What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-28 compared with 2023-03-09 · 83 added, 94 removed, 161 unchanged (52% of the section changed)

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Our product, known as the Portable Neuromodulation Stimulator, or PoNS®, is an innovative non-implantable medical device, inclusive of a controller and mouthpiece, which delivers mild electrical stimulation to the surface of the tongue to provide treatment of gait deficit and chronic balance deficit.

PoNS Therapy® is integral to the overall PoNS solution and is the physical therapy applied by patients during use of the PoNS neuromodulation stimulator.

PoNS has marketing clearance in the U.S.

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PoNS is authorized for sale in Canada for three indications:

(i) for use as a short term treatment (14 weeks) of chronic balance deficit due to mild-to-moderate traumatic brain injury, or mmTBI, and is to be used in conjunction with physical therapy, or PoNS TherapyTM;

(ii) for use as a short term treatment (14 weeks) of gait deficit due to mild and moderate symptoms from MS and it is to be used in conjunction with physical therapy;

(i) as a short term treatment (14 weeks) of chronic balance deficit due to mild-to-moderate traumatic brain injury, or mmTBI, and is to be used in conjunction with physical therapy;

(ii) as a short term treatment (14 weeks) of gait deficit due to mild and moderate symptoms from MS and it is to be used in conjunction with physical therapy;

and (iii) as a short term treatment (14 weeks) of gait deficit due to mild and moderate symptoms from stroke, to be used in conjunction with physical therapy.

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Recent Developments

Change of Independent Registered Public Accounting Firm for Fiscal 2022

In September 2022, the Audit Committee of the Board (i) engaged Baker Tilly US, LLP (“Baker Tilly”) to serve as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2022, and (ii) determined to dismiss BDO USA, LLP (“BDO”), the Company’s independent registered public accounting firm for the year ending December 31, 2021.

Corporate Updates

We began accepting prescriptions for PoNS in the U.S.

in the first quarter of 2022, and our first commercial sales began in April 2022.

Presently, PoNS Therapy is not covered by Center for Medicare and Medicaid (“CMS”) or reimbursed by any third-party payors in the US.

In June 2022, the Company launched the Patient Therapy Access Program (“PTAP”) program, which will provide qualifying patients access to PoNS therapy at a significantly reduced price.

To qualify for the PTAP pricing, the patient must provide a letter of medical necessity and consent to the release of their medical records for the last two years.

Because of the significantly reduced price, the patient must also sign a document that prohibits him/her from submitting a reimbursement claim to third-party payers.

PTAP participants will also be invited to join the Company’s registry program, which is designed to collect important health information to establish the value of PoNS on key therapeutic outcomes and will supplement the data collected through clinical trials and real-world data.

The Company began processing orders under the PTAP program in June 2022, which is expected to run through June 2023.

In December 2022, we launched an e-commerce site in the US to make it easier for patients to obtain PoNS systems.

Accessed via ponstherapy.com, the site is powered through a new partnership with UpScriptHealth, a leading telehealth company focused on making medications and devices available direct-to-consumer.

UpScriptHealth’s platform provides for (1) online health evaluations with qualified medical providers, (2) fulfillment of prescriptions required for PoNS Therapy™ and (3) shipping of PoNS devices directly to the homes of eligible patients in the United States.

The UpScriptHealth platform makes it possible for people with MS to have a PoNS device delivered directly to their doorstep.

During 2021, we contracted with an industry consultant to conduct a health economic study of PoNS.

Based upon the results of this study and comparing PoNS to other medical devices utilizing similar patented technologies we established a U.S.

list price for the PoNS device of $25,700, comprised of $17,800 for the controller and $7,900 for the mouthpiece.

On September 28, 2023, the Company announced that Wolters Kluwer Health – Medi-Span® assigned universal product code numbers to the Company’s PoNS device controller and mouthpiece.

The NDC/UPC/HRI codes for the PoNS device controller is 64288-00046 at $25,700 and the PoNS mouthpiece is 64288-00043 at $7,900.

In February 2024, the Company confirmed that the PoNS device and mouthpiece are also listed on the First Data Bank (“FDB”) Prizm® database.

