehensive income (loss)

 —

 —

 —

 —

 —

 ( 179,222
)

 —

 ( 179,222
)

 —

 —

 —

 —

 —

 —

)

)

 Balance at December 31, 2024

 $

 2,050,166

 $

 $
 232,165,904

 $

 $
 ( 217,915,408
)

 $
 14,311,651

 $

 2,050,166

 $

 $
 232,165,904

 $

 $
 ( 217,915,408
)

 $
 14,311,651

 The

 F- 6

Inc.

of Cash Flows

 2024

 2023

 Years

 2024

 2023

 Cash flows for operating
 activities:

 $
)

 $
)

 Adjustments to reconcile net loss to net cash
 used in operating activities:

 Depreciation and amortization

 94,030

 55,712

 Amortization of right-of-use assets, operating
 lease

 138,953

 120,459

 Stock-based compensation

 729,310

 699,505

 Inventory provision charged to cost of revenue

 74,209

 63,420

 Amortization of premiums and discounts on held-to-maturity
 securities

 —

 ( 135,293
)

 Realized gain on available-for-sale securities

 ( 929,157
)

 ( 364,929
)

 Changes in operating assets and liabilities:

 Accounts receivable

 325,908

 127,947

 137,712

 ( 7,861
)

 Prepaid expenses and other current and long-term
 assets

 427,385

 ( 133,537
)

 Accounts payable

 147,795

 ( 152,573
)

 Operating lease liability

 ( 133,524
)

 ( 115,031
)

 Accrued expenses and compensation

 ( 334,919
)

 286,800

 Net cash used in operating

 ( 7,128,353
)

 ( 6,084,868
)

 Cash flows for investing
 activities:

 Purchases of available-for-sale securities

 ( 40,652,110
)

 ( 29,755,105
)

 Proceeds from maturities of available-for-sale
 securities

 46,000,000

 14,095,000

 Proceeds from maturities of held-to-maturity
 securities

 —

 17,000,000

 Purchases of fixed assets

 —

 ( 183,542
)

 Net cash provided by investing

 5,347,890

 1,156,353

 Cash flows from financing
 activities:

 Net proceeds from issuance
 of common stock

 1,476,301

 2,325,441

 Net cash provided by financing

 1,476,301

 2,325,441

 Net decrease in cash and cash equivalents

 ( 304,162
)

 ( 2,603,074
)

 Cash and cash equivalents,
 beginning of year

 1,731,946

 4,335,020

 Cash and cash equivalents,
 end of year

 $
 1,427,784

 $
 1,731,946

 The

 F- 7

Inc.

 Notes

 1.
 Description of Business and Basis of Presentation

Inc. (the "Company" or "NeuroMetrix") develops and commercializes health care products that utilize non-invasive
neurostimulation. Revenues are derived from the sale of medical devices and after-market consumable products and accessories. The Company's
products are sold in the United States and select overseas markets. They are cleared by the U.S. Food and Drug Administration ("FDA")
and regulators in foreign jurisdictions where appropriate. The Company has two primary products. DPNCheck is a point-of-care test
for diabetic peripheral neuropathy, which is the most common long-term complication of Type 2 diabetes. Quell is an app-enabled, wearable
device for lower extremity chronic pain and for the symptoms of fibromyalgia.

 The
Company held cash, cash equivalents and investment grade securities totaling $ 13.1 million on December 31, 2024. The Company believes
that its present balance of cash resources and securities coupled with cash inflows from product sales will enable the Company to fund
its operations for at least the next twelve months from the date of issuance of the financial statements. Actual cash requirements could
differ from management's projections for many reasons, including changes the Company may make to its business strategy, commercial
challenges, regulatory developments, changes to research and development programs, supply chain issues, staffing challenges and other
items affecting the Company's projected uses of cash. The Company's Financial Statement reflect its status as an independent,
NASDAQ listed, Delaware registered company.

 In
early 2024, the Company initiated a review of its strategic options with the objective of enhancing shareholder value. The review focused
on the Company's commercial activities and structure as well as business combination opportunities. The undertaking contributed
to several outcomes, including a substantial reduction in employee headcount to reduce operating expenses, termination of the legacy
ADVANCE business, strengthening its Board of Directors, and termination of its ATM common stock facility.

 On
December 17, 2024, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with electroCore, Inc.
("electroCore") and Nexus Merger Sub Inc, a wholly owned subsidiary of electroCore ("Merger Sub"), providing
for the merger (the "Merger") of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly
owned subsidiary of electroCore.

 The
Merger is expected to close early in the second quarter of 2025 On March 21, 2025, the Company held a special meeting of
stockholders, where it obtained approval of the Merger Agreement and the transactions contemplated thereunder by the holders of a
majority of the outstanding shares of common stock. The completion of the Merger remains subject to the satisfaction of other
closing conditions. If the Merger is consummated, the Company's common stock will be delisted from Nasdaq and deregistered
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and NeuroMetrix will cease to be a publicly
traded company (See Note 17 — Proposed Merger).

 2.
 Summary of Significant Accounting Policies

 Use
of Estimates and Assumptions

 The
preparation of financial statements in conformity with United States generally accepted accounting principles requires management to
make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual
results could differ from those estimates.

 The
Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances
and regularly assesses these estimates, but actual results could differ materially from these estimates. Effects of changes in estimates
are recorded in the period in which they occur.

 Cash
and Cash Equivalents

 Cash
and cash equivalents include bank demand deposits and money market funds that invest primarily in U.S. government securities.

 F- 8

Inc.

 Notes

 Securities

 The
Company invests in highly liquid, marketable debt securities with high credit ratings and typically with maturities of two years or less.
Individual securities are designated by the Company as either "held-to-maturity" ("HTM") or "available-for-sale"
("AFS") at the point of investment. Securities classified as short-term have maturities of less than one year. As of December
31, 2024, all marketable securities held by the Company are classified as available for sale and had remaining contractual maturities
of one year or less.

