What changed in this filing

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Item 1. Financial Statements

2024-05-14 compared with 2023-11-14 · 412 added, 354 removed, 233 unchanged (77% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

September 30, 2023

March 31, 2024

December 31, 2023

Current assets:

Cash and cash equivalents

Accounts receivable, net

Prepaid insurance

Other current assets

Total current assets

1 unchanged sentence

Property and equipment, net of accumulated depreciation

Intangible assets, net of accumulated amortization

Software development costs, net of accumulated amortization

Operating lease right of use asset

Deferred offering costs

5 unchanged sentences

Notes payable to related party, net of debt issuance costs

Current portion of operating lease liability

Stock awards liability

Total current liabilities

Non-current operating lease liability

Total liabilities

2 unchanged sentences

Preferred stock - $ 0.001 par value, 10,000,000 authorized and 0 shares issued and outstanding

Common stock - $ 0.001 par value, 100,000,000 authorized and 19,947,223 and 12,654,949 shares issued and outstanding September 30, 2023 and December 31, 2022

Common stock - $ 0.001 par value, 100,000,000 authorized and 2,194,196 and 854,162 shares issued and outstanding March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

4 unchanged sentences

Total liabilities and shareholders' equity

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Condensed Statements of Operations (Unaudited)

The accompanying notes are an integral part of these

unaudited condensed financial statements.

Condensed Statements of Operations

Three Months Ended

Nine Months Ended

September 30,

Operating expenses:

8 unchanged sentences

( 1,847,406 )

( 5,461,258 )

( 5,128,901 )

Other (expense) income:

Interest expense

( 1,133,398 )

Total other expense

( 1,133,398 )

Loss before income taxes

1 unchanged sentence

( 2,155,312 )

( 6,594,656 )

( 5,133,959 )

Provision for income taxes

1 unchanged sentence

$ ( 2,155,312 )

$ ( 6,594,656 )

$ ( 5,133,959 )

Net loss per share attributable to common stockholders

2 unchanged sentences

Basic and diluted

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The accompanying notes are an integral part of these

unaudited condensed financial statements.

Condensed Statements of Changes in Shareholders’

Equity (Unaudited)

For The Three and Nine Months Ended September 30, 2023

for the Three Months Ended March 31, 2024 and 2023

Paid-In-Capital

Balance, January 1, 2023

$ ( 71,735,834 )

Exercise of Restricted Stock Units

Share-based compensation

( 2,155,312 )

Balance, March 31, 2023

Balance, December 31, 2023

$ ( 80,543,330 )

Issuance of common shares, net of costs

Exercise of Restricted Stock Units

Issuance of warrants

Share-based compensation

Revaluation of share-based compensation liability

( 2,322,862 )

Balance, June 30, 2023

$ ( 76,214,008 )

Offering costs

Share-based compensation

Revaluation of share-based compensation liability

( 2,207,328 )

Balance, September 30, 2023

Balance, March 31, 2024

$ ( 82,750,658 )

For The Three and Nine Months Ended September 30, 2022

Paid-In-Capital

Balance, January 1, 2022

Balance, December 31, 2022

$ ( 71,735,834 )

1 unchanged sentence

Share-based compensation

Reclassification of share-based compensation liability

( 2,155,312 )

2 unchanged sentences

$ ( 73,891,146 )

Share-based compensation

Reclassification of share-based compensation liability

( 2,050,385 )

Balance, June 30, 2022

$ ( 68,642,032 )

Share-based compensation

Revaluation of share-based compensation liability

( 1,330,314 )

Balance, September 30, 2022

$ ( 69,972,348 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Condensed Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,

The accompanying notes are an integral part of these

unaudited condensed financial statements.

Condensed Statements of Cash Flows

Three Months Ended March 31,

Cash flows from operating activities:

1 unchanged sentence

$ ( 2,155,312 )

Adjustments to reconcile net loss to net cash provided by (used in) operating

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Finance charge associated with debt issuance cost

5 unchanged sentences

Prepaids and other non-current assets

Operating lease right of use asset

Accounts payable and accrued liabilities

Lease liabilities

Net cash used in operating activities

3 unchanged sentences

Software capitalization

( 1,673,517 )

Purchase of property and equipment

Net cash used in investing activities

( 1,677,326 )

Cash flows from financing activities:

Net settlement of share-based compensation liability

Proceeds from related party debt

Proceeds from issuance of common shares

Net cash provided by (used in) financing activities

Net increase in cash

Net cash provided by financing activities

Net decrease in cash and cash equivalents

( 1,422,395 )

Cash, beginning of year

Cash and restricted cash, end of period

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

Supplemental disclosures of cash flow information:

2 unchanged sentences

Reclassification of deferred offering cost

Original issue discount and issuance of warrants on related party debt

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The accompanying notes are an integral part of these

unaudited condensed financial statements.

Notes to Condensed Financial Statements (Unaudited)

7 unchanged sentences

Basis of Presentation

The accompanying financial statements have been

prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

The accompanying financial statements have been prepared

in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Interim Financial Information

10 unchanged sentences

recurring nature.

Reverse Stock Split

The Company filed an amendment to its Certificate

of Incorporation with the Secretary of State in Delaware which became effective as of 5:00 P.M.

Eastern Time on February 26, 2024.

a result, every twenty-five (25) issued shares of common stock were automatically combined into one share of common stock.