Previously, on September 19, 2022, the Company received notice from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that the bid price for the Company’s Class A Common Stock (“common stock”) had closed below $1.00 per share for the prior 30-consecutive business day period and that the Company had been granted a 180-day grace period, through March 20, 2023, to regain compliance with Nasdaq Marketplace Rule 5550(a)(2) (the "Minimum Bid Price Rule").

Subsequently, on March 21, 2023, the Company was granted a second 180-day grace period through September 18, 2023.

On August 31, 2023, following a reverse stock split of the Company’s common stock as described below, the Company received formal notification from Nasdaq confirming that is had regained compliance, and that the Company satisfied all other applicable criteria for continued listing on the Nasdaq Stock Market.

As a result of the determination, the listing matter is closed.

At the annual meeting of stockholders on May 24, 2023, the Company’s stockholders voted to approve a reverse stock split of the Company’s outstanding common stock at a ratio in the range of 1-for-10 to 1-for-80 to be determined at the

discretion of the Company’s Board of Directors (the “Board”).

On August 11, 2023, the Board approved a 1-for-50 reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”) and on August 15, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Certificate of Incorporation to effect the Reverse Stock Split.

The Reverse Stock Split became effective as of 5:00 p.m.

Eastern Time on August 16, 2023, and the Company’s common stock began trading on a split-adjusted basis when the Nasdaq Stock Market opened on August 17, 2023.

All share and per share amounts in this Report have been reflected on a post-split basis.

During the third quarter of 2023, the Company began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces to Minnetronix, Inc.

from its previous contract manufacturer, Key Tronic Corporation.

The majority of this transition was completed by the end of 2023, and the Company expects the transition to be fully completed by mid-2024.

Presently, PoNS Therapy is not covered by Center for Medicare and Medicaid (“CMS”) or reimbursed by any third-party payers in the U.S.

We are pursuing commercial insurance coverage and Medicare reimbursement for PoNS within the Durable Medical Equipment, or DME, benefit category.

While there are currently no applicable Healthcare Common Procedure Coding System, or HCPCS, codes to describe the PoNS device or mouthpiece, we intend to use miscellaneous codes – E1399 (Miscellaneous durable medical equipment) and A9999 (Miscellaneous DME supply or accessory, not otherwise specified) until specific HCPCS codes are created.

We initially applied for unique HCPCS codes during the third quarter of 2021.

In order to address CMS’s request for additional information to “further understand the PoNS device indication for use”, we decided to move forward and collect additional clinical and real-world data.

As such, through our ongoing PoNSTEP study and upcoming registry program, we plan to resubmit for unique HCPCS codes upon availability of a body of evidence that we consider adequate and sufficient to address CMS’s questions.

We expect to meet again with CMS in June 2023.

The Company will continue monitoring the development of CMS’s new pathway for coverage of innovative new devices, Transitional Coverage of Emerging Technology (“TCET”), which is replacing the repealed Medicare Coverage of Innovative Technologies (“MCIT”) rule.

CMS is expected to share more about TCET with the public for comments in 2023.

We initially applied for unique Healthcare Common Procedure Coding System (“HCPCS”) codes during the third quarter of 2021.

In order to address CMS’s request for additional information to “further understand the PoNS device indication for use”, we decided to monitor real-world utilization of PoNS Therapy and collect additional clinical evidence through our ongoing PoNSTEP study and our registry program.

Based on consistent reports of positive therapeutic benefits experienced by MS patients through our commercial programs, we reapplied for HCPCS codes in the second quarter of 2023 leveraging new information addressing their questions and providing further support in favor of obtaining unique HCPCS codes for PoNS.

In February 2024, CMS assigned HCPCS Level II codes A4593, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime” to describe the PoNS controller and A4594, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime, mouthpiece each” to describe the PoNS mouthpiece.

The new HCPCS codes will be effective April 1, 2024.

We expect to interact again with CMS in the second half of 2024 – to seek Medicare final payment determinations for both codes to be effective at the next scheduled date of October 1, 2024.