 HTM
securities are valued on an amortized cost basis and reviewed to determine if an allowance for credit losses should be recorded in the
statements of operations. AFS securities are valued at fair value. Unrealized gains and losses on AFS securities are included as a component
of accumulated other comprehensive income in the balance sheets and statements of stockholders' equity and a component of total
comprehensive loss in the statements of comprehensive loss. An AFS security may be considered impaired if its fair value is less than
amortized cost. Unrealized losses are evaluated to determine if the impairment is credit-related or non credit-related. Credit-related
impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, and a non credit-related impairment
is recognized in other comprehensive loss. For certain types of securities, such as U.S. Treasuries, the Company generally expects zero
credit losses. No allowance for credit losses was recorded on its securities portfolio for the years ended December 31, 2024 and 2023.

 Concentrations
of Credit Risk

 Financial
instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash equivalents, trade receivables,
and securities. The Company invests its cash equivalents and securities in highly rated institutions.

 At
December 31, 2024 and 2023, two customers accounted for 66 % and three customers accounted for 74 % of accounts receivable, respectively.
One customer accounted for 14 % of revenues for the year ended December 31, 2024 and two customers accounted for 34 % of revenues
for the year ended December 31, 2023.

 Inventories,
consisting primarily of finished goods and purchased components, are stated at the lower of cost or net realizable value. Cost is determined
using the first-in, first-out method. The net realizable value of inventories is based upon the types and levels of inventories held,
forecasted demand, pricing, competition, and changes in technology. Deterioration in market and economic conditions could adversely affect
the recovery of inventory value.

 Leases

 The
Company presents the lease obligations on the balance sheet, by recording a right-of-use asset and a lease liability for all leases other
than those that, at lease commencement, have a lease term of 12 months or less. On the lease commencement date, the Company measures
and records a lease liability equal to the present value of the remaining lease payments, discounted using the rate implicit in the lease
or if that cannot be readily determined, the Company's incremental borrowing rate.

 Fair
Value

 The
Company follows the provisions of Financial Accounting Standards Board (the "FASB") Accounting Standards Codification ("ASC")
Topic 820-10, Fair Value Measurements and Disclosures ("ASC 820-10"), which defines fair value, establishes a framework for
measuring fair value in GAAP and requires certain disclosures about fair value measurements. Fair value is defined as an exit price,
representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants
would use in pricing an asset or liability.

 F- 9

Inc.

 Notes

 As
a basis for considering such assumptions, ASC 820-10 established a three-tier fair value hierarchy which prioritizes the inputs used
in measuring fair value as follows: Level 1 observable inputs such as quoted prices in active markets; Level 2 inputs, other than quoted
prices in active markets, that are observable either directly or indirectly; and Level 3 unobservable inputs for which there are little
or no market data, which require the Company to develop its own assumptions. The hierarchy requires the Company to use observable market
data, when available, and to minimize the use of unobservable inputs when determining fair value.

 Note
5 presents the Company's financial assets or liabilities measured at fair value as of December 31, 2024 and 2023. The carrying
amounts of the Company's cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value
at December 31, 2024 and 2023 due to their short-term nature.

 Revenue
Recognition

 Revenues
include product sales, net of estimated returns. Revenue is measured as the amount of consideration the Company expects to receive in
exchange for product transferred. Revenue is recognized at the point in time when contractual performance obligations have been satisfied
and control of the product has been transferred to the customer. The Company has a single product delivery performance obligation. Accrued
product returns using the most likely amount method are estimated based on historical data and evaluation of current information and
variable consideration is not constrained. Revenue from product sales that occur via an online pharmacy agent are recognized on a gross
basis and the related fulfillment fees are expensed within cost of revenues.

 Accounts
Receivable

 Accounts
receivable are recorded in the amount the Company expects to collect, net of the allowance for credit losses. The allowance for credit
losses is the Company's best estimate of the amount of probable credit losses based on customer past payment history, product usage
activity, and recent communications with the customer. Individual customer balances which are over 90 days past due are reviewed individually
for collectability and written-off when recovery is not probable. The Company does not have any off-balance sheet credit exposure related
to its customers. Allowance for credit losses was $ 25,000 as of December 31, 2024 and December 31, 2023.

 Income
Taxes

 The
Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective income tax bases, and operating loss and tax credit carryforwards. The Company's financial statements contain
certain deferred tax assets, which have arisen primarily as a result of operating losses, as well as other temporary differences between
financial and tax accounting. In accordance with the provisions of the Income Taxes topic of the Codification, the Company is required
to establish a valuation allowance if the likelihood of realization of the deferred tax assets is reduced based on an evaluation of objective
verifiable evidence. Management judgment is required in determining the Company's provision for income taxes, the Company's
deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. The Company evaluates
the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net deferred income
tax assets will not be realized.

 Utilization
of the net operating loss carryforwards ("NOL") and research and development credit carryforwards may be subject to a substantial
annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by
Section 382 of the Internal Revenue Code of 1986, as well as similar state provisions. Ownership changes may limit the amount of NOL
and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change,
as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of
a corporation by more than 50 percentage points over a three-year period. If the Company has experienced a change of control, utilization
of its NOL or tax credits carryforwards would be subject to an annual limitation under Section 382. Any limitation may result in expiration
of a portion of the NOL or research and development credit carryforwards before utilization. Subsequent ownership changes could further
impact the limitation in future years. Further, until a study is completed
and any limitation known, no amounts are being presented due to an uncertain tax position. A full valuation allowance has been provided
against the Company's NOL carryforwards and research and development credit carryforwards and, if an adjustment is required, this
adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement
of operations if an adjustment were required.

 F- 10

Inc.

 Notes

 A
two-step evaluation of all tax positions was performed, ensuring that these tax return positions meet the "more likely than not"
recognition threshold and can be measured with sufficient precision to determine the benefit recognized in the financial statements.
These evaluations provide the Company with a comprehensive model for how it should recognize, measure, present, and disclose in its financial
statements certain tax positions that it has taken or expects to take on income tax returns.

 Research
and Development

 Costs
incurred in research and development are expensed as incurred. Included in research and development costs are wages, benefits, product
design consulting, and other operating costs such as facilities, supplies, electronic components and overhead directly related to research
and development efforts.