Shares of the Company’s common stock were assigned

a new CUSIP number (05072K 206) and began trading on a split-adjusted basis on February 27, 2024.

The reverse stock split did not change the authorized

number of shares of the Company’s common stock.

No fractional shares were issued and any fractional shares resulting from the reverse

stock split were rounded up to the nearest whole share.

Therefore, stockholders with less than 25 shares received one share of stock.

All stock amounts have been retrospectively adjusted to account for

the reverse stock split.

The reverse stock split applies to the Company’s

outstanding warrants, stock options and restricted stock units.

The number of shares of common stock into which these outstanding securities

are convertible or exercisable were adjusted proportionately as a result of the reverse stock split.

The exercise prices of any outstanding

warrants or stock options were also proportionately adjusted in accordance with the terms of those securities and the Company’s

equity incentive plans.

Use of Estimates

4 unchanged sentences

Actual results could differ from those estimates.

The condensed financial statements include some

amounts that are based on management's best estimates and judgments.

The most significant estimates relate to valuation of capital stock,

warrants and options to purchase shares of the Company's common stock, and the estimated recoverability and amortization period for capitalized

The condensed financial statements include some amounts

that are based on management’s best estimates and judgments.

The most significant estimates relate to valuation of capital stock, warrants

and options to purchase shares of the Company’s common stock, and the estimated recoverability and amortization period for capitalized

software development costs.

13 unchanged sentences

Emerging Growth Company Status

The Company is an emerging growth company, as

defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies

can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards

apply to private companies.

The Company is an emerging growth company, as defined

in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies can delay

adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply

to private companies.

The Company has elected to use this extended transition period to comply with certain new or revised accounting

1 unchanged sentence

Going Concern

The Company had cash

of $ 2,199,678 as of September 30, 2023.

The Company will need additional funding to complete the development of the full product line

and scale products with a demonstrated market fit.

The Company had cash and cash equivalents of

$ 2,732,538 as of March 31, 2024.

The Company will need additional funding to complete the development

of the full product line and scale products with a demonstrated market fit.

The Company raised an additional $ 3.56 million in April 2024

and paid down $ 2.75 million in current debt due.

Management has plans to secure such additional funding.

If the Company is unable to

raise capital when needed or on acceptable terms, the Company will be forced to delay, reduce, or eliminate technology development and

commercialization efforts.

If the Company is unable to raise

capital when needed or on acceptable terms, the Company will be forced to delay, reduce, or eliminate technology development and commercialization

As a result of the Company’s recurring losses

12 unchanged sentences

For the foreseeable future, the Company will incur significant operating

expenses, capital expenditures and working capital funding that will deplete cash on hand by February 2024.

expenses, capital expenditures and working capital funding that will deplete cash on hand during the third quarter of 2024.

Cash and Cash Equivalents

The Company considers all highly liquid instruments

purchased with an original maturity of three months or less to be cash equivalents.

The Company had no cash equivalents as of September

30, 2023 or December 31, 2022.

The Company maintains cash deposits at several

financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance

may at times exceed these limits.

As of September 30, 2023, the Company had approximately $ 1.9

million in excess of federally insured limits.

As of December 31, 2022, the Company had approximately $ 1.4

million in excess of federally insured limits.

The Company continually monitors its positions with, and the credit quality of,

the financial institutions with which it invests.

The Company had cash equivalents of approximately

$ 3,100 as of March 31, 2024 and December 31, 2023.

The Company maintains cash deposits at several financial

institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance may at times

exceed these limits.

As of March 31, 2024, the Company had approximately $ 2.5 million in excess of federally insured limits.

As of December

31, 2023, the Company had approximately $ 0.6 million in excess of federally insured limits.

The Company continually monitors its positions

with, and the credit quality of, the financial institutions with which it invests.

Software Development Costs

The Company accounts for costs incurred in the

development of computer software as software research and development costs until the preliminary project stage is completed, management

has committed to funding the project, and completion and use of the software for its intended purpose is probable.

The Company ceases capitalization of development

costs once the software has been substantially completed and is available for its intended use.

Software development costs are amortized

over a useful life estimated by the Company’s management of three years.

The Company accounts for costs incurred in the development

of computer software as software research and development costs until the preliminary project stage is completed, management has committed

to funding the project, and completion and use of the software for its intended purpose is probable.

The Company ceases capitalization of development costs

once the software has been substantially completed and is available for its intended use.

Software development costs are amortized over

a useful life estimated by the Company’s management of three years.

Costs associated with significant upgrades and enhancements

4 unchanged sentences

determined to be in excess of anticipated future net revenues are considered impaired and expensed during the period of such determination.

We determined that no such impairments were required during the three months and nine months ended September 30, 2023.

The Company determined that no such impairments were required during the three months ended March 31, 2024 and 2023.

Software development

costs of $ 213,705 and $ 394,893 were capitalized for the three months ended September 30, 2023, and 2022, respectively and $ 743,208 and

$ 1,673,517 were capitalized for the nine months ended September 30, 2023 and 2022, respectively.

Amortization of capitalized software

development costs were $ 458,973 and $ 262,703 for the three months ended September 30, 2023, and 2022, respectively and $ 1,331,823 and

$ 693,441 for the nine months ended September 30, 2023 and 2022, respectively and are included in depreciation and amortization expense

in the Company’s condensed statement of operations.

costs of $ 273,388 and $ 270,574 were capitalized for the three months ended March 31, 2024 and 2023, respectively.