We will continue to monitor the development of CMS’s new pathway for coverage of innovative new devices, Transitional Coverage of Emerging Technology (“TCET”), which is replacing the repealed Medicare Coverage of Innovative Technologies rule.

CMS is expected to provide additional information about TCET to the public for comments in 2024.

As we follow the evolution of TCET, we will continue to assess our evidence generation strategy to reach the greatest potential to gain CMS reimbursement benefits as a result of our Breakthrough designation in MS.

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We expect to support the cost of the PoNS Therapy by offering a cash pay discount, collaborating with third parties to provide self-pay patients with financing options as well as working with advocacy groups and charitable organizations to help self-pay patients access our technology.

In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers.

We entered into the Exclusivity Agreement with HTC, whereby, subject to certain terms and conditions, we granted to HTC the exclusive right to provide the PoNS Therapy in the Fraser Valley and Vancouver metro regions of British Columbia, where HTC has operated a PoNS authorized clinic since February 2019.

HTC is to purchase the PoNS devices for use in these regions exclusively from us and on terms no less favorable than the then-current standard terms and conditions.

This Exclusivity Agreement replaces the previous Co-Promotion Agreement between the parties dated October 2019.

This exclusivity right was granted for a value of CAD$273 thousand which is represented by the unamortized payment that we received from HTC under the Co-Promotion Agreement and has an initial term of five years, renewable by HTC for one additional five-year term upon sixty days’ written notice to us.

As discussed further in Note 8 to our Consolidated Financial Statements, in August 2022, we closed on a public offering of our Class A common stock and warrants (“August 2022 Public Offering”) and received net proceeds of approximately $16.3 million.

In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers once the HCPCS codes become effective.

Our Patient Therapy Access Program (“PTAP”), launched in June 2022 and effective through June 2023, provided qualifying patients access to PoNS Therapy at a significantly reduced price.

The PTAP was not renewed and terminated on June 30, 2023.

Material Trends and Uncertainties

Global Economic Conditions

Generally, worldwide economic conditions remain uncertain, particularly due to the effects of the COVID-19 pandemic and increased inflation.

Generally, worldwide economic conditions remain uncertain, in part due to supply chain disruptions, labor shortages, global conflicts and increased inflation.

The general economic and capital market conditions both in the U.S.

and worldwide, have been

volatile in the past and at times have adversely affected our access to capital and increased the cost of capital.

The capital and credit markets may not be available to support future capital raising activity on favorable terms.

If economic conditions decline, our future cost of equity or debt capital and access to the capital markets could be adversely affected.

The COVID-19 pandemic that began in late 2019 introduced significant volatility to the global economy, disrupted supply chains and had a widespread adverse effect on the financial markets.

Additionally, our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the conflict in Ukraine, and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates.

and worldwide, have been volatile in recent years and at times have adversely affected our access to capital and have increased the cost of capital.

The capital and credit markets may not be available to support future capital raising activity

on favorable terms.

If economic conditions continue to remain volatile or decline, our future cost of equity or debt capital and access to the capital markets could be adversely affected.

Our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, global conflicts such as the conflicts in Ukraine and in the Middle East, and steps taken by governments and central banks as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates.

Although we may take measures to mitigate these impacts, if these measures are not effective, our business, financial condition, results of operations, and liquidity could be materially adversely affected.

Other Trends and Uncertainties

Beginning in late 2021, production delays began to negatively impact the ability of our contract manufacturer to successfully ramp up production during 2022 to fulfill orders for both commercial sales and clinical trials, which has been exacerbated by both labor and supply chain shortages currently being experienced by many industries in the U.S.

To successfully commercialize, we need to continue to build infrastructure necessary to grow our business including adding headcount and implementing or upgrading business systems.

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In response to the aforementioned challenges and trends, we have supplemented our personnel including quality resources at our contract manufacturer.

Additionally, we continue to actively recruit and source candidates to fill positions as we build out our team to support our anticipated growth.

Additionally, during the third quarter of 2023, we began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces to Minnetronix, Inc.

from our previous contract manufacturer, Key Tronic Corporation.

We expect the transition to be fully completed by mid-2024.