 Product
Warranty Costs

 Product
warranty costs are estimated based on historical experience, product failure rates, repair volume and labor costs. Warranty costs are
accrued at the time of sale within cost of revenue and periodically reviewed in the aggregate. The liabilities for product warranty costs
of $ 5,700 and $ 9,400 at December 31, 2024 and 2023, respectively, are included in accrued expenses and compensation in the accompanying
balance sheets.

 Fixed
Assets and Long-Lived Assets

 Fixed
assets are recorded at cost and depreciated using the straight-line method over the estimated useful life of each asset. Expenditures
for repairs and maintenance are charged to expense as incurred. On disposal, the related assets and accumulated depreciation are eliminated
from the accounts and any resulting gain or loss is included in the Company's statement of operations. Leasehold improvements are
amortized over the shorter of the estimated useful life of the improvement or the remaining term of the lease.

 The
Company periodically evaluates the recoverability of its fixed assets and other long-lived assets which may result in an adjustment of
estimated depreciable lives or asset impairment. When indicators of impairment are present, the carrying values of the asset are evaluated
in relation to the assets operating performance and future undiscounted cash flows of the underlying assets. If an impairment is indicated,
the asset carrying value is reduced to fair value based on market value estimates and assumptions concerning the amount and timing of
future cash flows and discount rates.

 Accounting
for Stock-Based Compensation

 Stock-based
compensation cost is recognized ratably over the service period. The Company uses the Black-Scholes option pricing model for determining
the fair value of stock options and amortizes stock-based compensation expense using the straight-line method. The Black-Scholes model
requires assumptions regarding expected share price volatility, expected life of options, expected annual dividend yield, and risk-free
interest rate (See Note 3 — Stock-Based Compensation).

 F- 11

Inc.

 Notes

 Net
Loss per Share of Common Stock

 Basic
and dilutive net loss per share of common stock were as follows:

 Schedule of Basic and Dilutive Net
Loss Per Share

 Years

 2024

 2023

 Net loss applicable to common stockholders

 $
)

 $
)

 Weighted average number of shares of common
 stock outstanding, basic and dilutive

 1,969,858

 1,041,991

 Net loss per share of common stock applicable
 to common stockholders, basic and diluted

 $
 ( 3.96
)

 $
 ( 6.27
)

 Shares
underlying the following securities were excluded from the calculation of diluted net loss per share of common stock because their effect
was anti-dilutive for each of the periods presented:

 Schedule of Anti-dilutive Net Loss
Per Share of Common Share

 2024

 2023

 Years

 2024

 2023

 Options

 62,898

 64,659

 Unvested restricted stock awards

 6,222

 Unvested restricted stock units

 62,069

 60,492

 Convertible preferred
 stock

 Total

 125,837

 131,381

 Advertising
and Promotional Costs

 Advertising
and promotional costs are expensed as incurred. Advertising and promotion expense were $ 179,422 and $ 132,806, in 2024 and 2023, respectively.

 Accumulated
Other Comprehensive Items

 As
of December 31, 2024, the Company had $ ( 179,222) components of accumulated other comprehensive income (loss) other than net loss in
the statement of operations. As of December 31, 2023, the Company had $ 240,171 components
of accumulated other comprehensive income or loss other than net loss.

 Risks
and Uncertainties

 The
Company is subject to risks common to companies in the medical device industry, including, but not limited to, environmental risk such
as the COVID-19 pandemic, development by the Company or its competitors of new technological innovations, cybersecurity risk, dependence
on key personnel, customers' reimbursement from third-party payers, protection of proprietary technology, and compliance with regulations
of the U.S Food and Drug Administration, Federal Trade Commission and other governmental agencies.

 The
Company relies on in-house assembly and third-party manufacturers to manufacture the major portion of its current products and product
components. The disruption or termination of the supply of these products or a significant increase in the cost of these products from
these sources could have an adverse effect on the Company's business, financial position, and result of operations.

 Prior
period reclassifications

 Certain
items in the Statement of Cash Flows from the prior year were reclassified to conform with the current presentation.

 F- 12

Inc.

 Notes

 Recent
Accounting Pronouncements

 From
time to time, new accounting pronouncements are issued by the FASB and are adopted by us as of the specified effective date. Unless otherwise
discussed, we believe that the impact of recently adopted and recently issued accounting pronouncements will not have a material impact
on our balance sheets, results of operations and cash flows.

 In
June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.
 The guidance in ASU 2016-13 replaces the incurred loss impairment methodology under current GAAP. The new impairment requires immediate
recognition of estimated credit losses expected to occur for most financial assets and certain other instruments. It applies to all entities.
For trade receivables, loans and HTM debt securities, entities are required to estimate lifetime expected credit losses. Trading and
AFS debt securities are required to be recorded at fair value. SEC small reporting companies were required to adopt this new guidance
in fiscal years beginning on or after December 15, 2022. The Company adopted this guidance on a prospective basis as of January 1, 2023,
and it had no material impact on the financial statements.

 In
December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires public entities, on an annual
basis, to provide disclosures of specific categories in the rate reconciliation, additional information for reconciling items that meet
a quantitative threshold and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual periods beginning after
December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on the
Company's financial statements and disclosures.

 In
November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07").
ASU 2023-07 amends ASC 280, Segment Reporting ("ASC 280") to expand segment disclosures by requiring disclosure
of significant segment expenses that are regularly provided to the Company's chief operating decision maker ("CODM"),
the amount and description of other segment items, the title and position of the CODM, and an explanation of how the CODM uses the reported
measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 further permits
disclosure of more than one measure of segment profit or loss and extends the full disclosure requirements of ASC 280 to companies with
single reportable segments. The Company has a single reportable segment. See footnote 13 —Segment reporting below
for additional information.

 3.
 Stock-Based Compensation

 The
Company's 2022 Equity Incentive Plan (the "Stock Plan") provides for granting of incentive and nonqualified stock option
and stock bonus awards to officers, employees and outside consultants. Outstanding options under the Stock Plan generally vest over four
years and terminate 10 years after the grant date, or earlier if the option holder is no longer an executive officer, employee, consultant,
advisor or director of the Company. As of December 31, 2024, 279,890 shares of common stock were authorized for issuance under the
Stock Plan and 34,288 shares were available for future grant.

