What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-07 compared with 2024-05-14 · 313 added, 261 removed, 384 unchanged (60% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

March 31, 2024

December 31, 2023

2 unchanged sentences

Accounts receivable, net

Prepaid insurance

Prepaid assets

Other current assets

6 unchanged sentences

Deferred offering costs

Prepaids and other non-current assets

Total non-current assets

10 unchanged sentences

Shareholders' equity:

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 2,194,196 and 854,162 shares issued and outstanding March 31, 2024 and December 31, 2023, respectively

Series B Preferred stock - $ 0.001

par value, 3,000 authorized and 2,314

shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Common stock - $ 0.001 par value, 100,000,000 authorized and 2,794,196 and 854,162 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Operating expenses:

8 unchanged sentences

( 1,784,290 )

Other (expense) income:

( 3,709,010 )

( 3,631,696 )

Other expense:

Interest expense

Change in fair value of warrants

Total other expense

2 unchanged sentences

( 2,322,862 )

( 4,510,753 )

( 4,478,174 )

Provision for income taxes

1 unchanged sentence

$ ( 2,322,862 )

$ ( 4,510,753 )

$ ( 4,478,174 )

Net loss per share attributable to common stockholders

4 unchanged sentences

unaudited condensed financial statements.

Condensed Statements of Changes in Shareholders’

for the Three Months Ended March 31, 2024 and 2023

Condensed Statements of Changes in Stockholders’

for the Three and Six Months Ended June 30, 2024

Paid-In-Capital

8 unchanged sentences

( 82,750,658 )

Issuance of common shares, net of costs

Issuance of Series B preferred stock and warrants

Conversion of debt to equity

Offering costs

Share-based compensation

( 2,303,425 )

Balance, June 30, 2024

$ ( 85,054,083 )

Paid-In-Capital

1 unchanged sentence

$ ( 71,735,834 )

Exercise of restricted stock units

Exercise of restricted stock units and warrants

Share-based compensation

3 unchanged sentences

( 73,891,146 )

Issuance of common shares, net of costs

Issuance of warrants

Share-based compensation

Reclassification of share-based compensation liability

( 2,322,862 )

Balance, June 30, 2023

$ ( 76,214,008 )

The accompanying notes are an integral part of these

1 unchanged sentence

Condensed Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

5 unchanged sentences

Share-based compensation expense

Change in fair value of warrants

Amortization of right of use asset

Change in assets and liabilities:

Accounts receivable

Prepaid insurance

Prepaids and other non-current assets

Operating lease right of use asset

Prepaid assets

Other current assets

Accounts payable and accrued liabilities

4 unchanged sentences

Cash flows from investing activities:

Purchase of property and equipment

Software capitalization

1 unchanged sentence

Cash flows from financing activities:

Offering costs

Net settlement of share-based compensation liability

Proceeds from issuance of common shares

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Proceeds from related party debt, net of original issue discount

Repayments of related party debt

( 2,750,000 )

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

Proceeds from issuance of preferred shares, net of issuance costs

Proceeds from issuance of common shares, net of issuance costs

Net cash provided by financing activities

Net increase in cash

Cash, beginning of year

Cash and restricted cash, end of period

Supplemental disclosures of cash flow information:

Cash paid for Interest

Cash paid for taxes

Supplemental disclosures of non-cash activity:

Reclassification of deferred offering cost

Original issue discount and issuance of warrants on related party debt

Issuance of warrants in connection with related party debt

Right of use asset and assumption of operating lease liability

The accompanying notes are an integral part of these

1 unchanged sentence

Notes to Condensed Financial Statements (Unaudited)

Note 1 – Description of Business, Basis of Presentation and Summary

of Significant Accounting Policies

Note 1 – Description of Business, Basis of Presentation and

Summary of Significant Accounting Policies

Description of Business

30 unchanged sentences

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.

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

6 unchanged sentences

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.

These estimates may be adjusted as more current information becomes available, and any adjustment could be

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.

These estimates may be adjusted as more current information becomes available, and any adjustment

could be significant.

Risks and Uncertainties

20 unchanged sentences

The Company had cash and cash equivalents of $ 1,882,205

$ 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.

as of June 30, 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 $ 7.1 million during 2024 and paid down $ 2.75 million in Secured Bridge Notes.

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

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.

As a result of the Company’s recurring losses

9 unchanged sentences

be necessary should the Company be unable to continue as a going concern.

The Company’s current

level of cash is not sufficient to execute the business plan.

For the foreseeable future, the Company will incur significant operating

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

The Company’s current level of cash is not sufficient

to execute the business plan.

For the foreseeable future, the Company will incur significant operating expenses, capital expenditures

and working capital funding that will deplete cash on hand during the fourth quarter of 2024.