Results of Operations

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Operating expenses:

Selling, general and administrative

Research and development

Selling, general and administrative expenses

Research and development expenses

Amortization expense

Goodwill impairment

Goodwill and fixed asset impairment

Total operating expenses

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Nonoperating income (expense)

Interest expense, net

Interest income (expense), net

Change in fair value of derivative liability

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Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

The increase in total net product sales reflects the U.S.

commercial launch of PoNS for MS in April 2022, partially offset by a decrease in product sales in Canada.

The decrease in Canada product sales was primarily attributable to lower Canadian to U.S.

dollar translation rates during 2022.

Other revenue for the years ended December 31, 2022 and 2021 was comprised of license fee revenue related to the amortization of the up-front payment we received in connection with our Co-Promotion Agreement with HTC.

The decrease in total net product sales was primarily attributable to lower Canada product sales.

The decrease in Canada product sales resulted primarily from the inclusion of approximately $120 thousand of revenue recognized in connection with the delivery of the remaining 16 PoNS devices that had been included as noncash consideration in the Company’s acquisition of Heuro in the prior year sales.

Other revenue for the years ended December 31, 2023 and 2022 was related to the amortization of the up-front payment we received in connection with agreements that contained an exclusive distribution right.

Cost of Revenue

The increase in cost of revenue was primarily attributable to overhead costs, including salaries and benefits of employees involved in management of the supply chain, and inventory-related cost of sales due to higher sales volume as well as other costs and adjustments.

The increase in cost of revenue was primarily attributable to fixed overhead costs, including salaries and benefits of employees involved in management of the supply chain and certain production costs.

Gross profit for the year ended December 31, 2023 was $61 thousand compared to gross profit of $324 thousand for the same period in the prior year.

Reduced absorption of fixed overhead costs across the lower unit volume of PoNS device sales in 2023 as compared to the prior year was the primary reason for this decrease.

Selling, General and Administrative Expenses

The decrease in selling, general and administrative expenses was primarily due to a net decrease of $1.5 million in stock-based compensation expense, partially offset by increased compensation expenses related to personnel additions in late

2021 and early in 2022 to support the U.S.

commercial launch.

Refer to Note 9 for detailed information about stock-based compensation.

The decrease in selling, general and administrative expenses was primarily from a $0.6 million decrease in stock-based compensation and a $0.6 million decrease in payroll taxes including the $0.5 million Employee Retention Credit claims we filed for the prior eligible periods.

Refer to Note 9 to our consolidated financial statements for detailed information about stock-based compensation.

Research and Development Expenses

The decrease in research and development expenses was driven primarily by a decrease in product development expenses and clinical trial activities as we transitioned our focus from product development and clinical trials to U.S.

commercialization activities in 2022, as well as a $0.5 million decrease in stock-based compensation expense.

The decrease in research and development expenses was driven primarily by decreases in product development expenses and clinical trial activities as we transitioned our focus from product development and clinical trials to U.S.

commercialization activities beginning in 2022.

Amortization Expense

Amortization expense is primarily comprised of the amortization of acquired finite-lived intangible assets.

The decrease in amortization expense is the result of the customer relationships intangible asset becoming fully amortized during the first quarter of 2021 as well as lower Canadian to U.S.

dollar translation rates during 2022.

The decrease in amortization expense is primarily due to certain intangible assets becoming fully amortized during the year ended December 31, 2023.

Refer to Note 6 to our Consolidated Financial Statements for additional information about the composition of intangible assets.

Goodwill Impairment

Goodwill and Fixed Asset Impairment

During the third quarter of 2023, we recorded an impairment of $0.2 million for certain machinery used in the production of our inventory.

During the third quarter of 2022, we recorded a goodwill impairment charge of $0.8 million, reducing the goodwill balance to zero.

The significant decline in the price of our common stock following the August 2022 Public Offering was considered a triggering event for testing whether goodwill was impaired.

Management performed a quantitative assessment as of September 30, 2022 and determined that the carrying value of our single reporting unit exceeded the estimated fair value.

Refer to Note 3 to our Consolidated Financial Statements for additional information.