 The
Company's 2009 Non-Qualified Inducement Stock Plan (the "Inducement Plan") is intended to encourage employees, including
prospective employees, upon whose efforts the Company depends for the successful conduct of its business, to acquire an equity interest
in the Company. The Inducement Plan provides for the granting of awards, including non-qualified stock options, restricted stock, and
unrestricted stock. As of December 31, 2024, 156 shares of common stock were authorized for issuance and were available for future
grant under the Inducement Plan.

 The
exercise price of stock options awarded under the Stock Plan and the Inducement Plan may not be less than the fair value of the common
stock on the date of the option grant. For holders of more than 10 % of the Company's total combined voting power of all classes
of stock, incentive stock options may not be granted at less than 110 % of the fair value of the Company's common stock and for
a term not to exceed five years.

 F- 13

Inc.

 Notes

 The
Company's 2010 Employee Stock Purchase Plan (the "ESPP"), amended and restated in 2021 to increase stock purchase capacity,
authorizes an annual increase on the first day of each of the Company's fiscal years equal to the lesser of (i) 6,250 shares, (ii)
 1 percent of the shares of common stock outstanding on the last day of the immediately preceding fiscal year, or (iii) such lesser number
of shares as is determined by the Board. All full-time employees and certain part-time employees are eligible to participate in the ESPP.
For part-time employees to be eligible, they must have customary employment of more than five months in any calendar year and more than
20 hours per week. Employees who, after exercising their rights to purchase shares under the ESPP, would own shares representing 5% or
more of the voting power of the Company's common stock, are ineligible to participate.

 Under
the ESPP, participating employees can authorize the Company to withhold up to 10 % of their earnings during consecutive six-month payment
periods for the purchase of the shares. At the conclusion of each period, participating employees can purchase shares at 85 % of the lower
of their fair value at the beginning or end of the period. The ESPP is regarded as a compensatory plan. For the years ended December 31,
2024 and 2023, the Company issued 1,679 and 4,902 shares of its common stock, respectively, under the ESPP. As of December 31, 2024,
there were 26,660 remaining shares available to be issued under the ESPP.

 The
Company uses the Black-Scholes option pricing model for determining the fair value of shares of common stock issued or to be issued under
the ESPP. The following assumptions were used in determining fair value: The risk-free interest rate assumption is based on the United
States Treasury's constant maturity rate for a six month term (corresponding to the expected option term) on the date the option
was granted. The expected dividend yield is zero as the Company does not currently pay dividends nor expects to do so during the expected
option term. An expected term of six months is used based on the duration of each plan offering period. The volatility assumption is
based on daily historical volatility during the time period that corresponds to the expected option term and expected future stock price
volatility.

 The
assumptions that the Company used in the Black-Scholes pricing model in the calculation of stock-based compensation expense to determine
the fair value of the stock issued under the ESPP for the years ended December 31, 2024 and 2023 were as follows:

 Schedule of
Black-Scholes Pricing Model in Calculation of Stock-based Compensation Expense

 Years

 2024

 2023

 Risk-free interest rate

 4.2 %
 - 5.1 %

 4.8 %
 - 5.4 %

 Expected dividend yield

 —

 —

 Expected option term

 months

 months

 Volatility

 70.0
 %

 70.0
 %

 There
were no new issuances or exercises of stock options in 2024 and 2023.

 A
summary of option activity for the year ended December 31, 2024 is presented below:

 Summary of Option Activity

 of
 Options

 Weighted

 Average
 Exercise Price

 Weighted

 Average
 Remaining
 Contractual
 Life (in years)

 Aggregate

 Intrinsic Value

 Outstanding at December 31, 2023

 64,659

 $
 25.73

 Granted

 —

 —

 Exercised

 —

 —

 Forfeited

 ( 1,758
)

 32.48

 Expired

 ( 3
)

 4,787.20

 Outstanding at December 31, 2024

 62,898

 $
 25.32

 5.8

 $
 —

 Vested or expected to
 vest at December 31, 2024

 61,962

 $
 25.34

 5.8

 $
 —

 Exercisable at December 31, 2024

 62,962

 $
 25.34

 5.8

 $
 —

 F- 14

Inc.

 Notes

 Expected
to vest options are determined by applying the estimated forfeiture rate to the total outstanding options. Aggregate intrinsic value
represents the total pre-tax intrinsic value (the aggregate difference between the closing stock price of the Company's common
stock as of December 31, 2024, as applicable, and the exercise price for the in-the-money options) that would have been received
by the option holders if all the in-the-money options had been exercised on December 31, 2024.

 Total
unrecognized stock-based compensation costs related to non-vested stock options was $ 3,550 which related to 62,898 shares with a per
share weighted fair value of $ 25.32 as of December 31, 2024. This unrecognized cost is expected to be recognized over a weighted
average period of approximately four months.

2024 and 2023, certain employees and directors have been granted restricted stock awards and restricted stock units that are service
based. The fair value of the restricted stock awards and units are calculated based on the closing price of common stock on the date
of issuance.

2024, 91,577
restricted stock units were granted to employees and members of the Board of Directors that vest at different times during the years
2024 through 2026. Included therein were grants to the members of the Board of Directors, 54,920
restricted stock units in May 2024, that cliff vest in one year from issuance and 16,807
restricted stock units to a member of the Board of Directors that vest quarterly at different times during the years 2024 through
2025. In June 2024, 19,850
restricted stock units were issued to a consultant that vested monthly through December 2024. During 2023, 51,210 restricted
stock units were granted to employees and members of the Board of Directors that vest at different times during the years 2023
through 2026. Included therein were grants to the members of the Board of Directors, 21,584 restricted
stock units in May 2023, that cliff vest in one
year from issuance and 29,626 restricted
stock units to employees that vest quarterly at different times during the years 2023 through 2026.

 A
summary of restricted stock activity for the year ended December 31, 2024 is presented below:

 Summary of Restricted Stock Activity

 Restricted
 Stock Awards

 Weighted
 Average Grant Date Fair Value

 Restricted
 Stock Units

 Weighted
 Average Grant Date Fair Value

 Unvested at December 31, 2023

 6,222

 $
 43.28

 60,492

 $
 15.10

 Granted

 —

 $
 —

 91,577

 $
 4.11

 Vested

 ( 4,267
)

 $
 47.39

 ( 69,755
)

 $
 8.28

 Forfeited

 ( 1,093
)

 $
 34.32

 ( 20,245
)

 $
 4.94

 Unvested at December 31, 2024

 $
 34.32

 62,069

 $
 5.49

 The
Company recorded stock-based compensation expense of $ 729,310 and $ 699,505 for 2024 and 2023, respectively.