Cash and Cash Equivalents

The Company had cash on hand of $ 1,879,187 and $ 801,448

as of June 30, 2024 and December 31, 2023, respectively.

The Company considers all highly liquid instruments

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

The Company had cash equivalents of approximately

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

The Company had cash equivalents of $ 3,018 and $ 3,108

as of June 30, 2024 and December 31, 2023, respectively.

The Company maintains cash deposits at several financial

2 unchanged sentences

exceed these limits.

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

As of June 30, 2024, the Company had approximately $ 1.6 million in excess of federally insured limits.

As of December

16 unchanged sentences

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

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

The Company determined that no such impairments were required during the three and six months ended June 30, 2024 and 2023.

Software development

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

costs of $ 255,214 and $ 258,929 were capitalized for the three months ended June 30, 2024 and 2023, respectively.

Software development

costs of $ 528,602 and $ 529,503 were capitalized for the six months ended June 30, 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.

software development costs was $ 486,764 and $ 436,425 for the three months ended June 30, 2024, and 2023, respectively and $ 963,682 and

$ 872,850 for the six months ended June 30, 2024 and 2023, respectively, and is included in depreciation and amortization expense in the

Company’s condensed statement of operations.

Revenue Recognition

29 unchanged sentences

statements of cash flows.

account for warrants as equity-classified instruments, based on an assessment of the warrant’s specific terms and applicable authoritative

guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability

pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether

the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification.

This assessment, which

requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end

date while the warrants are outstanding.

In connection

with the amendment to the Secured Bridge Notes (see Note 4), the Company converted $ 911,384 ,

consisting of accrued interest and the original issue discount on the Bridge Notes, into equity securities.

As a result of the conversion,

the Company recognized a change in the fair value of warrants in the amount of $ 632,388

during the three and six months ended June 30, 2024.

Reclassifications

6 unchanged sentences

consisted of the following as of:

Schedule of property, equipment and software development costs

Schedule of property and equipment and software development costs

Computers and equipment

8 unchanged sentences

Total software development costs, net

The Company recognized depreciation expense of $ 6,494

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.

The Company recognized depreciation

expense of $ 6,284

and $ 6,193 for

the three months ended June 30, 2024 and 2023, respectively related to property and equipment, amortization expense of $ 334 and

for the three months ended June 30, 2024 and 2023, respectively related to intangible assets, and amortization expense of $ 486,764

and $ 436,425

for the three months ended June 30, 2024 and 2023, respectively related to software development costs.

The Company recognized

depreciation expense of $ 12,778

and $ 12,803 for

the six months ended June 30, 2024 and 2023, respectively related to property and equipment, amortization expense of $ 668

the six months ended June 30, 2024 and 2023, respectively related to intangible assets, and amortization expense of $ 963,682

and $ 872,850

for the six months ended June 30, 2024 and 2023, respectively related to software development costs.

Note 3 – Accounts Payable and Accrued

5 unchanged sentences

Accrued interest

Accounts payable and accrued liabilities

Total accounts payable and accrued liabilities

Note 4 – Notes Payable to Related Party,

17 unchanged sentences

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.

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 per share.

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

12 unchanged sentences

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

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.

of issuance, the common stock warrants were valued at $ 252,940 , which was recorded as an additional debt discount to the New Note.

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.

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 per share.

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 ,

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 June 30, 2024 and December 31, 2023, the balance

of the Prior Note, net of debt issuance costs, was $ 0 and $ 2,200,000 , respectively.

Interest expense related to the Prior Note, including

interest incurred, amortization of the debt discount, and the warrant amortization for the three months ended June 30, 2024 and 2023 was

$ 11,000 and $ 261,861 , respectively.

Interest expense related to the Prior Note, including interest incurred, amortization of the debt

discount, and the warrant amortization for the six months ended June 30, 2024 and 2023 was $ 121,000 and $ 261,861 , respectively.

June 30, 2024 and December 31, 2023, the balance of the New Note issued in April 2023, net of debt issuance costs, was $ 0 and $ 825,000

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).

amortization for the three months ended June 30, 2024 and 2023 was $ 4,068 and $ 273,204 .

Interest expense related to the New Note, including

interest incurred, amortization of the debt discount, and the warrant amortization for the six months ended June 30, 2024 and 2023 was

$ 45,205 and $ 273,204 .

On April 9, 2024, the Company

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

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.

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 of issue.

The Non-Prefunded Warrants and Fee Warrants had a total valuation of

$ 811,402 and the Prefunded Warrants had a valuation of $ 732,370 .