Nonoperating Income (Expense)

Interest Expense, Net

We recorded $0.9 million of interest expense for the year ended December 31, 2022 in connection with the derivative liability classification of warrants issued in connection with the August 2022 Public Offering.

Interest Income (Expense), Net

Net interest income for the year ended December 31, 2023 was primarily attributable to interest income earned on investments of excess cash in an unrestricted money market savings account, money market mutual funds, treasury bills and a certificate of deposit.

We recorded $0.9 million of non-cash interest expense for the year ended December 31, 2022 in connection with the derivative liability classification of warrants issued in connection with the August 2022 Public Offering.

Refer to Note 8 to our Consolidated Financial Statements for additional information.

The interest expense was offset by $0.1 million of interest income earned on investments of excess cash in an unrestricted money market savings account and a certificate of deposit.

The interest expense for the year ended December 31, 2022 was offset by $0.1 million of interest income earned on investments of excess cash in an unrestricted money market savings account and a certificate of deposit.

Change in Fair Value of Derivative Liability

As discussed in more detail in Note 8 to our Consolidated Financial Statements, the warrants issued in connection with the August 2022 Public Offering are being accounted for as a derivative liability instrument.

The change in fair value of derivative liability for the year ended December 31, 2022 of $3.0 million is the result of the decrease in fair value from the date of issuance on August 9, 2022 and December 31, 2022, primarily due to a decrease in the Company’s stock price.

The change in fair value of derivative liability for the year ended December 31, 2023 of $3.0 million is the result of the decrease in our stock price offset partially by reduced outstanding warrant exposure due to warrant exercises during the year.

Foreign Exchange (Loss) Gain

The foreign exchange loss for the year ended December 31, 2022 was primarily due to lower Canadian to U.S.

The foreign exchange gain for the year ended December 31, 2023 was primarily due to lower Canadian to U.S.

dollar exchange rates in 2023.

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Working capital

Our available capital resources were primarily used to expand our U.S.

Our available capital resources have been primarily used to expand our U.S.

commercialization efforts, fund manufacturing activities for the PoNS device, conduct clinical trials and for working capital and general corporate purposes.

Our major sources of cash and cash equivalents have been proceeds from public and private offerings of our common stock and to a lesser extent, exercises of warrants.

During the year ended December 31, 2022, in connection with the August 2022 Public Offering, we received gross proceeds of $18.0 million and paid $1.7 million of share issuance costs.

Due to the derivative liability classification of warrants issued in connection with the August 2022 Public Offering, $0.9 million of the share issuance costs were recorded as interest expense.

In addition, we received $0.6 million from the sale of common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to a purchase agreement (the “LPC Purchase Agreement”) and registration rights agreement with Lincoln Park.

We do not intend to issue any additional shares under the LPC Purchase Agreement.

Refer to Note 8 to our Consolidated Financial Statements for additional details about the stock issuances in 2022.

There were no exercises of warrants or stock options during the year ended December 31, 2022.

During the year ended December 31, 2021, in connection with two underwritten public offerings in February and November 2021, we received net proceeds of $9.6 million and $9.9 million, respectively.

In addition, we received net proceeds of $0.6 million from the sale of common stock to Lincoln Park pursuant to the LPC Purchase Agreement.

Refer to Note 8 to our Consolidated Financial Statements for additional details about the stock issuances in 2021.

We received $1.3 million from the exercise of warrants in 2021.

Our primary sources of cash and cash equivalents have been proceeds from public and private offerings of our common stock which most recently included $16.3 million in net proceeds we received from a public offering of our common stock and warrants completed in August 2022 (“August 2022 Public Offering”) as discussed in more detail in Note 8 to our Consolidated Financial Statements included our 2022 Annual Report on Form 10-K.

As discussed in more detail in Note 8 to our Consolidated Financial Statements, the Company entered into a sales agreement related to our at-the-market offering program (“ATM”) under which we may offer and sell shares having gross proceeds up to $2.0 million.

During the year ended December 31, 2023 the Company issued and sold shares with gross proceeds of $0.5 million under the ATM.

In addition, the Company received gross proceeds of $0.6 million from the issuance of shares upon the exercise of warrants for the year ended December 31, 2023.