 Total
compensation cost related to non-vested awards not yet recognized at December 31, 2024 was $ 207,431. These unrecognized costs are expected
to be recognized over a weighted-average period of 9.5 months.

 4.
 Securities

 The
Company's marketable debt securities are classified as either AFS or HTM pursuant to ASC 320 - Investments - Debt Securities. The
following table summarizes the valuations and unrealized gains and losses of AFS securities which are recorded at estimated fair value
as of December 31, 2024 and 2023.

 Schedule of Valuations and
Unrealized Gains and Losses

 31, 2024

 Gross
 Unrealized

 Available-for-sale securities

 Cost

 Gains

 Losses

 Credit
 Losses

 Estimated
 Fair Value

 U.S. government
 bonds

 $
 11,606,301

 $

 $
 —

 $
 —

 $

 Total

 $
 11,606,301

 $

 $
 —

 $
 —

 $

 F- 15

Inc.

 Notes

 31, 2023

 Gross
 Unrealized

 Available-for-sale securities

 Cost

 Gains

 Losses

 Credit
 Losses

 Estimated
 Fair Value

 U.S. government bonds

 $
 4,412,935

 $
 5,665

 $
 —

 $
 —

 $
 4,418,600

 Commercial paper

 11,612,099

 234,506

 —

 —

 11,846,605

 Total

 $
 16,025,034

 $

 $
 —

 $
 —

 $
 16,265,205

 The
Company evaluates all HTM and AFS securities for impairment at each reporting period. It determined that changes in the fair value of
its securities at December 31, 2024 resulted primarily from interest rate fluctuations subsequent to the purchase date of the securities.
There was no deterioration in the credit worthiness of the issuers and no credit losses were recorded as of December 31, 2024 and 2023.

 5.
 Fair Value Measurements

 The
following tables set forth the Company's financial instruments that were measured at fair value:

 Schedule of financial instruments
Measured at Fair Value

 Total

 Level

 Level

 Level

 31, 2024

 Total

 Level

 Level

 Level

 Assets:

 Money market funds

 $
 1,169,383

 $
 1,169,383

 $
 —

 $
 —

 U.S. government bonds

 $

 $

 $
 —

 $
 —

 Total

 $
 12,836,633

 $
 12,836,633

 $
 —

 $
 —

 Total

 Level

 Level

 Level

 31, 2023

 Total

 Level

 Level

 Level

 Assets:

 Money market funds

 $
 1,284,290

 $
 1,284,290

 $
 —

 $
 —

 U.S. government bonds

 $
 4,418,600

 $
 4,418,600

 $
 —

 $
 —

 Commercial paper

 $
 11,846,605

 $
 —

 $
 11,846,605

 $
 —

 Total

 $
 17,549,495

 $
 5,702,890

 $
 11,846,605

 $
 —

 The
Company's accounts receivable, accounts payable, and accrued expenses are valued at cost which approximates fair value.

 6.

consist of the following:

of Inventories

 31,

 2024

 2023

 Purchased components

 $
 1,131,584

 $
 1,151,381

 Finished goods

 215,923

 408,047

 $
 1,347,507

 $
 1,559,428

 The
Company recorded a charge of $ 74,209 in 2024 to write down the value of its discontinued ADVANCE inventory within cost of revenues on
the Company's statements of operations. The Company also recorded a charge of $ 63,420 to cost of revenues in 2023 to reduce the
carrying value of inventory to net realizable value.

 F- 16

Inc.

 Notes

 7.
 Fixed Assets

 Fixed
assets consist of the following:

 Schedule of Fixed Assets

 Estimated
 Useful Life

 31,

 (Years)

 2024

 2023

 Computer and laboratory equipment

 $
 629,970

 $
 629,970

 Furniture and equipment

 33,104

 33,104

 Production equipment

 296,180

 296,180

 Leasehold improvements

 *

 70,918

 70,918

 Fixed assets, gross

 1,030,172

 1,030,172

 Less – accumulated
 depreciation

 ( 830,753
)

 ( 736,723
)

 Fixed assets, net

 $
 199,419

 $
 293,449

 *
 Lesser
 of life of lease or estimated useful life.

 Depreciation
expense was $ 94,030 and $ 55,712 for 2024 and 2023, respectively.

 8.
 Accrued Expenses and Compensation

 Accrued
expenses and compensation consist of the following:

 Schedule of Accrued
Expenses and Compensation

 31,

 2024

 2023

 Professional services

 $
 339,560

 $
 298,534

 Compensation

 62,673

 346,245

 Warranty

 5,700

 9,400

 Clinical

 —

 39,000

 Sales tax

 127,897

 141,672

 Other

 5,990

 41,888

 Accrued Expenses and
 Compensation

 $
 541,820

 $
 876,739

 9.
 Income Taxes

 Current
income tax expense (benefit) attributable to continuing operations was zero for the years ended December 31, 2024 and 2023.

 The
Company's effective income tax rate differs from the statutory federal income tax rate as follows for the years ended December
31, 2024 and 2023.

of Effective Income Tax Rate Differs from Statutory Federal Income Tax Rate

 31,

 2024

 2023

 Federal statutory rate

 ( 21.0
)%

 ( 21.0
)%

 State tax provision, net of federal provision

 ( 4.5
)

 ( 1.0
)

 Permanent items

 —

 0.1

 Federal research and development credits

 ( 1.3
)

 ( 2.0
)

 Valuation allowance

 26.8

 23.9

 Effective income tax
 rate

 —

 —

 F- 17

Inc.