Amortization of capitalized

software development costs was $ 476,918 and $ 436,425 for the three months ended March 31, 2024, and 2023, respectively and is included

in depreciation and amortization expense in the Company’s condensed statement of operations.

Revenue Recognition

Revenue will be measured according to Accounting

Standards Codification (“ASC”) 606, Revenue – Revenue from Contracts with Customers, and will be recognized based on

consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties.

The Company will recognize revenue when a performance obligation is satisfied by transferring control over a service or product to a customer.

The Company will report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific

Revenue will be measured according to Accounting Standards

Codification (“ASC”) 606, Revenue – Revenue from Contracts with Customers, and will be recognized based on consideration

specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties.

will recognize revenue when a performance obligation is satisfied by transferring control over a service or product to a customer.

Company will report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific

revenue-producing transaction between a seller and a customer in the condensed statements of operations.

7 unchanged sentences

There is no revenue recognized for unpaid trial subscriptions.

Customers may pay for the services in advance

of the performance obligation and therefore these prepayments would be recorded as deferred revenue.

Customers may pay for the services in advance of the

performance obligation and therefore these prepayments would be recorded as deferred revenue.

The deferred revenue will be recognized

4 unchanged sentences

fair value of the awards on the date of grant in accordance with ASC 718.

Compensation expense for all share-based awards

is based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).

Compensation expense for all share-based awards is

based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).

The Company records share-based compensation expense related to non-employees over the related service periods.

Certain share-based compensation awards include

a net-share settlement feature that provides the grantee an option to withhold shares to satisfy tax withholding requirements and are

classified as a share-based compensation liability.

Cash paid to satisfy tax withholdings is classified as financing activities in the

condensed statements of cash flows.

Recently Adopted ASUs

ASU 2016-13-Financial Instruments-Credit Losses-

The new guidance makes significant changes to the accounting for credit losses on financial instruments and disclosures about them.

Specifically,

the new CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that

considers forecasts of future economic conditions in addition to information about past events and current conditions.

The Company adopted

the new standard beginning January 1, 2023.

The adoption of the new standard did not have a material impact on the Company’s financial

Note 2 – Property & Equipment

and Software Development Costs

Property and equipment and software development

costs consisted of the following as of:

Certain share-based compensation awards include a

net-share settlement feature that provides the grantee an option to withhold shares to satisfy tax withholding requirements and are classified

as a share-based compensation liability.

Cash paid to satisfy tax withholdings is classified as financing activities in the condensed

statements of cash flows.

Reclassifications

Certain prior period amounts

have been reclassified to conform to the current period presentation.

The reclassifications did not have an impact on net loss as previously

Note 2 – Property & Equipment, Intangible

Assets, and Software Development Costs

Property and equipment and software development costs

consisted of the following as of:

Schedule of property, equipment and software development costs

September 30, 2023

December 31, 2022

Computers and equipment

1 unchanged sentence

Total property and equipment, net

Accumulated amortization

Total intangible assets, net

Software development costs

4 unchanged sentences

The Company recognized depreciation expense of $ 6,494

$ 6,193 and $ 12,136 for the three months ended September 30, 2023, and 2022, respectively related to property and equipment and amortization

expense of $ 458,973 and $ 262,703 for the three months ended September 30, 2023, and 2022, respectively related to software development

The Company recognized depreciation expense of $ 18,997 and $ 28,529 for the nine months ended September 30, 2023, and 2022, respectively

related to property and equipment and amortization expense of $ 1,331,823 and $ 693,441 for the nine months ended September 30, 2023, and

2022, respectively related to software development costs.

and $ 6,610 for the three months ended March 31, 2024 and 2023, respectively related to property and equipment, amortization expense of

$ 334 and $ 0 for the three months ended March 31, 2024 and 2023 related to intangible assets, and amortization expense of $ 476,918 and

$ 436,425 for the three months ended March 31, 2024 and 2023, respectively related to software development costs.

Note 3 – Accounts Payable and Accrued

Accounts payable and accrued liabilities consist

of the following:

Accounts payable and accrued liabilities consist of

the following:

Schedule of accounts payable and accrued liabilities

September 30, 2023

December 31, 2022

Accounts payable and accrued liabilities

1 unchanged sentence

Accrued interest

Total accounts payable and accrued liabilities

Note 4 – Notes Payable to Related

Party, net of debt issuance costs

In November 2022, the Company entered into a Secured

Bridge Note (the “Prior Note”) financing with an existing shareholder of the Company.

The principal amount of the Prior Note

was $ 2,200,000 including an original issue discount of $ 200,000 .

The Prior Note bears interest at a stated rate of 10% and had an original

maturity date of May of 2023.

The Prior Note is secured by a lien on substantially all of the Company’s assets.

At maturity, the

lender had the option to convert any original issue discount and accrued but unpaid interest into shares of the Company’s common

stock at a fixed conversion price of $1.23 per share.

The conversion right is available to the lender at the earlier of (i) maturity,

or (ii) payback of all the principal.

In connection with the Prior Note financing, the Company issued 300,000 common stock warrants with

a five-year term and an exercise price of $2.10 per share.

The warrants were valued at $ 361,878 , which was recorded as an additional debt

During May of 2023, the Company extended the maturity date by six months to November 2023 at an increased annual interest rate

of 20% and the issuance of an additional 300,000 warrants.