Statement of Cash Flows

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Effect of foreign exchange rate changes on cash

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net Cash used in Operating Activities

The higher level of cash used in operating activities in 2022 primarily resulted from decreases related to operating assets and liabilities.

The $4.0 million decrease in net loss for the year ended December 31, 2022 as compared with the year ended December 31, 2021 was largely offset by an aggregate $3.5 million net decrease related to noncash adjustments.

The lower level of cash used in operating activities in 2023 primarily resulted from decreases in selling, general and administrative expenses and research and development expenses as compared to 2022.

Net Cash Used in Investing Activities

Our investing activities are primarily related to the purchase of property and equipment.

During the year ended December 31, 2022, net cash used in investing activities was net of $6 thousand in proceeds from the sale of furniture and equipment.

Net Cash Provided by Financing Activities

Net cash provided by financing activities are primarily related to the net proceeds from the equity offerings discussed above and in Note 8 to our Consolidated Financial Statements.

During the year ended December 31, 2023, we received net proceeds of $0.4 million from the issuance and sale of shares under the ATM.

In addition, we received $0.6 million in net proceeds from the exercise of warrants.

During the year ended December 31, 2022, we received net proceeds of $17.9 million from the sale of shares primarily from our August

2022 public offering and to a lesser extent from the sale of shares to Lincoln Park Capital Fund, LLC, as described in Note 8 to our Consolidated Financial Statements.

Cash Requirements

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commercialization efforts, fund manufacturing activities for the PoNS device, conduct clinical trials and for working capital and general corporate purposes.

We believe that our existing capital resources, including the net proceeds from the August 2022 Public Offering, will be sufficient to fund our operations through 2023, but we will be required to seek additional funding through the sale of equity or debt financing to continue to fund our operations thereafter.

We believe that our existing capital resources, including the $1.3 million of additional net proceeds from the ATM in 2024 through the date of this filing, will be sufficient to fund our operations through the second quarter of 2024, but we will be required to seek additional funding through the sale of equity or debt financing to continue to fund our operations thereafter.

We will need additional funding for our planned clinical trial for stroke.

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Revenue Recognition

We recognize revenue when control of the promised goods is transferred to the customer in an amount that reflects the consideration to which we expect to be entitled in exchange for those products.

We generate nearly all of our revenue from product sales directly to patients in the United States and to clinics in Canada.

Revenue from product sales is recognized at a point in time when the performance obligation is satisfied upon delivery of the product.

Taxes that we collect concurrent with revenue-producing activities are excluded from revenue.

We require customers in the United States to prepay the full product selling price, net of cash discount, prior to shipment.

We record a contract liability for any customer prepayment received for which delivery had not yet occurred as of the end of the period.

The Company generates nearly all of its revenue from product sales directly to patients, its e-commerce partner in the United States and to clinics in Canada.

Revenue from product sales is recognized at a point in time as the performance obligation is satisfied and when the customer obtains control at the established transaction price.

Taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue.

The Company requires some customers in the United States to prepay the full product selling price, net of cash discount, prior to shipment.

The Company records a contract liability for any customer prepayment received for which delivery had not yet occurred as of the end of the period.

Stock-Based Compensation

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There are a number of conditions that we must satisfy before we will be able to generate sufficient revenue to fund our operations, including but not limited to the successful commercialization of the PoNS device in the U.S.

These factors raise substantial doubt about our ability to continue as a going concern through at least 12 months from the date of this Annual Report.

These factors raise substantial doubt about our ability to continue as a going concern through at least 12 months from the date of this Form 10-K.

While we had $5.2 million of cash as of December 31, 2023, we do not currently have sufficient resources to accomplish all of the above conditions necessary for us to generate sufficient revenues to achieve profitability, and we expect that we will require additional financing to continue to fund our operations.

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In reviewing this filing, you should carefully consider this uncertainty, the risks described in the section entitled “Item 1A.

Risk Factors” and other risks described throughout this Annual Report.

Risk Factors” and other risks described throughout this Form 10-K.

Recently Issued Accounting Pronouncements

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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-K

Item 7. Management’s Discussion and Analysis