 Notes

 The
Company's deferred tax assets consist of the following:

of Deferred Tax Assets

 31,

 2024

 2023

 Deferred tax assets:

 Net operating loss carryforwards

 $
 6,094,424

 $
 4,289,409

 Research and development credit carryforwards

 714,098

 544,415

 Accrued expenses

 11,235

 44,497

 Inventory reserve

 96,579

 97,378

 Stock-based compensation

 639,718

 311,039

 Lease liability

 27,009

 56,481

 Capitalized R&D

 1,313,116

 1,131,902

 Other

 —

 1,596

 Total gross deferred tax assets

 8,896,179

 6,476,717

 Valuation allowance

 ( 8,868,155
)

 ( 6,418,062
)

 Deferred tax liabilities:

 Right of use asset

 ( 27,977
)

 $
 ( 58,655
)

 Other

 ( 47
)

 $
 —

 Net deferred tax assets

 —

 $
 —

 At
December 31, 2024, the Company had federal NOLs of approximately $ 139.8 million, of which $ 118.7 million began to expire in 2022
and $ 21.1 million have an indefinite carryforward. At December 31, 2024, the Company had state NOLs of $ 63.2 million, some of which
have an indefinite carryforward, and others that begin to expire in 2025. At December 31, 2024, the Company has federal and state tax
credits of approximately $ 2.1 million and $ 0.9 million, respectively, which may be available to reduce future taxable income and related
taxes thereon. These amounts include tax benefits of approximately $ 2.5 million and $ 75,000 attributable to NOL and tax credit carryforwards,
respectively, that result from the exercise of employee stock options. The Company experienced an ownership change in 2019 as defined
under Internal Revenue Service Regulations, which significantly reduced the tax benefits associated with these carryforwards under Internal
Revenue Code Sections 382 and 383. The federal and state research and development credits each began to expire in 2022.

 In
accordance with the provisions of the Income Taxes topic of the Codification, the Company has evaluated the positive and negative evidence
bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating losses. Management has determined
that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets and, as a result,
a valuation allowance of approximately $ 8.9 million and $ 6.4 million has been established at December 31, 2024 and 2023, respectively.
The Company experienced a change in control during 2019. Accordingly, utilization of their respective consolidated and/ or separately
computed NOL's and/ or tax credit carryforwards is subject to an annual limitation for federal tax purposes under Internal Revenue
Code Sections 382 and 383. Due to this change in control, the Company estimates that approximately $ 123.8 million of federal NOL's
and/or tax credit carryforwards are effectively eliminated according to the Internal Revenue Code Sections 382 and 383 limitations. A
large portion of state NOLs and/ or tax credit carry forwards are also eliminated. The Company has no t recorded any amounts for unrecognized
tax benefits as of December 31, 2024 or 2023. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which
it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.
There are currently no pending income tax examinations. The Company's tax years are still open under statute from December 31,
2021 to the present. Earlier years may be examined to the extent that tax credit or net operating loss carryforwards are used in future
periods. The Company's policy is to record interest and penalties related to income taxes as part of its income tax provision.

 F- 18

Inc.

 Notes

 10.
 Commitments and Contingencies

 Operating
Leases

 The
Company's lease on its Woburn, Massachusetts corporate office and manufacturing facilities extends through mid-September 2025 at
a monthly base rent of $ 13,846 and with a 5 -year extension option.

 The
following is a maturity analysis of the annual cash flows of the operating lease liabilities as of December 31, 2024:

 Schedule of Maturity Analysis Operating Lease Liabilities

 2025

 117,431

 Total minimum lease
 payments

 $
 117,431

 Discount rate, 15 %

 $
 10,079

 Lease obligation, current portion

 107,352

 Lease obligation, net
 of current portion

 —

 Operating Lease Liabilities

 $
 117,431

 Total
recorded rent expense was $ 201,128 and $ 197,310, for 2024 and 2023, respectively. The Company records rent expense on its facility lease
on a straight-line basis over the lease term. The remaining operating lease term was 8.5 months as of December 31, 2024.

 Contingencies

 The
Company is not party to or aware of any legal proceedings.

 11.
 Retirement Plan

 The
Company maintains a 401(k) defined contribution savings plan for its employees who meet certain service period and age requirements.
Contributions are permitted up to the maximum allowed under the Internal Revenue Code of each covered employee's salary. The savings
plan permits the Company to contribute at its discretion. In 2024 and 2023 the Company made no contributions to the plan.

 12.
 Stockholders' Equity

 Preferred
stock and convertible preferred stock consist of the following:

 Schedule of Preferred
Stock and Convertible Preferred Stock

 31,

 2024

 2023

 Preferred stock, $ 0.001 par value; 5,000,000
 shares authorized at December 31, 2024 and 2023; no shares issued and outstanding at December 31, 2024 and 2023

 $
 —

 $
 —

 Series B convertible preferred
 stock, $ 0.001 par value, 147,000 shares designated at December 31, 2024 and 2023, and and 200 shares issued and outstanding at December
 31, 2024 and 2023, respectively

 Preferred stock

 Preferred
stock activity

 As
of December 31, 2024, 200 shares of Series B convertible preferred stock remained outstanding. The shares of Series B convertible
preferred stock are convertible into the equivalent of 8 shares of common stock at the option of the holder.

 Other
equity activity

2024 and 2023, the Company issued pursuant to its At Market Issuance Sales Agreement 458,380 shares of common stock, net of fees totaling
$ 84,754 for proceeds of $ 1,471,099 and 537,094 shares of its common stock, net of fees totaling $ 142,795 for proceeds of $ 2,305,753,
respectively.

 F- 19

Inc.

 Notes

2024 and 2023, respectively, the Company issued 1,679 shares of fully vested common stock with a value of $ 5,202 and 4,902 shares of
fully vested common stock with a value of $ 19,688 pursuant to the Company's 2010 Employee Stock Purchase Plan, respectively.

 As
of December 31, 2024 and 2023, the Company had 25,000,000 shares of common stock authorized and 2,051,028, and 1,524,939 shares
issued and outstanding, respectively. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of
the Company's stockholders. Common stockholders are not entitled to receive dividends unless declared by the Board of Directors.