The additional warrants were valued at $ 94,083 , which was also recorded as

an additional debt discount.

The embedded conversion option was not accounted for separately as, in accordance with the guidance outlined

in ASC 815-40, it was considered indexed to the Company’s shares.

Similarly, the issued warrants were classified in equity as they

were also considered indexed to the Company’s shares in accordance with ASC 815-40.

In connection with an additional financing with

the same related party during April of 2023, the Company cancelled the original 300,000 warrants issued with the Prior Note and issued

600,000 new common stock warrants with a five-year term and an exercise price of $0.61 per share.

The Company recognized the modification

in accordance with ASC 815-40-35, which resulted in the recognition of additional debt discount in the amount of $ 35,981 .

Upon issue of

the new common stock warrants, 300,000 were fully vested and immediately exercisable upon issue.

The remaining 300,000 warrants were unvested.

During May of 2023, the Company extended the maturity

date of the Prior Notes by six months to November 2023 at an increased annual interest rate of 20%.

In connection with this extension,

the 300,000 outstanding unvested warrants became vested and exercisable.

As of September 30, 2023, and December 31, 2022,

the balance of the Prior Note, net of debt issuance costs, was $2,168,639 and $1,775,956, respectively.

Interest expense related to the

Prior Note for the three and nine months ended September 30, 2023, was $157,298 and $762,112.

As noted above, the Company entered into an additional

Secured Bridge Note (“New Note”) financing with the same accredited investor and significant existing shareholder during April

In addition, the Company also amended the terms of the Prior Note.

The principal amount of the New Note is $ 825,000 including

an original issue discount of $ 75,000 .

The New Note bears interest at an annual stated rate of 10% with an original maturity date of July

The New Note is secured by a lien on substantially all of the Company’s assets.

At maturity the lender has the option to convert

any original issue discount and accrued but unpaid interest into shares of the Company’s common stock at a fixed conversion price

of $0.61 per share.

The conversion right is available to the lender at the earlier of (i) maturity, or (ii) payback of all the principal.

In connection with the New Note financing, the Company issued 325,000 common stock warrants with a five-year term and an exercise price

of $0.61 per share and an additional 325,000 common stock warrants with a five-year term and an exercise price of $0.61 per share that

are exercisable in the event that the loan term is extended.

The warrants were valued at $ 252,940 , which was recorded as additional debt

Similar to the accounting for the Prior Note, the embedded conversion option was not accounted for separately as, in accordance

with the guidance outlined in ASC 815-40, it was considered indexed to the Company’s shares.

In addition, the issued warrants were

classified in equity as they were also considered indexed to the Company’s shares in accordance with ASC 815-40.

As of September 30, 2023, the balance of the New

Note issued in April 2023, net of debt issuance costs, was $ 825,000 .

Interest expense related to the New Note for the three and nine months

ended September 30, 2023 was $ 401,441 , respectively.

On July 31, 2023, the Company extended the maturity

date of the New Note to November 30, 2023.

In connection with such extension, 325,000 outstanding unvested warrants became vested and

Accounts payable and accrued liabilities

Note 4 – Notes Payable to Related Party,

net of debt issuance costs

During November 2022, the

Company entered into a Secured Bridge Note (the “Prior Note”) financing with an accredited investor and existing shareholder

of the Company.

The Prior Note had a principal amount of $ 2,200,000 , including an original issue discount of $ 200,000 .

The Prior Note

bore interest at an annual stated interest rate of 10% with an original maturity date of May of 2023.

The Prior Note is secured by a lien

on substantially all of the Company’s assets.

At maturity, the lender had the option to convert the original issue discount and

accrued but unpaid interest into shares of the Company’s common stock at a fixed conversion price of $ 30.75 per share.

The conversion

option was available to the lender at the earlier of (i) maturity, or (ii) payback of all the principal.

The embedded conversion option

was not accounted for separately, in accordance with the guidance outlined in ASC 815-40, as it was considered indexed to the Company’s

The Company had the option to extend the maturity date by six months to November 2023.

In the event of an extension, the Company

will issue additional warrants, and the interest rate on the Note will increase to 20%.

In connection with

the Prior Note financing, the Company issued 12,000

common stock warrants with a five-year term at an exercise price of $ 52.50

At the time of issuance, the common stock warrants were valued at $ 361,878

and recorded as a debt discount to the Prior Note.

The issued common stock warrants were classified as equity as they were indexed

to the Company’s shares in accordance with ASC 815-40.

During April 2023, the Company

entered into an additional Secured Bridge Note (the “New Note”) financing with the same accredited investor and significant

existing shareholder.

The New Note had a principal amount of $ 825,000 , including an original issue discount of $ 75,000 .

The New Note bore

interest at an annual stated interest rate of 10% with an original maturity date of July 2023.

The New Note is secured by a lien on substantially

all of the Company’s assets.

At maturity, the lender had the option to convert the original issue discount and accrued but unpaid

interest into shares of the Company’s common stock at a fixed conversion price of $ 52.50 per share.

The conversion option was available

to the lender at the earlier of (i) maturity, or (ii) payback of all the principal.

The embedded conversion option was not accounted for

separately, in accordance with the guidance outlined in ASC 815-40, as it was considered indexed to the Company’s shares.