As a result, the Company recorded $ 911,384 as a non-cash charge in connection

with the issuance of warrants related to the Secured Bridge Notes and a change in the fair value of warrants of $ 632,388 , which is included

in other expense in the accompanying statements of operations.

All Warrants were classified as equity as they were indexed to the Company’s

shares in accordance with ASC 815-40.

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

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).

Note 5 – Commitments and Contingencies

Operating Lease

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

is party to litigation from time to time.

The Company maintains insurance to cover certain actions and believes that resolution of such

litigation will not have a material adverse effect on the Company.

There are no active litigations as of the date the financial statements

However, a pre-IPO investor has contacted the Company claiming damages caused by alleged

acts and omissions arising from a private financing by the Company.

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.

Rent expense, as part

of general and administrative expenses in the condensed statement of operations, was $ 8,960 and $ 13,760 for the three and six months ended

June 30, 2024, respectively, which consisted of the new lease and a temporary month-to-month lease the Company entered into until a long-term

space was identified.

Rent expense was $ 25,385 and $ 37,438 for the three and six months ended June 30, 2023, respectively, under the former

lease that terminated in December 2023.

In the normal course of business, the Company is party

to litigation from time to time.

The Company maintains insurance to cover certain actions and believes that resolution of such litigation

will not have a material adverse effect on the Company.

There are no active litigations as of the date the financial statements were issued.

However, a pre-IPO investor has contacted the Company claiming damages caused by alleged acts and

omissions arising from a private financing by the Company.

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, therefore, no accrual has been made.

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

8 unchanged sentences

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 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”).

In the 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 Requirement.

On January 30, 2024, the

1 unchanged sentence

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.

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”).

On May 24, 2024, the Company received a letter from

Nasdaq indicating that the Company has regained compliance with the equity requirement in Listing rule 5550(b) (1) (the Equity Rule”.)

The Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter in accordance with application

of Listing Rule 5815(d)(4)(B).

The Company’s receipt

4 unchanged sentences

options outstanding:

Schedule of stock option activity

Schedule of activity for stock

options outstanding

Weighted Average Exercise Price

1 unchanged sentence

Forfeited/canceled

Outstanding – March 31, 2024

Outstanding – June 30, 2024

Weighted Average Exercise Price

1 unchanged sentence

Forfeited/canceled

Outstanding – March 31, 2023

The following table presents the composition

of options outstanding and exercisable:

Outstanding – June 30, 2023

The following table presents the composition of options

outstanding and exercisable:

Schedule of options outstanding and exercisable

2 unchanged sentences

Exercise Prices

Total – March 31, 2024

Total – June 30, 2024

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

3 unchanged sentences

stock units outstanding:

Schedule of restricted stock outstanding

Schedule of activity for restricted

stock units outstanding

Restricted Stock Units

3 unchanged sentences

Vested/issued

Outstanding – March 31, 2024

Outstanding – June 30, 2024

Restricted Stock Units

3 unchanged sentences

Vested/issued

Outstanding – March 31, 2023

Outstanding – June 30, 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.

related to stock options and restricted stock units of $ 132,488 and $ 224,856 for the three months ended June 30, 2024 and 2023, respectively,

and $ 305,777 and $ 582,536 for the six months ended June 30, 2024 and 2023, respectively.

The remaining unvested share-based compensation

expense of $ 414,721 is expected to be recognized over the next 42 months.

Note 7 – Equity Financings

9 unchanged sentences

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

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”).

9 unchanged sentences

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.

During the six months ended

June 30, 2024, the Company closed on several sales of Common Stock under the White Lion Purchase Agreement.

As a result, the Company issued

an aggregate of 1,940,000 common shares and received aggregate proceeds of approximately $ 4.9 million.

$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.

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, were used to repay outstanding debt and for general corporate purposes.

The following table presents

the activity for warrants outstanding:

Schedule of warrant activity

Schedule of activity for warrants outstanding

Weighted Average Exercise Price

1 unchanged sentence

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

Outstanding – June 30, 2024

8 – Leases under ASC 842

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.

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

For the three and six months ended June 30, 2024, the Company recorded operating lease expense of $ 8,960 and $ 8,960 , respectively,

which is included in general and administrative expenses in the Company’s accompanying condensed statements of operations.

June 30, 2024, weighted-average remaining lease term and discount rate were as follows:

Schedule of weighted-average remaining lease term and discount rate

June 30, 2024

Weighted-average remaining lease term

1 unchanged sentence

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

undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 2024:

Schedule of annual undiscounted cash flows of leases

Years Ended December 31,

1 unchanged sentence

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.

Management evaluated subsequent events and transactions that occurred after

the balance sheet date, up to the date that the financial statements were issued.

Based upon this review, other than as set forth below,

management did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

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