 As
of December 31, 2024, the Company has reserved authorized shares of common stock for future issuance as follows:

of Reserved Authorized Shares of Common Stock for Future Issuance

 Outstanding stock options

 62,898

 Convertible preferred stock

 Unvested restricted stock units

 62,069

 Possible future issuance under inducement plan

 Possible future issuance under stock option
 plans

 34,288

 Possible future issuance
 under employee stock purchase plan

 26,660

 Total

 186,079

 13.
 Segment Reporting

 The
Company has a single reportable segment, medical devices. The medical device segment derives revenues from sales of medical devices and
accessories to healthcare providers and patients. The accounting policies are the same as those described in the summary of significant
accounting policies. The chief operating decision maker (CODM) assesses performance for the medical device segment and decides how to
allocate resources based on net income (loss) that is also reported in the Statement of Operations. The CODM uses net income (loss) to
evaluate the financial return on segment assets and in deciding whether to invest capital in the segment. The Company does not have intra-entity
sales or transfers.

 The
Company derives revenue primarily in the United States and manages the business activities on a consolidated basis. Revenues from sales
outside the United States were approximately 14 % and 20 % of total revenues in 2024 and 2023, respectively. The Company's long-lived
assets are all in the United States. The technology underlying the medical device business is precision, transcutaneous electrical nerve
stimulation developed and refined by the Company over its 25+ year history. The Company's CODM is its Founder, Chairman and Chief
Executive Officer.

 F- 20

Inc.

 Notes

 14.
 Employee Headcount Reduction

 The
Company incurred severance charges related to a reduction of 10 full time employees in the first quarter of 2024. This reduction was
implemented in order to better align staffing with work responsibilities and to reduce operating expenses. Total severance related charges
of approximately $ 580,000 were recorded in the quarter ended March 31, 2024 within the Company's Statements of Operations as follows:
$ 310,200 within research and development, $ 234,527 within sales and marketing, $ 4,200 within general and administrative and $ 31,500 within
cost of revenues.

of Employee Headcount Reduction

 Beginning balance, January 1, 2024

 $
 —

 B alance

 $
 —

 Additions

 580,427

 Amount paid out

 ( 580,427
)

 Ending Balance, December 31, 2024

 $
 —

 $
 —

 15.
 Management Retention and Incentive Plan

 Under
the Company's Management Retention and Incentive Plan (the "MRIP"), a portion of the consideration payable upon a change
in control transaction, as defined in the MRIP and its amendments, would be paid in cash to certain executive officers and key employees
and recorded as compensation expense within the Statement of Operations during the period in which the change of control transaction
occurs. See Note 17 Proposed Merger which describes a transaction which, if executed, would qualify as a change in control transaction
under the MRIP. This event would be subsequent to the Company's current fiscal year and consideration payable would be measured
subject to the terms of the change in control transaction at that future date.

 16.
 Reverse Stock Split

 On
November 21, 2023, the Company effected a 1-for-8 reverse stock split of its common stock, (the "Reverse Stock Split"). The
par value and other terms of the common stock were not affected by the Reverse Stock Split. The Company's shares outstanding immediately
prior to the split totaled 8,733,398, which were subsequently adjusted to 1,091,648 shares outstanding. No fractional shares were issued
in connection with the reverse stock split. Stockholders who otherwise would be entitled to receive fractional shares were received payment
in cash in lieu of any such resulting fractional shares of common stock as the post-reverse split amounts of common stock were rounded
down to the nearest full share. Share, per share, and stock option amounts for all periods presented within the financial statements
contained in the 2023 Annual Report on Form 10-K have been retroactively adjusted to reflect the Reverse Stock Split.

 17.
 Proposed Merger

 Merger
Agreement

 As
discussed in Note 1, on December 17, 2024, The Company entered into the Merger Agreement with electroCore and Merger Sub, a wholly
owned subsidiary of electroCore, providing for the Merger of Merger Sub with and into the Company with the Company being the surviving
corporation as a wholly owned Subsidiary of electroCore.

 At
the effective time of the Merger (the "Effective Time"), each share of common stock of the Company outstanding immediately
prior to the Effective Time, will be cancelled and cease to exist and shall be converted into the right to receive (i) an amount
in cash (the "Per Share Cash Consideration") equal to a pro rata share of the Company's balance of Net Cash (as defined
in and determined pursuant to the Merger Agreement) at the Effective Time, after deduction of certain pro rata payments that will be
due in accordance with the MRIP, without interest and (ii) one contingent value right (a "CVR"), representing the right
to receive contingent payments subject to the terms and conditions set forth in the CVR Agreement (as defined below) (the consideration
contemplated by (i) and (ii), together, the "Merger Consideration").

 F- 21

Inc.

 Notes

 In
addition, at the Effective Time, each share of preferred stock of the Company outstanding immediately prior to the Effective Time will
continue to be outstanding after the Effective Time, except that thereafter, such shares will no longer be convertible into Company common
stock, but will instead be converted into the right to receive the Merger Consideration payable in respect of the shares of Company common
stock.

 As
of the Effective Time, each award of restricted stock ("RSA") with respect to shares of common stock that is then outstanding
and unvested will be converted into the right to receive consideration as follows (notwithstanding any vesting conditions, restrictions
or risk of forfeiture): each RSA for which the holder thereof made a timely and valid election (a "Section 83(b) Election")
under Section 83(b) of the Internal Revenue Code of 1986, as amended, will be cancelled and converted into the right to receive
the Merger Consideration with respect to each share of common stock subject to such RSA in accordance with the Merger Agreement and the
CVR Agreement, and each RSA for which the holder thereof did not make a timely and valid Section 83(b) Election will be cancelled
and converted into the right to receive cash consideration and one CVR with respect to each share of common stock subject to such RSA
immediately prior to the Effective Time.

 At
the Effective Time, each option to purchase common stock that is outstanding and unvested immediately prior to the Effective Time (whether
time- or performance-based) will fully vest and become exercisable, and (i) each option that is then outstanding and unexercised
and which has a per share exercise price that is less than the Per Share Cash Consideration will be cancelled and converted into the
right to receive an amount in cash equal to: (a) the excess, if any, of the Per Share Cash Consideration over the exercise price
per share of such option, multiplied by the number of shares of common stock underlying such option and (b) one CVR with respect
to each share of common stock subject to such option immediately prior to the Effective Time; and (ii) each option that is then
outstanding and unexercised and that has an exercise price per share that is equal to or greater than the Per Share Cash Consideration
will be cancelled with no consideration payable in respect thereof.