In connection with

the New Note financing, the Company issued 26,000

common stock warrants with a five-year term at an exercise price of $ 52.50

per share, from which 13,000

common stock warrants were exercisable immediately and were exercisable in the event that the loan term is extended.

At the time of

issuance, the common stock warrants were valued at $ 252,940 ,

which was recorded as an additional debt discount to the New Note.

The issued common stock warrants were classified as equity as

they were indexed to the Company’s shares in accordance with ASC 815-40.

During April 2023,

the Company also modified the terms of the Prior Note and cancelled the original 12,000

common stock warrants issued with the Prior Note.

The Company recognized the modification in accordance with ASC 815-40-35, which

resulted in the recognition of debt discount in the amount of $ 35,981 .

In lieu of the cancelled common stock warrants, the Company issued 24,000

new common stock warrants with a five-year term at an exercise price of $ 52.50

From the newly issued 24,000 new common stock warrants, 12,000

common stock warrants were fully vested and immediately exercisable, while the remaining 12,000

common stock warrants remained unvested.

The issued common stock warrants were classified as equity as they were indexed to the

Company’s shares in accordance with ASC 815-40.

In May of 2023, the

Company renegotiated with the lender an extension of the maturity date of the Prior Note for six months to November 2023 with an

increased annual interest rate of 20% and issued an additional 12,000

common stock warrants to the lender.

The additional common stock warrants were valued at $ 94,083

and recorded as an additional debt discount.

The issued common stock warrants were classified in equity as they were considered

indexed to the Company’s shares in accordance with ASC 815-40.

In connection with this extension, the 12,000

outstanding unvested warrants became vested and exercisable.

On July 31, 2023,

the Company extended the maturity date of the New Note to November 30, 2023.

In connection with such extension, 13,000

outstanding unvested common stock warrants became vested and exercisable.

There was no change in the application of the accounting

under ASC 815-40.

As of March 31, 2024 and December 31, 2023, the balance

of the Prior Note, net of debt issuance costs, was $ 2,200,000 .

Interest expense related to the Prior Note, including interest incurred,

amortization of the debt discount, and the warrant amortization for the three months ended March 31, 2024 and 2023 was $ 110,000 and $ 305,941 ,

respectively.

As of March 31, 2024 and December 31, 2023, the balance of the New Note issued in April 2023, net of debt issuance costs,

was $ 825,000 .

Interest expense related to the New Note, including interest incurred, amortization of the debt discount, and the warrant

amortization for the three months ended March 31, 2024 was $ 41,137 .

On April 9, 2024, the Company and the investor entered

into an Amendment and Waiver Agreement relating to the Notes (see Note 9).

Note 5 – Commitments and Contingencies

Operating Lease

In April 2021, the Company entered into a lease

agreement for office space in Boulder, Colorado comprising 8,639 square feet.

The lease commenced on May 15, 2021, and terminated after

The Company subsequently extended the lease through November 2022.

In November 2022, the Company amended the lease, reducing

the square footage rented to 2,160 with a base rent of $4,018 per month.

The amended lease terminates after 13 months.

Rent expense, as

part of general and administrative expenses as included in the Condensed Statement of Operations, was $ 12,053 and $ 39,935 for the three

months ended September 30, 2023, and 2022, respectively and $ 49,491 and $ 83,117 for the nine months ended September 30, 2023, and 2022,

respectively.

On March 25, 2024, the Company entered into

a new 37-month operating lease commencing on April 1, 2024 with two separate two year renewal options.

The monthly base rent for

months two through 14 is $2,456, increasing to $3,070 for months 15 through 26, and ending at $3,684 for months 27 through 37.

expense, as part of general and administrative expenses in the condensed statement of operations, was $ 22,480

for the three months ended March 31, 2024, which related to a temporary month-to-month lease the Company entered into until a

long-term space was identified.

Rent expense was $ 12,053

for the three months ended March 31, 2023 under the former lease that terminated in December 2023.

In the normal course of business, the Company

6 unchanged sentences

No complaint has been filed by the investor.

The alleged damages asserted

by the investor are less than approximately $300,000.

The outcome of the complaint was neither probable or estimable as of the date the

financial statements were issued.

The alleged damages

asserted by the investor are less than approximately $300,000.

The outcome of the complaint was neither probable or estimable as of the

date the financial statements were issued, therefore, no accrual has been made.

NASDAQ Deficiencies

On May 23, 2023, we received a letter (the

“Notice”) from the Listing Qualifications Staff of the Nasdaq Stock Market, LLC (“Nasdaq”) indicating that,

based upon the Company’s reported stockholder’s equity of $ 2,095,247

at the end of March 31, 2023, we are not in compliance with the requirement to maintain a minimum stockholder’s equity of

$2,500,000 for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(b)(1) the

“Stockholders’ Equity Requirement”).

We were provided a compliance period of 45 calendar days from the date of the Notice, or

until July 7, 2023, to submit a plan to regain compliance with the Stockholder’s Equity Requirement, pursuant to Nasdaq

Listing Rule 5810(c)(2)(A).

On July 10, 2023, the Company received a letter

from Nasdaq advising that the Company had been granted an extension to file a Form 10-Q for the quarter-ended June 30, 2023 evidencing

compliance with Stockholder’s Equity Requirement.

The stockholder’s equity balance as of June 30, 2023 was $ 4,331,777 ,

which is $1,831,778 over the $2.5 million Stockholders’ Equity Requirement.