 At
the Effective Time, each restricted stock unit ("RSU") that is then outstanding will automatically be cancelled and converted
into the right to receive (i) an amount in cash equal to the product of (A) the number of shares of common stock then underlying
such RSU multiplied by (B) the Per Share Cash Consideration, without any interest thereon and (ii) one CVR with respect to
each share of common stock subject to such RSU immediately prior to the Effective Time.

 Effective
as of the Effective Time, subject to the MRIP and subject to the Company's receipt of an executed general release of claims, each
eligible participant in the MRIP ("Participant") will have the right to receive (a) an amount in cash equal to (i) such
Participant's percentage interest set forth in the MRIP, multiplied by (ii) the aggregate amount of Net Cash, as determined
pursuant to the Merger Agreement; and (b) upon the making of any distributions pursuant to the CVR Agreement, such amounts in cash
equal to (i) such Participant's percentage interest set forth in the MRIP, multiplied by (ii) the gross proceeds in respect
of the applicable distribution period under the CVR Agreement.

 Consummation
of the Merger is subject to customary closing conditions, including, without limitation, the absence of certain legal impediments, the
approval by the holders of a majority of the outstanding shares of Company common stock entitled to vote on the Merger, the determination
of Net Cash pursuant to the Merger Agreement, the filing by the Company of its Annual Report on Form 10-K for the fiscal year ended
December 31, 2024, the parties having performed, or complied with, in all material respects its agreements, covenants and other
obligations required to be performed or complied with by the Merger Agreement at or prior to the closing date of the Merger, the representations
and warranties of the parties being true and correct (subject in certain instances to materiality qualifiers), there having been no continuing
material adverse effect on the Company since the signing of the Merger Agreement, and the Company having Net Cash of at least $ 8,000,000.

 The Merger is expected to close
early in the second quarter of 2025. On March 21, 2025, the Company held a special meeting of stockholders, where it obtained approval
of the Merger Agreement and the transactions contemplated thereunder by the holders of a majority of the outstanding shares of common
stock. The completion of the Merger remains subject to the satisfaction of other closing conditions.

 F- 22

Inc.

 Notes

 CVR
Agreement

 At
the Effective Time, electroCore will enter into a contingent value rights agreement (the "CVR Agreement") with a rights agent,
pursuant to which the holders of common stock, RSAs, RSUs and, if and when applicable pursuant to the terms of the Merger Agreement,
preferred stock and options may become entitled to receive cash payments contingent upon and subject to the receipt by the Company of
payments in connection with the sale of the Company's products under the Quell product line or proceeds from one or more agreements
providing for disposition of the Company's DPNCheck product line and upon the achievement of certain milestones related thereto.

 When
issued, each CVR will entitle the holder, over the term of the CVR Agreement, to receive a contingent payment in the form of a distribution
calculated as a portion of the proceeds, if any, during the applicable distribution period under the CVR Agreement, subject to certain
adjustments and deduction of certain expenses pursuant to the CVR Agreement.

 The
CVR Agreement has a term commencing on the Effective Date and ending on the earlier of (a) December 31 of the calendar year
in which electroCore will have caused to be paid to the holders pursuant to the terms of the CVR Agreement all distributions with respect
to all payments (including any contingent payments) contemplated to be made, and (b) December 31 of the calendar year in which
the five-year anniversary of the Effective Time shall have occurred (provided that if such five-year anniversary is during the month
of December, such date will be extended until March 31 of the immediately subsequent calendar year).

 18.
 Subsequent Event

 On
January 16, 2025, the Company entered into an Asset Purchase Agreement (the "Fukuda Asset Purchase Agreement") with Fukuda
Denshi Co., Ltd. ("Fukuda"), a Japanese corporation and distributor of DPNCheck in Japan. pursuant to which the Company sold
its rights, title and interest in the assets related to its DPNCheck product line for use in the Japanese market, including relevant
intellectual property rights. In accounting for the transaction, the Japan DPNCheck business is not clearly distinguished operationally and for financial reporting
purposes from the rest of entity and as such did not meet the criteria to be reported as discontinued operations
or assets held for sale.

 In
connection with the Company's entry into the Asset Purchase Agreement, the Company and Fukuda also entered into a Patent Assignment
Agreement, dated January 16, 2025, whereby the Company assigned to Fukuda certain intellectual property rights in Japan relating to its
DPNCheck product line, as well as an Intellectual Property License Agreement, dated January 16, 2025, whereby the Company granted to
Fukuda a limited, non-exclusive, royalty-free license in Japan to certain materials and know-how in connection with the use of the intellectual
property purchased pursuant to the Fukuda Asset Purchase Agreement.

to the Fukuda Asset Purchase Agreement, Fukuda agreed to pay the Company an initial payment of $ 400,000 in cash and two milestone payments
totaling up to $ 1.5 million after such closing, payable upon the achievement of certain milestones. The Company anticipates the completion
of the first milestone and milestone payment by March 31, 2025 and the second milestone and milestone payment during April 2025.

 F- 23

II — Valuation and Qualifying Accounts

 Description

 at
 Beginning of
 Period

 Charged
 to
 costs and
 expenses

 Charged
 to
 other
 accounts

 Recoveries/

 (Deductions)

 at
 End of
 Period

 December 31, 2024

 Allowance for Credit Losses

 $
 25,000

 $
 —

 $
 —

 $
 —

 $
 25,000

 Deferred Tax Asset Valuation Allowance

 6,418,062

 3,480,562

 —

 ( 1,030,470
)

 8,868,155

 Warranty Reserve

 9,400

 —

 —

 ( 3,700
)

 5,700

 December 31, 2023

 Allowance for Credit Losses

 $
 25,000

 $
 —

 $
 —

 $
 —

 $
 25,000

 Deferred Tax Asset Valuation Allowance

 4,868,469

 1,946,667

 —

 ( 397,074)
 (1)

 6,418,062

 Accrued Product Returns

 1,000

 —

 —

 ( 1,000
)

 —

 Warranty Reserve

 16,700

 —

 —

 ( 7,300
)

 9,400

 (1)
 Expiration of Federal
and State Net Operating Loss Carryforwards and other reductions.

 S- 1