On August 25,

2023, Nasdaq confirmed that the Company had regained compliance with the Stockholders’ Equity Requirement and that this matter

is now closed.

Separately, on April

24, 2023 we received a letter from Nasdaq indicating that the Company is not in compliance with the $1.00 Minimum Bid Price requirement

set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market (the “Bid Price Requirement”).

The letter indicated

that the Company will be provided 180 calendar days (or until October 23, 2023) in which to regain compliance.

If at any time during this

180 calendar day period the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of ten consecutive

business days, Nasdaq will provide the Company with a written confirmation of compliance and the matter will be closed.

On October 24, 2023,

the Company received a written notice from the Nasdaq staff indicating that the Company had not regained compliance with the Bid Price

Requirement and was not eligible for an additional 180 calendar day compliance period.

As a result, the staff determined to delist the

Company’s Common Stock from Nasdaq, unless the Company timely requests an appeal of the Staff’s determination to a Hearings

Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.

The Company has requested

a hearing before the Panel to appeal the October notice and to address compliance with the Bid Price Requirement.

While the appeal process

is pending, the suspension of trading of the Company’s common stock, will be stayed and the Common Stock will continue to trade

on Nasdaq until the hearing process concludes and the Panel issues a written decision.

The hearing is expected to occur in mid-January

The Company intends to

consider all options to regain and maintain compliance with all Nasdaq continued listing requirements.

The Nasdaq listing rules

require listed securities to maintain a minimum bid price of $1.00 per share.

As previously reported in the Current Report on Form 8-K

filed on November 28, 2023, the Company received a written notice from Nasdaq indicating that it was not in compliance with the $ 1.00

minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing.

As a result, the Nasdaq staff determined

to delist the Company’s Common Stock from Nasdaq, unless the Company timely requests an appeal of the Staff’s determination

to a Hearings Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.

with the Panel occurred on January 18, 2024.

On November 21,

2023, the Company received a written notice from Nasdaq indicating that it was not in compliance with Nasdaq Listing Rule

5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000

in stockholders’ equity for continued listing (the “Stockholders’ Equity Requirement”).

Company’s quarterly report on Form 10-Q for the period ended September 30, 2023, the Company reported stockholders’

equity of $ 2,415,012 ,

and, as a result, did not satisfy Listing Rule 5550(b)(1).

Nasdaq’s November written notice had no immediate impact on the

listing of our common stock.

The hearing with the Panel occurred on January 18, 2024, and addressed all outstanding listing

compliance matters, including compliance with the Stockholders’ Equity Notice as well as compliance with the Bid Price

On January 30, 2024, the

Panel granted the Company’s request for an exception to Nasdaq’s listing rules until April 22, 2024, to demonstrate compliance

with all applicable continued listing requirements for the Nasdaq Capital Market.

On March 20, 2024, the Company received a letter

from Nasdaq stating it had regained compliance with the minimum bid requirement.

The Panel reminded the Company that although it regained

compliance with the minimum bid requirement, it is also required to regain compliance with the equity requirement.

Therefore, this matter

will remain open until the Company demonstrates compliance with all requirements.

On April 16, 2024, the Company received a letter

from Nasdaq granting an exception to the Exchange’s listing rules until May 20, 2024, to demonstrate compliance with Listing Rule

5550(b)(1) (the “Equity Rule”).

The Company intends to consider

all options to regain and maintain compliance with all Nasdaq continued listing requirements.

The Company’s receipt

2 unchanged sentences

Stock Options

The following table presents the activity for

stock options outstanding:

The following table presents the activity for stock

options outstanding:

Schedule of stock option activity

2 unchanged sentences

Forfeited/canceled

Outstanding - September 30, 2023

Outstanding – March 31, 2024

Weighted Average Exercise Price

Outstanding - December 31, 2022

Forfeited/canceled

Outstanding – March 31, 2023

The following table presents the composition

4 unchanged sentences

Exercise Prices

Total - September 30, 2023

Total – March 31, 2024

Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

During the nine months ended September 30, 2023,

the Company granted 200,200 stock options.

Under the terms of the option agreements, the options are subject to certain vesting requirements.

The fair value of each award is determined using the Black-Scholes option-pricing model which values options based on the stock price

at the grant date, the expected life of the option, the estimated volatility of the stock, and the risk-free interest rate over the expected

life of the option.

The expected volatility was determined considering comparable companies historical stock prices as a peer group for

the fiscal year the grant occurred and prior fiscal years for a period equal to the expected life of the option.

The risk-free interest

rate was the rate available from the St.

Louis Federal Reserve Bank with a term equal to the expected life of the option.

life of the option was estimated based on a mid-point method calculation.

The Company’s options summarized above have been retroactively restated for the effect of the 25-for-1 reverse stock split.

Restricted Stock Units

The following table presents the activity for

restricted stock units outstanding:

Schedule of restricted stock units outstanding

The following table presents the activity for restricted

stock units outstanding:

Schedule of restricted stock outstanding

Restricted Stock Units

3 unchanged sentences

Vested/issued

Outstanding - September 30, 2023

During the nine months ended September 30, 2023,

the Company granted 37,500 restricted stock units.

Under terms of the restricted stock agreement, the restricted stock units are subject

to a certain vesting schedule.

In 2023, certain restricted stock unit holders

elected a net-share settlement for vested shares to satisfy income tax requirements.

The Company applied modification accounting in accordance

with ASC 718 and recorded the expected value of these share-based awards as a liability.

The Company recognized a share-based compensation

liability as of September 30, 2023, of $ 45,981 related to the fair value of vested shares over the service period.

The Company recognized share-based compensation

expense related to stock options and restricted stock units of $ 799,677 and $ 698,486 for the nine months ended September 30, 2023, and

2022, respectively.

The remaining unvested share-based compensation expense of $ 1,447,278 is expected to be recognized over the next 90

The following table presents the activity for

warrants outstanding:

Schedule of warrant outstanding

Weighted Average Exercise Price

Outstanding – March 31, 2024

Restricted Stock Units

Weighted Average Grant Date Fair Value

Outstanding - December 31, 2022

Forfeited/canceled

Outstanding - September 30, 2023

of the outstanding warrants are currently exercisable and have a weighted average remaining contractual life of approximately 2.69 years

as of September 30, 2023.

Note 7 – Net Loss Per Share

Basic net loss per share is computed by dividing

net loss, which is allocated based upon the proportionate amount of weighted average shares outstanding, to each class of shareholder’s

stock outstanding during the period.

For the calculation of diluted net loss per share, net loss per share attributable to common shareholders

for basic net loss per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans.

As of September 30, 2023, and 2022, 7,079,016

shares and 6,271,219 shares, respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted

net loss per share because their effect would have been anti-dilutive for the periods presented.

Vested/issued

Outstanding – March 31, 2023

The Company recognized share-based compensation expense

related to stock options and restricted stock units of $ 173,289 and $ 357,680 for the three months ended March 31, 2024 and 2023,

respectively.

The remaining unvested share-based compensation expense of $ 535,010 is expected to be recognized over the next 45 months.

Note 7 – Equity Financings

Equity Line Sales

of Common Stock

On November 14, 2022,

the Company entered into a Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) with White Lion Capital,

LLC, a Nevada limited liability company (“White Lion”) for an equity line facility.

In April and June 2023,

the Company closed on three sales of Common Stock under the White Lion Purchase Agreement.

As a result, the Company issued an aggregate

of 2,361,514 common shares and received aggregate proceeds of approximately $ 1.3 million .

Any proceeds that the

Company receives under the White Lion Purchase Agreement are expected to be used for working capital and general corporate purposes.

The aggregate number of shares of common stock

that the Company can sell to White Lion under the White Lion Purchase Agreement (including the Commitment Shares) may in no case exceed

2,501,700 shares of the common stock (which is equal to approximately 19.99% of the shares of the common stock outstanding immediately

prior to the execution of the White Lion Purchase Agreement) (the “Exchange Cap”), unless shareholder approval is obtained

to issue purchase shares above the Exchange Cap, in which case the Exchange Cap will no longer apply.

Equity Line Sales of Common

On November 14, 2022, the

Company entered into a Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) with White Lion Capital, LLC,

a Nevada limited liability company (“White Lion”) for an equity line facility.

In April and June 2023, the

Company closed on three sales of Common Stock under the White Lion Purchase Agreement.

As a result, the Company issued an aggregate of

2,361,514 common shares and received aggregate proceeds of approximately $ 1.3 million.

Any proceeds that the Company

receives under the White Lion Purchase Agreement are expected to be used for working capital and general corporate purposes.

The White Lion Purchase Agreement prohibits the

Company from issuing and selling any shares of common stock to White Lion to the extent such shares, when aggregated with all other shares

of our common stock then beneficially owned by White Lion, would cause White Lion’s beneficial ownership of common stock to exceed

9.99% (the “Beneficial Ownership Cap”).

The Company recognized all offering costs related

to the equity line of credit as deferred offering costs in accordance with the guidance in ASC 835-30-S45.

Sale of Common Shares

(S-3 offering)

In June 2023, the Company sold 4,735,000

shares of common stock in a registered public offering with net proceeds of $ 2.7

Note 9 – Subsequent

Replacement Equity

Line with White Lion

On November 6, 2023, the Company

entered into a new Common Stock Purchase Agreement and a related registration rights agreement with White Lion.

Pursuant to the new Common

Stock Purchase Agreement, the Company has the right, but not the obligation to require White Lion to purchase, from time to time until

December 31, 2024, up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock, subject

to certain limitations and conditions set forth in the Common Stock Purchase Agreement.

In connection with the new Common Stock Purchase

Agreement, the parties agreed to terminate the previous Common Stock Purchase Agreement with White Lion.

Replacement Equity Line

with White Lion

6, 2023, the Company entered into a new Common Stock Purchase Agreement and a related registration rights agreement with White Lion.

to the new Common Stock Purchase Agreement, the Company has the right, but not the obligation to require White Lion to purchase, from

time to time until December 31, 2024, up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company’s

common stock, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement.

In connection with the new

Common Stock Purchase Agreement, the parties agreed to terminate the previous Common Stock Purchase Agreement with White Lion.

In February and March 2024,

the Company closed on seven sales of Common Stock under the White Lion Purchase Agreement.

As a result, the Company issued an aggregate

of 1,340,000 common shares and received aggregate proceeds of approximately $ 3.6 million.

The following table presents

the activity for warrants outstanding:

Schedule of warrant activity

Weighted Average Exercise Price

Outstanding - December 31, 2023

Forfeited/cancelled/restored

Outstanding – March 31, 2024

Note 8 – Leases

The Company leases certain

office space under operating leases for use in operations.

The Company recognizes operating lease expense on a straight-line basis over

the lease term.

Management determines if an arrangement is a lease at contract inception.

Lease and non-lease components are accounted

for as a single component for all leases.

Operating lease right to use (“ROU”) assets and liabilities are recognized at the

lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional

renewal periods if the Company determines it is reasonably certain that the option will be exercised.

As the operating lease does not

provide an implicit rate, the discount rate used in the present value calculation represents the incremental borrowing rate determined

using information available at the commencement date.

For the three months ended March 31, 2024 and 2023, the Company recorded operating

lease expense of zero as the lease commences on April 1, 2024.

At March 31, 2024, weighted-average remaining lease term and discount rate

were as follows:

Lease cost information

March 31, 2024

Weighted-average remaining lease term

Weighted-average discount rate

The following is a maturity analysis of the annual

undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2024:

Annual undiscounted cash flows of leases

Years Ended December 31,

Less imputed interest

Note 9 – Subsequent Events

Notes Payable to Related Party

As previously disclosed in

Note 4, in November 2022 and April 2023, the Company entered into secured bridge note (“Bridge Notes”) financings with one

accredited investor who is a significant existing stockholder of the Company.

The Company received $2.75 million of gross proceeds in

connection with the Bridge Note financings.

The Bridge Notes are currently due.

In connection with the issuance of the Bridge Notes, the

Holder also holds 50,000 common stock warrants with a current exercise price of $15.25 per share.

On April 9, 2024, the Company

and the investor entered into an Amendment and Waiver Agreement relating to the Bridge Notes.

Principal Repayment

The Company agreed

to pay $2.75 million in cash to the Investor in repayment of the principal of the Bridge Notes (exclusive of the $275,000 of

original issue discount on the Bridge Notes) shortly after the closing by the Company of one or more equity financings with total

gross proceeds to the Company of not less than $6,000,000.

On April 26, 2024, the

Company repaid $2.75 million of principal on its Secured Bridge Notes.

Equity Conversion

Effective April 9, 2024,

the Investor converted $911,384 (the “Rollover Amount”) which is equal to the (i) unpaid accrued interest on the Bridge Notes

plus (ii) the original issue discount (“OID”) on the Bridge Notes, into equity securities of the Company (the “Rollover

Securities”).

The Rollover Securities consist

of (i) 463,337 prefunded common stock warrants with a per share exercise price of $0.001 per share (the “Prefunded Warrants”)

and (ii) 463,337 non-prefunded warrants (the “Non-Prefunded Warrants”) with a per share exercise price equal to $1.967.

of the date and time of the Amendment and Waiver Agreement, the Nasdaq Minimum Price (as defined in the applicable Nasdaq listing rules)

for the Company’s common stock was $1.966.

The number of Prefunded Warrants

was determined by dividing the Rollover Amount by $1.967.

The number of Non-Prefunded Warrants is equal to the number of Prefunded Warrants

100% warrant coverage).

The Non-Prefunded Warrants have a price adjustment provision which will adjust the exercise price downward

in the event that the Company issues equity securities in the future at an effective per share price below the then current exercise price.

In order to assure compliance with applicable Nasdaq rules, the Non-Prefunded Warrants shall not be exercisable for six months following

the date of issue.

The Company issued to the

Investor 50,000 new common stock warrants with a five-year term as a loan extension fee (“Fee Warrants”).

The exercise price

of these additional Fee Warrants is $1.967.

The Fee Warrants have a price adjustment provision which will adjust the exercise price downward

in the event that the Company issues equity securities in the future at an effective per share price below the then current exercise price.

In order to assure compliance with applicable Nasdaq rules, the Fee Warrants shall not be exercisable for six months following the date

Repricing of Existing

The Company agreed to adjust

the exercise price of the Investor’s Existing Warrants from $15.25 (after adjustment for the recent reverse stock) to $1.967 per

Ownership and Exercise

The Investor will not be

able to receive shares upon exercise of any of the foregoing securities, unless prior stockholder approval is obtained, if (i) the number

of shares to be issued would exceed 20% of the Company’s outstanding number of shares at a discount to the applicable Nasdaq Minimum

Price or (ii) the number of shares to be issued would result in in a Change of Control within the meaning of Nasdaq Rule 5635(b).

$2.3 Million Convertible

Preferred Stock and Warrants Financing

On April 23, 2024, the

Company entered into a securities purchase agreement with accredited investors for a convertible preferred stock and warrants financing.

The Company has received $2,314,000 of gross proceeds in connection with the closing of this financing.

At the closing, the Company

issued 2,314 shares of Series B convertible preferred stock (“Series B Preferred Stock”) at a purchase price of $1,000 per

share of Series B Preferred Stock.

The Series B Preferred Stock is convertible into Common Stock at an initial conversion price (“Conversion

Price”) of $1.851 per share of Common Stock.

The Company also issued warrants (“Warrants”) exercisable for 1,250,137

shares of Common Stock with a five year term and an initial exercise price of $1.851 per share.

The proceeds of this

financing, together with other available cash resources, will be used to repay outstanding debt and for general corporate purposes.

The Company believes

that the closing of this financing, together with other recent financing activities, will bring the Company back into compliance with

the Nasdaq stockholders’ equity requirement for continued listing on the Nasdaq Capital Market.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements